Family businesses are much more well-thought-of than other businesses, according to a new landmark national survey.
Based on a 2,000-person survey, the research found that branding a private company as a ‘family business’ resulted in a significant and powerful reputational premium for the business. Nearly 66 percent of the public would think more positively of a business if they found that multiple generations of family members were active in its management.
Conducted by specialist communication agency Transmission Private, the so-called ‘reputational premium’ was seen in all genders, regions, and age groups. In fact, the marked boost in reputation was at its strongest amongst the very youngest respondents, with nearly 70 percent of respondents between 18 and 25 years of age saying they would think more positively of a family business.
The results come at a time when many businesses are scrambling to improve their reputations as the corporate world comes under fire from increasing levels of consumer activism — on issues as varied as sustainability, diversity, and pay — as well as finding themselves on the sharp end of difficult questions about reliance on government support to weather COVID-19. The research suggests privately-held businesses are missing a trick if they are failing to give visibility to their family ownership as part of their public relations strategy.
Jordan Greenaway, Managing Director of Transmission Private, said: “The reputational benefits of being seen as a multi-generational family business are now clear, obvious, and significant.”
“Sadly, there is sometimes an inclination amongst family businesses, especially once they get to 250 employees and above, to adopt the positioning of a publicly-listed, colourless corporate entity, airbrushing the family out of its public profile.”
“We are now proactively advising businesses to reverse this, giving careful visibility to their family ownership and values. This may mean showcasing the business’ family heritage on their website or within collateral, or feeding family ownership messaging into communications and PR campaigns.”
“Many of the biggest family businesses worry that giving visibility to their private ownership will expose family members themselves to criticism, but this is misguided. Clearly, the prominence of the family in the branding will differ from company to company, but this is not a discussion that should be shied away from.”
The research also found that succession events, where a younger generation takes over management of a business from an older generation, throws up particular communications risks to family businesses. In fact, more than 1 in 4 people said they would think negatively of a family business if a younger member of the family was appointed to management out of the blue.
The sudden appointment of a next-generation member to a company leadership runs the risk of triggering concerns amongst customers, partners, and peers that they might not have the skills, competency, or networks to continue running the business successfully.
Luke Thompson, a Partner at Transmission Private, said: “This is worrying because many next-generation members will have been actively involved in the business — just not visibly.”
“We are now advising family businesses to get ahead of the curve on this front. Family businesses need to start giving gradual visibility to next-generation family members up to a decade in advance of transition events, whether that’s on their website or within press announcements.”
“Next-gen members should also be treated as a reputational asset to the business and its reputation. They often will have developed new skills from having spent at least part of their career outside of the family business. The new skills they are bringing to a business should be emphasised in collateral and communications activity.””
Transmission Private is the leading global strategic communications adviser to successful individuals, families, and their companies. The poll was conducted by OnePoll, which is a member of ESOMAR and employs members of the MRS.The family business premium - January 2021