Bluerating | April 2022

Family businesses are a distinctive feature of our Country. In most cases, they are small or very small businesses that occupy niche sectors of the market, where the distinctiveness of the funder and of their few followers are at once a strength and a drawback.

The presence of six million Italian micro enterprises testifies to our atavistic dislike for aggregations: “small is beautiful”, “better alone than in bad company”, “in my home I do what I want”, “a business thrives when the owner keeps his/her eyes on it”, “I don’t have to answer to anyone but to myself”.

This is what owners of small and medium-sized enterprises tend to claim with increasing frequency. Their businesses, however, are often and unconsciously crushed by the deadly embrace of their owners, unable to let them grow and evolve.

But there are a few exceptions: companies funded by enlightened entrepreneurs which have later become successful multinational corporations, such as Ferrero and Luxottica.

These are two very different companies that, however, share a family DNA. In fact, while the Ferrero family has always refused the hypothesis of stock exchange listing, Luxottica made of the stock exchange their springboard.

Within the world of banks and financial advisors, there are some excellent “family driven” instances.

There are three main ones: Banca Mediolanum, funded by Ennio Doris, listed on the stock exchange, and guided by the Doris family (40,38%) as well as by their historical shareholder Fininvest (30,11%); Gruppo Credem, listed on the stock exchange with 36,47% in the hands of the Maramotti family; Gruppo Sella, not listed on the stock exchange and owned by the family of the same name since 1886. 

The characteristic that brings together these three instances, very different for history, strategy and positioning on the market, consists in the presence of a stable shareholding that guarantees to the management and their companies a medium-long term perspective, moving beyond the three-month period.

Being a family-driven company does not exempt from allowing the best talents to grow within the company or from selecting skillful top managers from the outside. Actually, the value and quality of the management of family-driven companies are increasingly relevant as key factors, as compared to publicly traded companies.

The pact between “ownership” and management in a family-driven company is funded on the same medium-long term logic which drives business strategies: the average age of the top management of family-driven companies is much higher than the average age of the managers of publicly traded companies.

On the other hand, top managers who change company every three-four years and with their pockets full, often leave behind them steaming ruins or, at best, someone with a lit match in their hand.

However, publicly traded companies – as long as they are guided by skillful managers – tend to be more successful, mostly because they do not need to go through the trauma of the generational shift which only too often destroys family businesses.

In fact, some of the strengths of family-driven banks – such as the level of loyalty of the management and the prevalence of a long-term logic over a short-term logic – are also common among in of the most successful publicly traded companies.

Nicola Ronchetti