Inside the Strategy Room
214. The secrets to outperforming in family-owned businesses
Aug 16, 2024
Eduardo Asaf, Acha Leke, and Francesco Malatesta from McKinsey tackle the secrets behind family-owned businesses. They reveal how these companies often outperform their non-family counterparts and contribute significantly to GDP and employment. The trio discusses key strategies for success, such as capital allocation and purpose-driven governance. They highlight the unique characteristics of the top-performing family businesses, focusing on long-term planning and talent management, which can lead to substantial value creation over the next decade.
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Quick takeaways
- Family-owned businesses contribute significantly to global GDP and employment, highlighting their importance in economic growth and job creation.
- The most successful family businesses excel in diversification and reinvestment strategies, achieving substantial revenue from non-core activities while maintaining a long-term focus.
Deep dives
The Economic Significance of Family Businesses
Family-owned companies are crucial to the global economy, contributing about 70% of global GDP and 60% of worldwide employment. In the United States alone, family businesses account for 60% of jobs and 80% of new job creation. The prevalence of family businesses is even higher in emerging markets, with 75% of the top 500 companies in India being family-owned and similar statistics in other regions like the UAE and Saudi Arabia. This analysis emphasizes the necessity of understanding family businesses, which are not only dominant players in many economies but also critical for job creation and economic growth.
