No Longer a Family Matter

MORE AND MORE FAMILY BUSINESSES RELY ON EXTERNAL MANAGERS. WITH EXCELLENT RESULTS, AS EXPLAINED BY DATA FROM THE AUB OBSERVATORY

Italian family businesses are increasingly inclined to recruit top managers from outside the family. According to the AUB Observatory data collected by Guido Corbetta, Fabio Quarato and Alessandro Minichilli, 23% of Italian family-owned businesses with turnover between 20 and 50 million euro have shifted in the last two years from a family leader to a non-family leader.
 
It happens for at least three reasons, Corbetta says. First, companies that overcame the economic crisis now face a challenging time that require skills that family members may not have. Second, customers are becoming increasingly sophisticated and, especially in B2B businesses, they prefer to relate to non-family managers. Third, generational change sometimes create tension between family members that is resolved by involving external managers.
 
There are implications. “The process of choosing a non-family CEO or General Manager requires specific skills and this partly explains the headhunting industry growth”, Corbetta says. “After choosing a non-family leader, families exert control of the company through the boards of directors that thus becomes more and more important. CEOs must be held accountable for the company results, but family members have to learn not to intervene in the day-to-day business operation”.
 
Is a non-family internal manager preferable to a non-family external manager? AUB data do not answer the question. In any case, this is not an easy process. In fact, the shift from a family leader to a non-family leader is sometimes unsuccessful. The ideal candidate must possess both competence and the sensitivity necessary to work side by side with entrepreneurial family members. “This is why it is always a good idea to select people who are experienced in family businesses”.

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The Political Influence of CEOs
 

by Claudio Todesco