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HUMAN RESOURCES


People capital and stewardship


According to the Institute of Family Business, the values passed down through the generations shape the attitude of owners to their stewardship of the assets of the business. This can have a viral effect on the people who work in family businesses, which tend to have a distinct caring instinct which is extended to non-family staff members.


A


healthy approach to valuing staff means that the business goes beyond regarding people as merely employees. It often involves a more holistic approach to individuals, such as giving


staff transferable life skills, instead of job-specific training. There is abundant evidence of a clear link between


businesses with strong cultures and long-term success. Collins and Porras found that one of the characteristics of successful companies was that such firms displayed “cult-like cultures” built on strong values. However, the effect of these strong cultures was that employees either loved or hated working for the company. At Bettys & Taylors, the Yorkshire based confectioner and tea and coffee distributor, they find that: “people tend to stay… (with us)… for one or 20 years. People either love the place and want to stay or quickly realise it is not somewhere they will feel they can fit in.” According to Miller and Le Breton-Miller, whose


research was conducted in North America, employees in family businesses are “more cherished and better cared for than elsewhere. They are also developed to their full potential and thoroughly indoctrinated in company values. In fact, studies have shown that major [family businesses] pay their employees more, give them better benefits, train them more intensively and retain them longer... The personification of the business nurtures loyalty and commitment – a win- win attitude, whereby people feel that by contributing to the business everyone benefits”. They also add that the benefits of working for a family business are more than financial, they are perceived to be more caring for their employees, offer greater job and earnings security, and generate ‘a culture of mutual loyalty’. However, in situations where patriarchy is too strong, the attendant “family knows best” culture may unintentionally suppress innovation and change. Bata Shoe faced


48 FAMILY OFFICE: ASIA TOMORROW


severe challenges in the late 80s and early 90s. Senior non-family executives were hired to address deep rooted strategic issues but the patriarch Thomas Bata Sr. undermined the executive team and the business stagnated. Only when ownership succession was implemented and the next generation, led by his son Thomas Bata Jr., gained control was the business free to embrace change resulting in a successful turnaround.


Investing in people According to a recent Family Business Survey undertaken by PwC, family businesses are less likely than other organisations to make employees redundant, or make deep cuts. The staff of family businesses may be more loyal as a result of this attitude, although it can obviously create challenges if a company needs to downsize to survive. However, attracting and retaining good people is still one of the most critical challenges for family businesses, with 46 per cent naming it as a major issue in the PwC survey. Successful family businesses pay attention to


promoting diversity and opportunity and to removing any obstacles, which might stand in the way of the progress of talented non-family employees. One such barrier could be the lack of career opportunities as a result of


“The personification of the business nurtures loyalty and commitment – a win-win attitude, whereby people feel that by contributing to the business, everyone benefits”


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