Mitzi Perdue

Family Businesses, a Unique Treasure to Their Communities

Olivier de Richoufftz from the Family Business Foundation knows something you probably don’t know about the Michelin Tire Company. This company contributes something of amazing and irreplaceable value to its community.Michelin has been located in the town of Clermont-Ferrand, France for close to 150 years. If only looking at how you can grow rapidly, you can be certain that Michelin headquarters would have relocated long ago.
That’s because Clermont-Ferrand, is in the French Massif central. It’s a mountainous, land-locked area.

Given that Michelin is a major international manufacturing company, leader in its market, it can be seen as an economic nonsense to be located in an area where a 747 couldn’t land and the least expensive transport, shipping, is out of the question.

If Michelin Tire were acting from a business-efficiency only point of view, it would now be located in Le Havre or Marseille or some other port city. However, de Richoufftz talks about the values that drives the Michelin philosophy, its social responsibility.

“The reason Michelin will not move,” explains de Richoufftz, “is that the economy of the city is highly dependent on the company.” He goes on to explain that as the major employer, a move by Michelin would devastate not only the town but possibly the region as well, leaving without jobs generation of workers having devoted sometimes their entire career to the manufacturer.

The Michelin family determined generations ago that they had a responsibility to their fellow citizens. The decided that they would never abandon the area that supports them.

A TIME FRAME UNIQUE TO FAMILY BUSINESSES

“Only a family minded business can do that,” points out de Richoufftz. “A public company has to worry about how the stockholders will react and how will look the next quarterly report.”
Likewise, for an elected official, the time-horizon is dictated by the next election.

In contrast, an entrepreneurial family has the ability to think in terms of generations and even centuries. It can make decisions while keeping in mind the long-term well-being of a whole inter-dependent eco-system.

As head of the Business Families Foundation, De Richoufftz has seen countless examples of this kind of long term thinking. He knows of a family-owned mining company that is leaving rich seams of ore untouched for the next 100 years. They want to make sure that the resources won’t have vanished by the time the great, great grandchildren are in the business.

LONG TERM SURVIVAL DEPENDS ON RENEWAL

In de Richoufftz’s view, the ability of family businesses to think long-term means a priceless contribution to community well-being. However, this only works if the family business survives.

What are his suggestions for making the family business last, given that the world is changing at an ever-more dizzying pace?

One of the crown jewels of the Business Families Foundation is their intra-preneurship program. It takes younger participants in a family business through a 14-week course that teaches them how to start a new business within the mother business.

“There’s a lot of value in our model,” points out de Richoufftz. “We have a mechanism for teaching businesses to reinvent themselves. At the same time, we’re giving the rising generations a way to contribute and gain experience.”

In the 2 years that they’ve been starting intra-preneurship as a pilot project in Canada, 15 new businesses have been started within an existing family business. For those families, the young members gain experience without having to displace the older members, who can still continue contributing.

But meanwhile, the family business is evolving and responding to changes in the world. It’s making use of “patient capital,” that can fund ideas with long term payoffs. The young people can benefit from the wisdom of their elders and yet they still get to experience the exhilaration and creativity of entrepreneurship.

Having members of the rising generation able to renew the family business gives it a greater chance of continuing. And that in turn makes possible the kind of long term thinking that de Richoufftz sees in the companies like Michelin,

If you’d like to know more about the Business Families Foundation, visit https://businessfamilies.org/en/. There’s an enormous wealth of advice and knowledge available to you free. To contact de Richoufftz, e-mail him at: olivier@businessfamilies.org.