Innovation is key to family business sustainability
The head of LAU’s Institute of Family and Entrepreneurial Business tells us more about the challenges and successes of private corporations.
Every business organization has its unique set of challenges and problems, and family businesses are no exception. While many of these problems exist in corporate business environments, they can be amplified in privately held concerns.
“One of the challenges facing family businesses is making sure that there is a smooth transition from one generation to the next and that the right person is appointed in a position of leadership,” says Josianne Sreih, director of the Institute for Family and Entrepreneurial Business at LAU (IFEB).
Sreih argues that succession cannot be looked at as a point in time but rather as a process. “The successor should take the lead by learning about the history and culture of the business, in addition to the strategic plans that were previously adopted and which led to its success in the first place,” she explains.
This topic was further developed at a forum on ‘Innovation in Family Business,’ held earlier in December by Al Iktissad Wal Aamal Group. The gathering brought together experts to examine the challenges facing such businesses and the best means of dealing with them.
Participants agreed that innovating was key to keeping up with international competition.
“We have to spread awareness among the coming generations on the importance of innovative strategies to ensure the sustainability of such business models in the market,” stressed Economy and Trade Minister Alain Hakim.
Likewise, Raouf Abou Zaki, CEO of Al Iktissad Wal Aamal Group, said “family businesses often face the challenge of integrating new work techniques with old strategies adopted by the original developers of the business and which led to its success upon its inception.”
Sreih, explaines that private corporations should understand that the founder’s era needs to come to an end when new structures and strategies are put in place. She argues that family businesses could take several measures to help them overcome the difficulties met while striving to maintain their sustainability in the market.
“One of the keys for them is to keep close contact with their customers, which would enable them to be well aware of their needs,” she points out.
Sreih reveals that a study conducted by IFEB showed that trust among family members has a very positive effect on the performance of organization. “The more trust you have among family members, the more the business has the ability to grow and achieve better financial results,” she claims, adding that studies have also showed that companies with women on their board of directors registered better performance than others.