It strikes me that one of the most interesting areas of research around the world of family enterprises today is innovation. There are a number of reasons for this, but, from my perspective, two stand out.
One is obvious and involves how family businesses continue to remain innovative even though the original entrepreneur may have long since died. But, the other reason, and I think the more fascinating involves two interconnected points. Talk to any family business owner and ask then about innovation, and they will inevitably become very enthusiastic. But they will almost always give a completely different answer to the question than their counterparts at other family businesses. So, here’s the bigger point: there’s a lot going on around innovation in family enterprises, and the challenge for the advisory world is to better interpret these different themes emerging around innovation.
A recent Harvard Business Review article by academics Nadine Kammerlander and Marci Van Essen underlines the growing importance the subject of innovation is becoming for family businesses. It also showed how family businesses are often much more innovative than non-family businesses. Of course, that view would appear to be counterintuitive. How can a family business be more innovative than a Silicon Valley startup? But then, businesses don’t survive over multiple generations by being bureaucratic, they need to continually innovate. And often they bring the next generation into the business precisely because of this reason.
But what further makes this such an interesting subject is what constitutes innovation for one family business is likely to mean something completely different for another family business. The challenge for us as observers of the sector is to look at these different views and come up with some common themes, but also highlight the differences.
Work by academics and the advisory community is highlighting the growing importance of innovation and the family business. But I believe it is still in its infancy, and that’s what makes it so interesting.
Source: Bain, David., April 3, 2017, http://www.famcap.com/articles/2017/4/3/viewpoint-the-growing-interest-of-innovation-at-family-businesses