More and more family businesses are vigorously promoting their ‘family’ status as a strategic advantage
SC Johnson, the $10 billion cleaning goods giant, didn’t always refer to itself as a “family company at work for a better world.” The fifth-generation manufacturer never had to. And yet SC Johnson’s tagline was introduced in 1999, relatively late in the game considering its 135-year legacy.
The question is: Why?
There is research evidence that “family” brands are seen as more authentic and thus engender greater trust with consumers, says Robert Nason, associate professor of Management at McGill University.
“A family influence is viewed as a humanizing factor to a potentially otherwise impersonal corporation,” Nason says. “Many family firms are likely to leverage this to their advantage, especially in consumer-driven industries.”
When James Richardson & Sons Ltd. acquired Bison Transport Inc. earlier this year, the diversified Winnipeg-based group was remarkably warm and fuzzy in its news release.
“We have been a long-time admirer of Bison Transport and we are very thankful to the Jessiman family for entrusting the future ownership of Bison to our family.”
Remarkable words from a 164-year-old family-held corporation involved in global agriculture, food processing, energy exploration and financial services.
A family influence is viewed as a humanizing factor
“We believe that being a family-owned company buying another family-owned company immediately conveyed stability, commitment, and a sense of comfort to all stakeholders, most importantly to Bison employees who were able to recognize and embrace the familiar set of standards and values of their company’s new owners,” says James Richardson & Sons President, Hartley Richardson.
Family Brand Power
Family-owned enterprises are unsung in modern economies. Yet they’re far from insignificant. Many underline an intriguing fact that studies have long shown: family-owned companies tend to do well in tough times.
Benny & Co., Quebec’s largest family-owned rotisserie chain, is proud of the progress it has made since it set up shop 61 years ago. Today it employs more than 1,800 workers, 36 of whom are family members.
“The fact that we’re a family business and have been in existence since 1960 is a sign of authenticity for our customers,” says Jean Benny, President and CEO. “During the pandemic, people have increasingly recognized the importance of buying local, whether it’s Canadian or Quebec products, and we can offer them exactly that.”
The notion of family-ownership resonates outside and inside an enterprise. It has an impact on the way the company is managed, says Stéphane Lettre, Strategic Marketing Director for second-generation Stelpro, which manufactures electric heating products out of Saint-Bruno-de-Montarville, Que.
“Our president often says he tries to conduct business en bon père de famille (like a good father) and that approach also influences the relationship with the staff,” Lettre says.
“It’s the pride of having built the company, not just for our president and his family, but for all the employees it means something to work with the founding family as opposed to someone who has no relation to the history of the company.”
Community Minded
The “family business” tag is akin to a community-minded company. It represents a kinder face of capitalism, say experts in the field. Leveraging a family brand makes sense, especially these days.
Lettre says the “family” aspect of Stelpro influences its ties with the community and the charities and causes it supports. “It’s a decision from the heart, not sales, marketing or finance.”
Is it too good to be true? The advantage gained from being seen as “family-owned” may be somewhat context specific, warns Nason. In some hypercompetitive or business-to-business contexts, family may be perceived by some clients or stakeholders as less advantageous, even detrimental.
“Some family-controlled firms actively hide the fact that they are family-owned in certain industries,” Nason says.
Not so for Montreal-based Rolf C. Hagen Inc., a second-generation manufacturer of pet care products, pet foods and treats.
“We think it’s important to mention that Hagen is a multigenerational family business because it is part of our identity,” says company spokesperson Audrey Livernois. “We have a founder who respected his customers, his employees and his suppliers, building trust and always doing things the right way.”
Some 66 years later, with Rolf Hagen Jr. at the helm with his brothers Tom and Mark Hagen, Rolf C. Hagen Inc. operates in North America, Europe and Asia. Indeed, its strategy of actively promoting the business as a “family business” has worked. Says Livernois: “We strive to honour that heritage in all that we do.”
For many family enterprises, it is a strategy that works.