We observed a pattern in the strategies that were chosen among family businesses that reflected two key factors: the leadership and the ownership composition of the company.
Is the business led by a family member or a non-family CEO?
Are the company’s shares highly concentrated among a small number of shareholders or are they widely dispersed among multiple family (and potentially non-family) members?
From a global perspective, family ownership is high among the survey respondents. On average, more than 90 percent of their companies’ shares are owned by the family, keeping control of the business firmly in family hands. In addition to the family ownership, companies led by a family CEO are exercising the additional authority of the family to direct strategic decision-making while also controlling the assets of the business.
When we looked, for example, at businesses led by a family CEO, we saw a pattern: the higher the family’s involvement in the business, whether that was in leadership, managerial or ownership roles (or a combination of all three), the more likely it was that their initial response to the pandemic was to focus on the welfare of their employees and the communities where the families live and operate.
The lower the family’s overall involvement, the more likely it became that the leader of the business (whether that was a family or non-family CEO) would make difficult business decisions regarding the company’s employees, overall cost reductions and the potential restructuring of the business itself.
These two factors, and other widely recognized business family characteristics, allowed us to identify distinct family business types that share similar qualities. We have characterized them as four family business personas that provide a perspective on the patterns of behavior within different family businesses.
When the family/non-family CEO and family ownership factors were combined, we were able to identify four clusters of different family business types. They share common characteristics and adopt similar strategies based on their characteristics and they are presented below in four illustrative family business personas: the “Family Corporation”, “Family Enterprise”, “Family Consortium” and “Family Venture”.
The Global family business survey, COVID-19 edition relied on a convenient sampling strategy replicated across multiple countries, regions, and jurisdictions. Each affiliated team identified potential respondents eligible for the project considering the industry characteristics and the business structure of their own country. The survey was designed by a research team with more than 10 years of experience in conducting qualitative and quantitative research from the STEP Project Global Consortium, European Family Businesses (EFB) and KPMG Private Enterprise. Previously validated scales have been used in the questionnaire to define each question. The questionnaire was firstly generated in English and then translated in to 13 languages. The survey was launched in June 2020 and completed in October 2020. In total, 2,493 family businesses and 517 non-family businesses completed the questionnaire from 75 countries, regions, and jurisdictions in five world macro-regions: Europe, the Americas, Asia Pacific and the Middle East & Africa.