Growth Acceleration Strategies for Family Businesses: Steering on a Crowded and Slippery Track

By Ali Borhani: The story begins with two friends who went trekking and hiking in British Columbia in Canada. One night and after a long walk, they camped by a beautiful river that had a nice BBQ, watched the stars by the fire and went to sleep. In the morning when they were freshening up and washing their faces, one of them saw a very big and rather aggressive grizzly bear approaching them. While he was screaming and shouting with fear, anticipating the worst, his friend calmly went to the tent, bringing out his boots and lacing them up. The frozen and scared friend was watching the bear with one eye, and with the other observing his friend in bewilderment. He shouted, “Are you out of your mind, the bear is coming and you are lacing up?” to which his friend responded, “ The reality is that the bear will shortly chase both of us as he seems hungry, and we have to run away. I am making sure I do stay ahead of you.” The moral of the story is that the competition is a basic instinct and family businesses are well-advised to “lace up” and develop their growth strategies now…

In which camp have you set up your tent? Are you in the valleys of preservation or on the high-hills of growth? These are two completely different locations to find yourself in. From a growth camp one has a bird’s eye view over all the changes in the geo-economical landscape and will see the grizzlies of competition a long time before they arrive.

Many family businesses particularly those in the first and second generation, happen to be in their comfort zones, which we may call here “preservation valleys”. The fact that succession planning may not have yet been laid out, let alone implemented, puts these families at danger of not being able to react quickly when danger is imminent. For families at this stage, there is often very little incentive to rock the boat among family businesses. Taking calculated risks, and being responsible for such ambitions is not the first priority. Most of the family businesses in Middle East remain in their safe harbours and are yet to venture into new markets. But ships were not built to stay in one harbour; however, growing the business is associated with taking calculated risks and leaving the comfort zone.

These risks might be well worth taking: What Ikea, Lego, Hermes, Bombardier and JC Decaux all family businesses, would have become, had they stayed in their own markets and regions can only be imagined.

Our research at Incubeemea shows that strategic alliances shaped between Middle Eastern and international businesses are numerous. Family businesses have been typically approached by multi-nationals and companies rather than tapping into new geographies, markets and fostering partnerships through their own initiatives. This might be explained by the fact that family businesses often lack awareness of their role in lobbying and promoting the company in new markets.

To tackle this conundrum the following questions can be very helpful:

• Can we as a Family Business, guarantee our existing position without developing growth strategies?
• Is our future growth regionally driven or must we tap into new markets?
• Have we identified these markets and developed the roadmap and necessary strategies?
• Did we take into account the advice of trust worthy external experts?
• Who is driving this vital growth function within our family?

Generic consulting firms treat growth mostly by prescribing Score Cards, in spite of the fact that the development of a growth strategy is in reality a byproduct of a real understanding of what makes the family “tick”.

Strategic advisors can be tremendously helpful. They can foster trust, clearly identify competitive advantages and further enhance it to match the ambitions of the family business. This is crucial to formulating a coherent alignment and program in line with the DNA of the family business and its future growth scenarios.

The ideal role of trusted advisors is to define themselves as Corporate/Family Business personal trainers, challenging the organisation to engage the growth muscle. Lack of engaging this vital element can eventually lead to strategic atrophy.

The growth formula is not an “Over The Counter Remedy”. It is more related to shaping a customised strategy for the family business. One that they buy into not because they pay the firm/advisor but because they are convinced and have taken on this journey with an open mind, allowing advisors to work with them as their “Strategy Provocateurs.”

The Middle East is strategically shifting eastwards when it comes to business alliances and strategic outlook, yet is still looking westwards for guidance. This transition can be very perplexing for family businesses in the region, very much like the camper who froze at the sight of the grizzly. Family businesses ought to accelerate their growth and that can only happen with well-organised succession planning and strategy development creating internal and external alignment and coherence.

To formulate successful “Go to Market Strategies” within and beyond the Middle East, family businesses can benefit from engineering a Growth Acceleration Program taking the following recommendations into account:

• Development of a clear division responsible for growth acceleration within the family business
• Support the initiative by the Board of Directors and necessary governance.
• Map out the industry, geographical and sectorial matrix where the family business can punch above its weight.
• Identify and short list the family businesses in overseas markets that share the same values, but bring in complimentary expertise.
• Prioritise the shortlist of partnership options per region/country/industry from this list.
• Allocate necessary human and financial capital, with clear timelines to execute.
• Consider the support of a trusted advisory firm for such a journey.

At the end it’s all about a harmonious growth, creating socio-economic prosperity, jobs, building a brand equity for the family business that continues to resonate for decades to come within the region & beyond.

Have you laced up and are you ready to run?

By Ali Borhani
Founder & Chief Welding Officer
Incubeemea

About Incubeemea
Incubeemea is a MEA-focused strategic advisory firm helping family businesses, private companies, regional and international groups. Formulating tailor-made solutions that foster impactful and sustainable growth, and true regional coherence

Source: Tharawat Magazine

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