However, evidence suggests that family-owned companies run by sons or daughters on average under-perform their professionally managed peers.
The Business Department is expected to encourage wider use of external expertise and non-executive directors on boards as part of a package of measures.
All mid sized companies that recognise they have reached the limits of their own skills are set be helped to bring in outside expertise. The Institute of Directors is understood to be drawing up a database of experienced non-execs as a new resource. Business schools could also be asked to redesign their MBA programmes to accommodate the needs of family owned companies.
All very nice: but a large part of what the management of large companies does is actually deleterious to the performance of the company. It\’s only possible for them to do it because the margins and buffers of a large company can absorb the waste.
In medium sized companies salesmen go and sell. In large ones they have diversity meetings.
OK, that\’s not quite true, but I can\’t remember whether it\’s Peters or Parkinson who points out that the best way to bankrupt a medium sized business is to bring in the ex-Chairman of a large one. What he\’ll spend on redecorating the executive suite is what a medium sized business would spend on developing the next version of the product.
They\’re just not the same worlds and the skills (hah!) aren\’t transferable in quite the manner people seem to think.
And asw to small business: how many people in a large corporation have ever thought about cash flow? And how many (surviving) small businesses think about virtually nothing else?