Conflict culture, yes please, but only when there is no conflict.
- Especially in companies with purely family management you can find a lack of communication or the ability to deal with conflicts. Mixed or pure external management rate their collaboration better than a purely internal management (grade 2.0 vs. 2.3). However, to address conflicts and to bring them to a viable solution is one of the most important leadership skills of all.
- There is also a backlog in the task distribution and decision-making process: both topics got the lowest percentage in the survey (task allocation; 72.6 percent and decision making process 58.4 percent “agree totally” and “agree”).
Family first! Ancestry is more important than expertise – at least for a purely internal management.
- The well-known concept of ‘business first’ shall continue. For a purely internal management family the subjective aspects (such as family membership) still have a priority. Loyalty to the company got a higher rating than individual performance. But is it not the business first.
- Blood is thicker than water: mainly there are specific requirement profiles for family members who want to enter management. External managers need to leave their position more quickly – the hurdles for dismissal are generally lower for them than for the purely internal family management.
Drawback by steps, usually but not completely: The older a family business is the less family members are in the upper management.
- It is normally remarkable, that the model of purely family management gets less attractive when the business becomes older. In the second and third generation the family members often share the leadership with for example, an external manager. From the fifth generation onwards, only one member of the family leads together with external managers the company (53 percent).
- Double leadership established long ago: Every fifth family is led by a double leadership, which is a rising tendency.
More revenue, less family: Growing companies rely on expertise of external management.
- The total number family members in the company decreases when revenue rises (below 50M Euro: 55 percent pure family-internal Management, over 500M. Euro: 8 percent pure family internal management). But this does not lead to more mixed managements. Rather, the proportion of purely external managements increases with the revenue (below 50M. Euro: 5 percent, over 500M. Euro: 26 percent pure external management).
- External managers prefer to work without internal family managers, because they feel limited in their decisions.
Guide instead of steersman: Supervisor bodies are attractive alternatives for the family to influence the company.
- The bigger the company the more likely they are to have supervisory roles, like boards (below 50 M. Euro: 66 percent no supervisory body, over 500 M. Euro: 25 percent no supervisory body).
- The less family members in management positions, the more supervisory boards in place.