There is one thing that leaders of family businesses will pretty much always say about what makes them different from their non-family counterparts and that is their long-term vision. They’re not terribly interested, so they say, in fluctuations in share prices, nor the particular political hue of the current government in power, as long as it’s not too extreme.
Economic, financial and political upheavals will come and go, what matters to them is whether their business will be around to pass on to the next generation in 10, or how ever many years in the future.
Of course, that’s not to say they aren’t concerned about currency and interest rate fluctuations, and for the ones that are listed, gyrations in stock market indices. Currency movements will affect their input costs and how much they receive for their exports. Interest rates will affect how much they pay for their debt, if, in fact they have debt, which, many of them don’t have. But most would say they are less interested in these short-term issues, than their non-family counterparts.
Here’s a remark from Bouygues chief executive and chairman Martin Bouygues, the CEO and chairman of the big French family-controlled conglomerate Bouygues, that typifies this commitment to the long term. “The Bouygues group has always strived to write an industrial story that creates value in the long term with its employees and suppliers, and in the interests of its customers.” The second generation head of the business made these remarks around a year ago as his firm was facing a hostile bid for part of its business. He also added: “Not everything is about the money.”
At a time when markets are volatile following the vote in the UK to leave the European Union, the long-term values of family businesses are likely to be tested. There is also the added concern that so-called Brexit might unleash further political instability in Europe as other popularist-led movements demand greater freedom from the EU. No one really knows what’s going to happen – financial markets might quieten down faster than we expect. Things rarely travel in a linear trajectory.
Nevertheless, it would appear to be a time, at least for family businesses in Europe, to very much place their adherence to long-term thinking at the centre of how they run their businesses during these uncertain times. That shouldn’t be too difficult, particularly for the ones that have lived through difficult times in the past. For them, Brexit should be only a minor annoyance, rather than anything to get unduly worried about.