The team at Stewardship Asia Centre share how the best family businesses succeed at sustaining their organisations, the key traits of successful family businesses and how a genuine desire and persistence to create a collective better future for stakeholders, society, future generations and the environment, called Steward Leadership, can help sustain a family business.
At first glance, family businesses seem poised for sustainability. The family perspective lends them to the long-term thinking crucial for business sustainability. Yet, only 30% of 2nd generation family businesses stay in operation and only 12% into the 3rd generation.
Family businesses often find themselves navigating polarities. For example, how can family businesses strike a balance between preserving a multi-generational legacy and embracing continuous change? These issues aren’t new and are more than likely to persist regardless of the changes that come our way.
To find out how the best family businesses succeed at sustaining their organisations, we at Stewardship Asia Centre conducted a research study of 200 successful and enduring family businesses. From their survey responses, we distilled the following traits of successful family businesses:
- Purpose. These family businesses understand that business is more than just a set of economic inputs and outputs. A family business anchored in its values lends itself to the resilience needed to weather economic downturns.
- Community awareness. Enduring family businesses do not prioritise profit over community needs. More often than not, it’s usually the opposite. As Jamsetji Tata put it, “In a free enterprise, the community is not just another stakeholder in business but is in fact the very purpose of its existence.”
- Long-term view. This trait was ranked the second most important trait an organisation’s leadership could possess, just after trust and honesty.
- Trustworthiness. Successful family businesses understand that trust is the foundation upon which all relationships, professional or otherwise, are built. This trait was also the most desired trait in an employee.
- Adaptability. Enduring family businesses are always looking for ways to improve, upgrade and skill. They know that past successes don’t define their future.
- Social responsibility. Recognising that their success depends on that of others, successful family businesses think it necessary to give back to the communities and environments they operate in and benefit from.
- Care for employees. Family businesses also understand the dependencies that exist within the organisation. The surveyed companies say taking care of employees is first and foremost, trumping even business profitability.
At the heart of these seven principles is the genuine desire and persistence to create a collective better future for stakeholders, society, future generations and the environment. We call this steward leadership.
Steward leaders are guided by the Steward Leadership Compass.
The four values of steward leadership
- Interdependence: View the world as an interconnected system in which your success depends on the success of others.
- Long-term view: Create sustained value for both current and future generations.
- Ownership mentality: Take proactive responsibility to create positive environmental and social impact.
- Creative resilience: Persist to find innovative solutions to disruptive challenges.
Enduring family businesses embody the values’ spirit. These businesses further integrate the values with their organisational values and articulate a stewardship purpose, one that aims to create a collective better future. The best family businesses stay true to their compass, especially in challenging times. Will you be one of them?
What is Steward Leadership 25?
Steward leadership is the genuine desire and persistence to create a COLLECTIVE BETTER FUTURE for stakeholders, society, future generations, and the environment.
In business, this means pursuing a growth strategy that aims to create win-win-win prosperity wherein employees, shareholders and society at large thrive together.
The Steward Leadership 25 (SL25) list showcases projects from for-profit organisations that have demonstrated resolute actions to drive profitable growth by addressing the very challenges that threaten humanity.
Learn more about Steward Leadership 25
Applications for this year’s SL25 list are open from 1 February to 31 May 2024.
We invite you to apply now.
Apply Now
Article by Stewardship Asia Centre and the Steward Leadership 25 Team.
