Over the past year and more, I've been inspired by our many family business clients who remained resilient at a time of massive global disruption. As I, and the team at KPMG Enterprise, worked alongside entrepreneurs and families who pivoted, adapted and innovated, their actions put into sharp focus what it truly means to be "enterprising."
In practical terms, an enterprising family has a collective focus on preserving its business and its legacy across generations. But on a personal level, it's the definition of enterprising that gets to the heart of successful family-owned companies: "marked by an independent, energetic spirit and by readiness to act," according to one definition. Also "having or showing initiative and resourcefulness."
These characteristics have always enabled family businesses to rise to the challenge, and they are only becoming more important as the world gets increasingly complex and uncertain. However, family businesses also carry a unique dynamic that non-family businesses don't—the families themselves. This, of course, brings its own set of unique rewards and challenges.
While family-owned companies tend to promote trust, shared values and stability within the families themselves, they can also be complicated by such issues as leadership conflicts, disagreements over succession plans, and a lack of preparedness of younger generations. At the same time, they're also going about the work of running their businesses and dealing with the same challenges every business faces. It's a delicate balancing act that highlights why growing and sustaining a successful family business is no small feat.
With these dynamics at play, it's vital to have trusted advisors at the boardroom (or the kitchen) table. That's because family-owned companies are fundamentally different. Their growth and sustainability hinge on a fine balance between the needs of the business and the demands and expectations of family members.
And no matter the business' size or stage, this requires an integrated approach, which means always looking at the big picture to understand where the family wants to take the business. That in turn means everyone working together—with their advisors and with each other—to overcome the challenges they're facing today, as well as those they might face tomorrow.
Though the intersection of family and business is complex, it is possible to manage the balancing act. And with advisors steadying the course, family businesses—and the people behind them—can achieve both long-term prosperity and family harmony. That, after all, is the ultimate goal.
In the coming weeks and months, my colleagues and partners at KPMG Enterprise and KPMG Family Office will explore these and other issues more fully. Please stay tuned!