TODAY’S NEWS. TOMORROW’S INSIGHTS.A daily newsletter from McKinsey & Company
Brought to you by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities
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Getting along. In a family-owned business, generations often work side by side. That can present opportunities for different groups to learn from one another, as more mature workers typically provide decades of expertise, while younger workers may introduce new ways of working. Yet generations may also clash over their perspectives on work–life balance and remote work. One family that owns a US lumber and flooring business keeps the peace by valuing each member’s capabilities and role within the company. [WSJ]
Outside CEO onboarding. Most family-owned businesses run by multiple generations will eventually decide to bring in an external CEO. Successfully onboarding an outside CEO requires a deft touch, since the process must factor in the nuances of family member relationships, in addition to relatives’ relationships with other outside leaders. The first stage of effective onboarding is spent learning. Through activities such as reading annual reports, the CEO devotes a month to gaining essential insights about a company. [HBR]
Generating greater value. Resilient and adaptable, family-owned businesses (FOBs)—companies in which founders or descendants hold significant share capital or voting rights—have survived and thrived for decades. In fact, FOBs have created more value and impact than non-FOBs over the past decade, McKinsey senior partner Acha Leke and coauthors explain. McKinsey research finds that between 2017 and 2022, FOBs posted an average TSR of 2.6%, compared with 2.3% for non-FOBs.
Family-owned-business strategies. A McKinsey analysis of 600 publicly listed FOBs reveals the mindsets and strategies that underpin FOBs’ ability to create value. For example, FOBs focus on purpose beyond profits; 93% of respondents from the highest-performing FOBs believe their company has a clear purpose beyond creating value for shareholders, compared with 86% of the overall group of FOBs we surveyed. Discover four critical mindsets and five strategic actions that set family-owned businesses apart.
— Edited by Belinda Yu, editor, Atlanta
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