Protecting family businesses means protecting tomorrow’s economy

The recent report announced by the Malta Developers Association confirmed a trend that was already on the horizon – that the property market has started showing signs of a slow down. “It was not a matter of if, but when,” says Mark Aquilina, Managing Part

country like ours.

The signs are there already. So now, what counts most is knowing where to go from here. And the answer is very simple. Before the possibility that a slow down starts making itself felt more, we should take stock of one of the most important backbones in our economy – small businesses, most of which, are family-owned.

Most Maltese companies are family-owned or know their roots as family businesses. These have always thrived. Indeed, even when the economy did slow down, family businesses possess that very important dynamic quality that allows them to adapt quickly to changing economic landscapes. And perhaps this is one of the reasons why most Maltese businesses are so resourceful.

The other side of the coin however is the fact that the management of a family business can be a very complex task because one is not only dealing with the company structure but with a structure that carries a very heavy emotional load.

A family business is everyone’s baby, and therefore, change becomes a struggle, even when the family members know that it is the only way forward. This is a crucial stage where the most important thing is to put the right people in place to make that change possible.

The belief that people come first must be the fundamental principle on which the growth of any organisation is built. It is at this stage that specialists need to come in as the outsiders to give companies a clear non-emotional picture of where their business stands and who mediate between family members by helping them set out the basic values of the organisation to fit into its vision.

It is only when a solid corporate culture is in place that we can start breathing back a renewed life. Of course, there can never be a onesize-fits-all model, but our experience has taught us that every business that seeks a new lease of life needs to build its culture on four basic values – learning, integrity, fairness and effectiveness.

Letting go is always a struggle, especially when the younger generation of family members start showing signs of wanting to be part of the bigger decisions. And the root of this struggle lies in a number of misplaced expectations such as entitlement where the next generation thinks it deserves what the parents have, the expectation that parents should treat each sibling equally, the expectation that parents should provide all the wisdom when letting go and the expectation that it should be the parents who iron out conflicts among the siblings.

Of course, expectations bring repercussions. Parents who have these expectations of themselves or who expect things from their own children, inevitably face great frustration. On the other hand, the next generation members who cling to these expectations would only be postponing their own personal growth and development. I see this happening from our experience at NOUV, as we support small businesses especially family-owned companies identify, design and execute their future strategy. And in fact, I can safely say that a good 95% of the conflicts we see are due to a parent’s inability or fear to let go of the driving seat. It does take a leap of faith to take a step back and watch from a distance, the way a good parent does, when the children want to start asserting their individual role in the world. Letting go remains a two-way street. On one side, children should commit fully to the family cause, “step up their game” and show that they are competent and eager to take the family business to the next level. On the other side, parents should let go when they are economically secure and believe that their children can do a better job. This happens through a long transition period which I believe should be steered by an outsider who can oversee a smooth transition that is not driven by misguided emotions or familial competitive streaks but by expertise, rationality and assertiveness.

Mark Aquilina is Managing

Partner – NOUV