I used to think I suffered from poor work-life balance while working for a large corporation, when I slept with my smartphone and responded to queries from colleagues before the break of dawn.
Then I left to start my own company where I work closely with my husband, and simultaneously took a greater interest in another business run by my extended family. It’s not uncommon for the first words out of our mouths in the morning to be work related. Family dinners can often turn into our own version of a work event. When you work with your family, that distinction between home and professional life can quickly disintegrate. But I wouldn’t change a thing.
Still, it took me some time to embrace the idea that family-run businesses come with a real competitive edge. Despite the fame and success of many families that control companies – the Waltons in the United States, or, in Canada, the Thomsons or the Westons – I naively dismissed those who entered family businesses as taking the easy route.
The data tell a different story.
A recent report published by the Harvard Business Review found that publicly listed family businesses outperformed non-family businesses during the 2001 and 2008 recessions. The authors of the study, Saim Kashmiri, from the University of Mississippi’s School of Business Administration and Vijay Mahajan, from the University of Texas’s McCombs School of Business, attribute the results to three main differentiators in their marketing strategies. Unlike non-family businesses, the companies didn’t hold back on new product launches during the recessions, they maintained the same level of ad spending and they kept their emphasis on corporate social responsibility, despite the state of the economy.
The authors concluded that the actions of family businesses during trying economic conditions are partly driven by their concern for future generations and preserving their family name – tactics that non-family-run companies should consider emulating.
In Canada, a 2013 report by the Clarkson Centre for Business Ethics and Board Effectiveness at the University of Toronto’s Rotman School of Management found that family-controlled, publicly listed companies outperformed their counterparts on the S&P/TSX composite index between 1998 and 2012, and in many cases rebounded faster from various financial downturns, including the financial crisis of 2008 and the global recession that followed.
About half the Canadian work force is employed by a family-run enterprise and they create anywhere from 45 per cent to 60 per cent of Canada’s gross domestic product, according to the Business Families Centre at Sauder School of Business in Vancouver, making them an important economic engine.
Jacoline Loewen, formerly with a financial advisory family business for eight years, is the author of Money Magnet: How to Attract Investors to Your Business. She attributes the success of family enterprises to family pride.
“There is that special magic that occurs when you join a company started by your grandfather or grandmother. It inspires family members to make big strategic switches … and [gives them] the confidence and the voting power to do so,” said Ms. Loewen, adding that family members feel an extra bit of motivation to see their kin succeed. Family enterprises also tend to promote strong values and cultures. When you are chief executive officer at a large corporation, it can be too easy to focus only on the next quarterly results, she explained. In family enterprises, if a quarter doesn’t turn out well, they often have the patience to push through.
Still, working with family comes with its own challenges, said Leigh Mitchell, president and founder of Women in Biz Network, a national organization dedicated to the professional development of women.
Ms. Mitchell’s husband, Rob, left his corporate job in 2013 to help her run the company. She also employs her sister, Jennifer Boucher, who runs their Vancouver operation. While working together has afforded the couple greater workplace flexibility and strengthened their relationship, managing a home office with their children around can complicate business discussions.
“The drawback is that there isn’t a clear line of work and home life any more but we try and put aside family and couple time where we don’t talk business. We are getting better at that,” Ms. Mitchell said. She advises others who work with family to ensure that the lines of responsibility are clear so that members aren’t arguing over who makes the final call.
Would I ever change my mind about working with family? Not a chance. Even if it does mean I get business updates at 6 a.m., and end up shouting comments about a business deal from the shower.
Leah Eichler is founder of r/ally, a mobile collaboration platform for enterprises. E-mail: email@example.comReport Typo/Error