How To Embrace A Family Enterprise Perspective And Be More Successful

Forbes

26-03-2025

Although public companies are often seen as the height of success, they're frequently both driven and restricted by short-term thinking and quarterly earnings reports. Family enterprises offer a powerful counterpoint, according to Devin DeCiantis and Ivan Lansberg, authors of The Enduring Enterprise: How Family Businesses Thrive in Turbulent Conditions. The family business narrative is grounded in multigenerational stewardship and deep relationships, resulting in organizations that are more resilient and sustainable.
In a recent interview, Lansberg and DeCiantis explained how the family-business approach to time, risk and value provides models that other businesses would benefit from adopting.
Family businesses are often perceived as corner candy stores or dysfunctional drama factories. 'The stigma that enterprising families may have about themselves, or the prejudice that the world might have against them, can come from popular culture,' says DeCiantis. 'It can come from the HBO Succession series. It can come from the Shakespeare tragedies.' But family business are actually 'some of the largest and most systemically important organizations on the planet.'
The stereotype about family businesses being 'small or parochial is just a fallacy,' says Lansberg, but it persists because most family businesses fly under the radar. 'Some of the world's leading brands are family companies,' including 35 percent of the Fortune 500. 'The family companies that do best are often private, are often quiet, and are often ones that we don't hear about. They're able to thrive without boasting, as it were, because that's, in fact, often a family value—a kind of humility that comes with being able to do this.'
Family businesses build for future generations, strategizing and planning in decades rather than being 'kidnapped by quarterly reports,' Lansberg says. Because they don't feel the pressure of satisfying financial markets, they're 'able to make substantive decisions that are for the longer term.'
The goal of generating long-term value creates 'the idea of having a relational mindset, as opposed to a transactional mindset,' says DeCiantis. ''We're not just trying to extract as much as we can from our employees, from our suppliers, from our customers.' This is an iterative game.' But 'it's a marathon, not a sprint. And enterprising families get it because they're multi-generational by their nature. The ones that get it right are thinking about their kids and their grandkids as they're planning and deploying capital.'
Family businesses invest in trust in ways that other organizations can't, Lansberg notes. 'In order to build trust and credibility within the marketplace for capital, for talent, for customers, we need to demonstrate our commitment to creating shared value.' This is in contrast to 'the just-in-time mindset of greed and trying to extract as much as you can out of the organizations you lead.'
Although it can require more investment in everything from inventory to redundancy in multiple locations to extra service staff, family businesses are pragmatic about expenses, focusing on just-in-case scenarios, says Lansberg, which are crucial to 'spare yourself and your stakeholders the pain of surprises.'
Although most people 'think of family enterprises potentially as underperforming their peers over the long run,' says DeCiantis, 'it turns out that they outperform their peers significantly.' Perhaps not surprisingly, 'enterprising families tend to be better at managing the downside than chasing the upside.' During boom times, he notes, nonfamily-controlled companies start 'putting their pedal to the metal and racing ahead, but they're the first ones are going to fall off the cliff when the road curves and they've been speeding too far ahead.'
One Latin American family business leader with whom Lansberg and DeCiantis worked found 40 percent of his time was devoted to the crisis of the moment, and that he needed to adjust to these abrupt changes. To accommodate the unexpected problems that occurred overnight, he stopped scheduling morning meetings altogether. Instead, he used mornings as firefighting time and afternoons for planning. 'If I worry about today in the morning,' he said, 'in the afternoon I can think about tomorrow and maybe a week or two from now, if I'm lucky.'
Successful family business owners are hyper-vigilant rather than resting on their laurels. 'Maybe this success will terminate or conditions will change such that our operating model will no longer be fit for purpose,' says DeCiantis. The challenge is not to 'worry about the future too much. But you can make the mistake on the other side, which is to presume that everything is going to be fine forever. On balance, you don't want to be Chicken Little, but you also don't want to be Wile E. Coyote running off the cliff and then realize the ground isn't there beneath your feet.'
For nonfamily institutions, he says, 'as the last crisis fades from memory, it's a lot harder to get people' to think about risk. 'It's not as sexy as growth or as acquisitions, or as transformational as AI,' but 'the further away you get from that last trauma, the easier it is to forget what it is that we did and to slip back into old patterns of the blind pursuit of efficiency and profit.'
The intergenerational nature of family enterprises—along with family dinners and gatherings—permits owners to hand down real-world lessons, whether successes or failures. But 'this doesn't just happen by osmosis,' says Lansberg. It requires 'awareness that you have to learn to manage your stakeholders if you want to have their capital to be able to grow the business. Engaged owners don't wake up in the morning with an epiphany—'Oh, I care about my family company.' They are the product of a set of leaders who are reaching out to them, keeping them informed, downloading the values on them, letting them know the impact of their family company in the communities within which they live. Imbuing the activity with a sense of purpose and meaning matters hugely and good family enterprise leaders are excellent at that.'
The best leaders also 'really do think about the family as a family,' he adds. 'They harness the good things that families have to offer. They pay attention to the ages, they group people into cohorts and they create opportunities for family connectivity and celebration and pride of identity.'
Although family businesses sometimes get a bad rap for being insular and provincial, when they're well-governed, they provide powerful examples of stakeholder-focused, adaptive organizations and processes, usually because their executives are willing to invest beyond their own time and selves.
If other leaders are similarly willing to become company stewards, treating their teams and communities with vision and devotion, they too could reap the benefits of deeper connection with and loyalty among all stakeholders and, ultimately, greater longevity and success.