Kicking the Habit

Abstract

Our collective bias has been to study large, publicly traded companies. Not only do these behemoths represent a tiny fraction of organizations, but they have also served as uninspiring role models driven by the short-run objectives of managers and owners alike. By contrast, outstanding family-owned or family-controlled businesses, to which we have devoted relatively little attention, often outperform by marching to the beat of a different drum. They are managed for the long run. Among the most durable and best performing family businesses, this long-run approach shows up as four priorities: continuity and persistence in pursuing a substantive rather than a financial mission, exceptional attention to the internal community of employees, unusually close connection to key external stakeholders, and courageous commanding leadership that resists pressures from shortsighted owners. We would do well to learn more about these types of organizations.