Businesses led by a husband and wife team are often more profitable than other leadership structures, but were less successful at generating growth, particularly international growth, according to new research.
The study, carried out by Milan-based Bocconi University professors Guido Corbetta and Mario Daniele Amore, found businesses run by husband and wife leadership teams can often be better for profitability, compared with other types of leadership structures. This, said the research, was because husband and wife leadership teams exercise a lot more pressure on costs than other types of senior management structures. “They work together to keep a tight control of costs, and are good at cutting costs when they become an issue,” said Corbetta.
In Italy, where the research was carried out, around 7% of family businesses are led by a husband and wife team. The most famous of which is Prada, where Miuccia Prada and her husband Patrizio Bertelli run the highly successful luxury goods business together.
Nevertheless, the research also found that when it came to growth, particularly international growth, there was not such a positive outcome. Corbetta said that this is probably because such structures are more likely to be closed to new ideas about how to grow the business. “A husband and wife team is less likely to listen to non-family managers and other members of the family on ideas to improve growth. And they are even more closed to outside views on growing the business internationally,” he said.
The research also looked at businesses where a husband and wife team also have another member in the leadership team. Usually these structures involves a parent, or a sibling from either the husband or wife’s family. These type of troika leadership structures, with three members of the family, tend to be less profitable than married leadership structures, the research found. But, they may encourage less closed views and help with growth, said Corbetta.