According to the latest research by McKinsey, family firms represent around 40% of the world's largest companies but there is a need for fine tuning and continued evolution to ensure they continue to prosper.
Family firms are, on the whole, in business for the long term, many acting as stewards for the next generation, but there is no room for complacency and care needs to be exercised at all times.
As we enter into 2017, now might be the right time to review family governance procedures, begin conversations about succession, start to engage with the next generation or to consider the strategic direction of the business for the next 10-20 years.
Big decisions need big conversations but the family firms that address the challenges now will be best placed to achieve their long term ambitions.
Overall, family businesses deliver returns on assets that are comparable to or even higher than those of state-owned or widely held companies. But what’s noteworthy about their performance is asset productivity and brand value: their asset turnover, or ratio of revenues to invested capital, is roughly twice that of other companies, and they account for 80 percent of the brand value of the world’s most valuable labels. These attributes are especially strong in family businesses from developed economies, possibly because many of those in emerging ones focus on rapid growth and expansion.