Proposal for Research on Family Businesses That Survive and Thrive in High Risk Environments

In order to explore whether Resilient Family Businesses share any similar characteristics, we have compiled a dataset of over 150 family companies across nearly 50 countries. We’ve observed five distinct adaptive strategies that these companies consistently deploy in response to adverse operating environments: Substitution, Craftsmanship, Extension, Partnership, and Patronage. Some systems have utilized one of these strategies, others switch among them as circumstances evolve, and still others apply several of them simultaneously across a variety of portfolio companies. That said, all of the companies we observed in our dataset took advantage of these five fundamental building blocks, and each new company we added to our dataset only reinforced this emerging theory. Each strategy poses different opportunities and challenges for owning families and the way they organize and leverage their governance arrangements. These strategies, we suspect, may also affect how families approach continuity and succession.