UK corporates should take a leaf from family firms

Strategy: Sustainable practices seen in family business sector could help restore trust in major multi-national concerns

The UK’s major corporates can learn valuable lessons from the approach taken by multi-generation family businesses.

KPMG’s 2017 CEO Outlook report found 71% of chief executives were worried about an erosion of public trust in their business.

More than two-thirds also said they were placing a greater emphasis on trust, values and culture within their operations in order to improve their longer term outlook.

Ken McCracken, head of KPMG family business consulting in the UK, said many of the attributes that major corporates were seeking were the bedrock on which UK family businesses had long been built.

“The leadership of the country’s largest corporates recognise they have a challenge to turn around how they are perceived,” Mr McCracken said.

“Part of the response by CEOs must be to demonstrate that they define success as being more than purely generating short-term returns.

“Today, protecting the brand is about showing they have taken on a broader responsibility for their customers, employees, society and the environment.

“This describes every family business I have worked alongside or studied in Scotland.”

Mr McCracken said the long-term sustainable outlook of family firms was attractive to the consumer.

Unlike in other business models, Mr McCracken said the bottom line was not always the only measure of success within the family sector – with people, place and the contribution to society often as important.

He said a wider approach to commerce could benefit others too.

“If those leading other types of business want sound advice about what it means in practice to run a business this way, they’d be well advised to learn from the experiences of the families who have been doing it for generations,” Mr McCracken said.

“If success means more than generating returns, but instead taking a long-term approach, being trustworthy and showcasing stewardship, then it’s apparent the often denigrated family business model could represent the best practice for a new type of capitalism.”