Family businesses tend to get more respect from the public than other businesses, according to new research from London-based specialist communication agency Transmission Private. Based on a 2,000-person survey conducted by OnePoll, branding a private company as a “family business” resulted in a significant and powerful reputational premium for the business. In fact, 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.
This so-called “reputational premium” was seen in all genders, regions, and age groups. In fact, the marked boost in reputation was at its strongest among 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.
Privately-held businesses are missing a branding opportunity if they fail to give visibility to their family ownership as part of their PR strategy
“The reputational benefits of being seen as a multi-generational family business are now clear, obvious, and significant,” said Jordan Greenaway, managing director of Transmission Private, in a press release. “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, colorless 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,” he continued. “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.”
When it comes to succession, family ties get trickier
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 among customers, partners, and peers that they might not have the skills, competency, or networks to continue running the business successfully.
“This is worrying because many next-generation members will have been actively involved in the business—just not visibly,” said Luke Thompson, a partner at Transmission Private, in the release. “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,” he added. “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 emphasized in collateral and communications activity.”