Family businesses are the lifeblood of many economies, often distinguished by their longevity and the deep-rooted family ties that span generations. Unlike their corporate counterparts, these businesses often blend age-old traditions with modern business practices, creating a unique and complex operating environment that sets them apart in today’s competitive landscape.

On most occasions, at the heart of this enduring success lies a critical, often underappreciated factor: culture. In family businesses, culture isn’t a buzzword or a section in the employee handbook—it’s the very essence of the organisation, a powerful force that guides every decision, interaction, and strategy.

This intangible asset, shaped by a family’s values, history, and aspirations, is pivotal in driving recruitment, retention, and overall business resilience.

How Important is culture in a family business?

Our research into the impact of workplace culture on business performance indicates that while culture is essential for all businesses, its significance is magnified in family businesses where personal and professional lives often intersect.

Similar to non-family-owned businesses, quirky office perks and trendy design features are unlikely to have a lasting impact on a family business’s culture. The true heart of a positive culture lies in the core values that resonate with both family members and employees.

While a strong culture can be a one of your greatest assets, it can also present challenges. Resistance to change, problematic nepotism, and conflicts between family and business priorities are potential pitfalls. However, these challenges also present opportunities for growth and evolution. Actively addressing these issues and adapting your culture to changing market conditions enables continued success and relevance.

Leadership’s role in shaping culture

In family businesses, both family members and non-family leaders play a crucial role in shaping and evolving the organisational culture. Their actions and decisions set the tone for the operational ethos and ethical standards, providing a strong framework that is passed down through generations. Cultivating this culture intentionally is essential for long-term success.

On every occasion that you bring new executives into your organisation, it is vital to reflect on the unique cultural dynamics that define your business. Here are some key factors to consider through this important process:

1. Define cultural compatibility: Before the hiring process begins, clearly define what cultural compatibility means within your family business. This involves understanding the core values, beliefs, and behaviours that have shaped your business over generations. Ensure that these cultural elements are explicitly communicated to your search partner and then ensure they are assessed and benchmarked throughout the recruitment process.
2. Utilise values-based interviewing techniques: Implement interviewing techniques that go beyond assessing technical skills and experience. Focus on values-based questions that help reveal if the candidate’s personal values align with those of your business. This might include scenarios or hypothetical questions that explore how candidates would handle situations that reflect your company’s core values.
3. Engage multiple family stakeholders: In family businesses, the impact of new leaders extends beyond the boardroom to affect family members and long-term employees. Involve various stakeholders in the hiring process to obtain a holistic view of the candidate’s potential fit. This inclusive approach not only helps in assessing cultural alignment but also promotes buy-in from key family members and colleagues.
4. Plan a comprehensive onboarding: Develop an onboarding process that immerses new executives in the family business culture from day one. This should include mentorship programs with family members, participation in key family and business traditions, and detailed sessions on the history and legacy of the business. A thorough onboarding process helps new leaders understand and integrate into your business more effectively.
5. Monitor and support cultural integration: After hiring, continuously monitor how well new executives integrate into your business culture. Provide ongoing support and feedback through regular check-ins and review meetings, ensuring that new leaders can contribute positively to the evolution of your culture.

The link between culture and performance in family businesses

Family businesses often face unique challenges, such as balancing family interests with professional goals and navigating generational transitions. A strong culture can be the glue that holds the organisation together during these times. In fact, our research highlights this, with over 9 in 10 (93%) office workers surveyed saying that workplace culture is important to a business’s overall success, and almost 3 in 5 (57%) saying they think it’s very important. This significance is especially true within family businesses.

Here’s how culture impacts performance in family businesses:

• Promotes innovation and collaboration: A culture that values diverse perspectives and encourages open communication can drive creativity and problem-solving, especially important for navigating a changing business landscape.
• Strengthens family unity: A well-defined culture can help establish clear boundaries and expectations for family members working within the business, creating a sense of unity and shared purpose.
• Attracts and retains talent: A strong culture that reflects the family’s values can attract employees who share those values, leading to a more engaged and committed workforce.
• Increases productivity and employee satisfaction: According to our survey data, which includes responses from more than 2000 office workers, 72% say their workplace culture has a positive impact on their productivity, while 71% say it has a positive impact on their desire to go above and beyond for their employer.

In family businesses, culture is a powerful force that shapes every aspect of business operations and strategic direction. At Redgrave, our expertise in these cultural dynamics enables us to assist your family business in preserving your cultural heritage and leveraging it as a foundation for innovation and growth. We are dedicated to finding leaders who are not only well-aligned for the role but who will enhance your existing company culture.

Our strategic approach involves a thorough exploration of the family and cultural nuances unique to each business, ensuring that the leaders we connect you with become integral to your company’s ongoing success and evolution.

To learn more about how we partner with clients to find and attract talent in an ever-changing, globally connected world, contact David Angel.