Market trends keep changing not only in Kenya but allover the globe. To successfully remain on tract, it is important for each company to keep up with the market dynamism. A recent trend which has emerged in the 21st century is family businesses are thriving more than they ever did before.
In the last century, it seemed the bigger the company, the better the opportunities. However, in the 21st century with slower growth, lower returns and frequent economic crises, the landscape has changed.
Today it’s about surviving in a competitive world. Qualities that may have hindered family businesses in the past, are giving them the edge and the ability to adapt.
These are some of the reasons why family businesses are thriving more in the 21st century:
Keeping finances in check
Family businesses tend to be more cautious with spending than their non-family counterparts, purely because it’s the family’s money. While this may mean they miss out on some opportunities, it also protects them in good times and bad.
Interestingly, in the last economic cycle, family-run enterprises entered the recession with leaner cost structures in place, which meant they were less likely to make major redundancies.
There’s also been a shift in today’s economy from quantity to quality of investments. This better suits family businesses who tend to make less investments, but ones that are crucial to future-proofing their business.
When times are tough, one of the first things that is quite natural for companies to do is to cut their investment in learning and development.
One key point to note is that if you invest in people when times are tough, they will be prepared to go the extra mile for you.
The value of values
The 20th century was the era of the ‘company man’. Employees exchanged long-term loyalty for a liveable wage and pension.
Now businesses need to go further. A study by Bain & Company revealed that we are living and working in a new era. Employees want to be inspired to work hard because they believe in the company’s values and missions.
In this values-based culture, family businesses often with deep-rooted values retain employees more. For example, there’s only nine per cent staff churn at family businesses compared to 11 per cent for non-family businesses.
Research suggests this loyalty is down to greater trust, stronger culture, better investment in training, a clearer purpose and closer relationships with employees and stakeholders.
Sustainability
A company’s sustainable footprint is key in the 21st century. However, for family businesses it’s not an add on, but a responsibility felt deeply by the family and staff.
Who knows what will happen in the centuries ahead. But for family businesses to continue to thrive in an ever-changing world, cultivating their traits, values and sense of responsibility within the next generation would seem to make good business sense.