At the heart of family business success is a governance process that evolves and adapts to the changing dynamics of the family, the ownership group and the management team as these groups themselves evolve. As a family business moves from the founder stage where the business is often very “owner centric” to stages where the family and ownership group are more diverse, establishing a well- functioning board of directors is one critical step.
Today’s corporate world is being shaped by a near constant onslaught of unpredictable events. In such turbulent times the traditional corporate governance model risks becoming outdated and ineffective. Boards must perform a complex balancing act, safeguarding their core business, discharging their social responsibilities and developing innovative new propositions. They face unprecedented levels of scrutiny from regulators, activist investors, employees, commentators, politicians, and – most importantly of all – customers.
Every successful company, whether it knows it or not, owes its success to its business model. I explained this in an article that was published in Harvard Business Review in 2008, before any of those companies began, and, now, 10 years later, that still holds true, as more and more of the business discourse is focused on digital transformation. A digital platform, or a digital solution, may enable a new epoch of transformative growth, but when you get under a company’s hood and look to see what’s really driving it, the engine of transformation turns out to be its business model.