Balancing family values with business performance is a unique paradox in family businesses. The degree of professionalization has a big influence on how businesses measure all of these performance metrics, which range from innovation and financing to competitiveness, family harmony and corporate growth. Research indicates that family businesses perform better financially and have a better reputation for longevity compared to their non-family competitors, particularly where they follow professional management standards. Professionalization introduces formal oversight, clear definitions of roles and objective measurement of performance, which offsets the potential conflicts due to family relations (Jaskiewicz et al., 2015).
Our business remains 100% owned by the founder with centralized control and decision-making. Although preserving control in the family and true to core beliefs, it also has the possibility of limiting entry to external capability and objective judgment of performance. To offset this, our firm could benefit by implementing professional management practices (hire an outside managers) without diluting family ownership. But each firm needs to assess on their own weather its current size and complexity warrant the introduction of an external manager. A realistic picture of the company's healthiness can be obtained by utilizing strategic performance measurement methods such as financial metrics, buyer satisfaction standards and achievement indicators (such as KPIs). These factors can guarantee that family culture blends with the corporate world to provide long-term growth.
Sources:
Jaskiewicz, P., Combs, J.G., and Rau, S.B. (2015) 'Entrepreneurial legacy: Toward a theory of how some family firms nurture transgenerational entrepreneurship', Journal of Business Venturing, 30(1), pp. 29-49.