Why women flourish in family businesses

Women are better able to reach positions of power in family businesses than in non-family ones. That is a fact, backed up by lots of research. But why? It is not because fathers promote their daughters for nepotistic reasons, but because of the nature of family. A family is inherently a mixed-gender team. Families have less fear of giving women power in their businesses, because women have power in the family. The business is a continuation of the family structure.

The family group is not a second-best solution, so why should anybody think of teams that contain women as second-best solutions? A family naturally gives a job to a daughter if she is the best for the job, and they would be happy if she asked her brother to join her. They naturally create teams with gender diversity, without the need for quotas or targets.

Women also have a great advantage over their brothers, because they can relate to their fathers in different ways. When a female takes over she can leave the perception with her father that he is still number one. He knows that he is not, but she doesn’t have to clash with him. If a son doesn’t clash with his father he is never seen as legitimate by the employees. So daughters have a real advantage, as long as they are emotionally intelligent.

An example is the German firm Trumpf, a 90-year-old tool-making business with 10,000 employees which had sales of €2.5 billion in 2014. Its CEO is third-generation Nicola Leibinger-Kammüller, whose brother and husband are both board members. She is very good at moderating, motivating, integrating and that is what her father wanted to the CEO to be. That she is a woman is incidental.

Another example is Isabel Knauf, a member of Knauf, another German firm, which makes building materials. She is in her 40s and is a trained mining engineer who has been working on M&As with Thyssen Krupp in Brazil in M&A. Now she is living in Istanbul and heads up the firm in the Middle East, Africa and Turkey while her husband takes on a big part of the work at home and looks after the children. Women are able to take career paths these days that are completely non-typical.

Now, these women are not only able to do this because they are in family businesses. Times have changed, and both would have been unthinkable 30 years ago. Partly this is because women are as well educated as men now, and men accept them in the workplace – especially younger men.

But it is also because they have learned from the mistakes of the older generation of being too nice, or waiting to be given a promotion. (My advice to women who want to get on is: “No smile, no cardigan, and don’t pour the coffee”.)

These days if they want a promotion, daughters in family businesses say ‘I want it, and give me a good reason why not’. That they should get married and have children is no longer considered a good reason. They have learned to speak up and not to fear this will be judged as non-feminine.

Family businesses are less scared of letting women in. Other businesses are often about power games, and if men have a network of other men that they work with, they will try to keep women out. In that sense these are political institutions in a way a family is not. Also, women have always had a powerful role, albeit often behind the scenes as the so-called “chief emotional officer”. These days they are more likely to demand a more public role, one that is recognised.

In a family you simply can’t keep women out. If you have a sister, you have a sister – that’s a role you can’t divorce or fire her from. The feminine element in family businesses is there by birth and it might be the family firms that teach us how to benefit from more inclusion of females in management positions.

Professor Rau is Professor of Entrepreneurship and Family Business at King’s College London