One big happy family

Dr Linda Glassop knows that business doesn’t always trust academia, and that academia doesn’t always trust business.

Happily, she also knows what to do about it.

“I have a lengthy industry career and that relationship is very important to me now that I am working at Deakin,” Dr Glassop says.

“It keeps me in touch with the reality of the business world and also with how academe can help business.

“And that’s important information to have because a lot of people in business don’t believe that academics live in the real world, and a lot of academics don’t necessarily know what’s important to business.

“The reality is that when you bridge the gap, there are many ways in which the research we do is useful for business.

“It’s not just about gathering data, but gathering important tools for businesses to improve the way they operate.”

Growing proof of this is the collaboration Deakin has with Family Business Australia and KPMG.

“As part of my research, I decided to take an interest in family businesses in Australia,” Dr Glassop said.

“They are extremely important to the Australian economy, far more important than a lot of people realise.

“A lot of people don’t realise just how many of our big companies are still family businesses.

“We have names like Darrel Lea Chocolates, Coopers Breweries, Linfox and Costas in Geelong with their wonderful connection to Deakin. Many family businesses have an annual turnover of more than $5 million and some of these top the billion!

“About 70 per cent of Australian businesses are family businesses. They are the norm not the exception!

“So four years ago we approached Family Business Australia to see if they were interested in being part of our survey, and they approached KPMG, their major sponsor, and we have ended up with what is a real collaboration with real outcomes.”

Dr Glassop says family businesses have a number of clear, distinguishing characteristics:
- They are more informally run.
- Family members are often prepared to forego income and work long hours to see the business prosper.
- They are prepared to mortgage their homes in order to keep the enterprise going.
- They have a lot of energy and passion.
- They tend to be far more involved in the community.
- Workers tend to feel like they are part of the family too, and are more loyal.

“These are the things that make family businesses special," Dr Glassop said.

“Of course there are also inevitable downsides, including transferring from one generation to the next.

“We see a huge drop off from the second generation to the third and there are a few reasons for that.

“Obviously when a family gets larger, this can create more opportunities for conflict.

“There’s also the issue of younger family members wanting to go off and do their own thing.

“It’s important that we know all these things, and then begin to put in place some of the strategies to help family businesses overcome these problems, because they are such an integral part of the social and economic fabric of Australia.

“It won’t be a long-term benefit to Australia if family businesses all end up being owned by the big end of town.

“I am sure the big end of town doesn’t necessarily see that as a bad thing, but do we really want to have everything owned by four or five big corporates?”

One method Dr Glassop has identified to help family business remain competitive and innovative is having independent board members.

“I think it is very important for a family business to have a formal governance structure in place if it wants to not just survive, but expand, "she said.

“We have found that bringing in objectivity increased the recognition of opportunities for growth – if a business has a board of directors with less than 50 per cent of family on it, it is more likely to grow.

“The issue for a lot of family businesses is finding the time to set up these more formal structures.

“Also, it costs money to bring in independent board members, but there is no doubt there is a real benefit from doing it.”

Dr Glassop hopes that that collaboration between Deakin, FBA and KPMG will continue into the future.

“The feedback we get is very positive, the survey was very much a talking point at FBA’s national conference in August,” she said.

“Family businesses tell us they find out a lot of information just by filling out the survey form. That increases when they get access to the whole report.

“For me it’s really satisfying work because I genuinely believe in what family businesses can contribute to Australia. In the main, they are efficient, they are passionate, and they are innovative.

“If at Deakin we can help more and more family businesses make the transition across generations, it will once again be a sign of our university working in partnerships with the community and making a positive difference.

“It’s one of the reasons I really enjoy working at Deakin. Our academics don’t live in ivory towers.

“They really do understand the relationship between industry and academe, and how each can help the other.”

Deakin University has a new Graduate Certificate of Management (family business) course starting next year.

See article at:
www.familiesinbusiness.net/default.asp?title=Inauguralonlinefamilybusinessdegreelaunched&page=article.display&article.id=13219

Course details at: www.deakin.edu.au/buslaw/management-marketing/family-business/index.php

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