This article is an extract from Transmission Private’s monthly newsletter, The Lede, which tracks the world of reputation management for private clients. You can sign up for the newsletter on our website via the tab at the bottom of this article or by completing the form here.
The best businesses, like the best musicians, recognise that success is fleeting – doing what worked before will only take you so far for so long. For genuine longevity, you need to move with the times, adapting to the disruptive megatrends reshaping your market.
Where do musicians come in? Family businesses could do well to take a leaf out of Madonna or David Bowie’s book. They didn’t wait for change to be forced on them, they saw change as an opportunity. It’s something PwC’s UK family business lead Hannah Harris discusses in this issue, while Keystone’s founder Jonathan Gage shares his insights into the ‘business of family’ and the advisor’s art of nudging. We’ve also got some analysis from the Knight Frank Wealth Report 2022.
How does this affect family businesses again? The disruption facing family businesses is much the same as any other business faces, driven by new technologies, business models and customer preferences. Family firms are theoretically very well placed to adapt, as they typically have a long view of success, and don’t have to persuade short-termist shareholders. However, it can be challenging to think about a radical transformation when the mentality has for so long been the preservation and stewardship of the legacy business.
What’s the key to making it work? Successful reinvention is all but impossible without good leadership. The credibility, trust and respect of the leader are essential for establishing and communicating a clear vision and the purpose behind the change. This allows the family business to bring its stakeholders along with it, whether that’s employees, customers or business partners.
Any advice for how to communicate reinvention? Think carefully about it. In some cases, leaders may need to convince sceptical stakeholders that a digital transformation or major change in strategic direction is required, perhaps by pointing out that the status quo is no longer the safe option. But it’s also a matter of emphasising what isn’t changing – the family’s values, its integrity, its commitment to its people and local community, or its overarching business purpose, which is bigger than any one product or market. Like Bowie or Madonna, don’t think of it as merely a costume change – it’s the next chapter in your story.
Takeaway... To survive and thrive into the next generation, family businesses need to embrace change. They are often well positioned to do so, but it requires credible leadership, clear communication and a strong vision.
