Family Businesses Grow More Than the Rest, Looking Abroad

ACCORDING TO THE LATEST AUB OBSERVATORY, 45% OF ACQUISITIONS MADE BY ITALIAN FAMILY BUSINESSES ARE MADE ABROAD, IN CULTURALLY DISTANT COUNTRIES TOO. 9.1% OF LEADERS ARE WOMEN, MORE THAN IN THE REST OF EUROPE. THREE SUCCESSFUL MODELS HAVE BEEN SINGLED OUT

Italian family businesses continue to grow faster than non-family ones, especially in medium-to-large size groups (turnover of more than €50 mln), according to the results of the eighth AUB Observatory (AIdAF, UniCredit, Bocconi) on Italian family businesses edited by Guido Corbetta and Fabio Quarato of the AIdAF-EYChair in Strategic Management in Family Business in Memory of Alberto Falck. Standardized to 100 the revenues in 2007, in 2015 medium-to-large family businesses had reached 145.2, the rest only 131.8. The same figures for companies with €20-€50 million in revenue were 145.8 and 142.6 per family for non-family members.
 
In the context of a stagnant domestic market, the main reason of the faster growth rate seems to be a greater propensity to conclude acquisitions or joint ventures abroad. While non-family businesses realize 73% of their acquisitions in Italy and 27% abroad, family businesses go abroad in 45% of the cases and remain in Italy for 55% of the acquisitions. After the crisis, moreover, family businesses have been more daring, moving into more distant countries from a cultural point of view.
 
This year the Observatory compares the top 100 family firms listed in Italy, France, Germany and Spain, and counters some clichés. The openness of Italian family businesses to external managers is not, in fact, unlike that of France and Spain and the percentage of foreign leaders in Italy is even higher than that of the other two countries. Germany alone stands out from other countries also in reason of the adoption of a different governance model - the ‘dual’ model - which involves a higher presence of non-family managers and foreign leaders in the management board.
 
Even for average age of the leaders (57.5 years, in a range that goes from 58.5 years in Spain to 56.1 in Germany) Italy is not substantially different from the rest of Europe, while outstanding for diversity: the percentage of women leaders (9.1%) is the highest in Europe.
 
Finally, the Observatory identifies and analyzes 200 family businesses of all sizes that show financial performance consistently above the median of their industry from 2008 to 2014. "We have identified three models of success at different stages of the life cycle of a company", says Corbetta. "For first-generation family businesses the essential point is the presence of the founder, who is often not young, and a family leadership. This model works regardless of company size. At a later stage, the company has to choose whether to pursue growth or become a champion of profitability, while maintaining limited dimensions. Well”, says the Head of the Observatory, "in the case of small size the maintenance of the family leadership and a board of directors closed to non-family turn out to be the best option. The largest and most successful companies, however, are characterized by the absence of the founder, replaced by a younger leader, an open board and a leadership that can open up to non-family".
 
The Observatory monitors all 15,880 Italian companies with turnover over €20 million and then focuses in more detail on the 10,391 family-controlled companies, which have a total turnover of 804 billion euro and employ 2.3 million workers.

 

by Fabio Todesco