Feel free to install and activate LuxTrust Mobile on your smartphone and/or activate the LuxTrust Scan device provided by your adviser.
Banque de Luxembourg has been providing family businesses with support and advice for many years. It regularly commissions and publishes works that enhance its expertise in this area, helping clients in their thinking and decision-making processes. Today the Bank turns to an anthropologist for his analysis of the characteristics that distinguish family entrepreneurs: Abdu Gnaba, who has recently published a new book, "The Explorer and the Strategy" (L'explorateur et le stratège). Abdu Gnaba believes that a family entrepreneur can only succeed with strong support and well-developed social connections. In transforming the enterprise into a 'family business', it is wise to broaden the concept of 'family'. Order your copy now.
No matter how daring, creative and visionary they are, family entrepreneurs need to know how to inject young blood into their business and weave strong social connections around them. Abdu Gnaba sees this as the secret to a successful venture which will live on after their lifetime.
The doctor of anthropology and comparative sociology was invited to speak at a recent conference organised by Banque de Luxembourg on the theme of openness in family businesses. His analysis is based on in-depth study of the culture of family entrepreneurship, described in his new book, "The Explorer and the Strategy: The Everlasting Journey of the Family Entrepreneur" (L'explorateur et le stratège-Le voyage éternel des entrepreneurs familiaux).
Passing the torch
"Entrepreneurs are explorers with a mission to change the world and, on a deeper level, change themselves. But they are very aware that they cannot do it alone," says the anthropologist. Strong connections with their successors are needed for a successful handover, and the process of forging these links is a gradual and delicate one. "Passing the torch represents the most important phase in the life of a company," says Gnaba.
It is better to carry out the transition gradually than to protect children from responsibility for too long, and then present them with a fait accompli. "Succession should be a continuous, dynamic process," he continues.
But a business is a social entity and it cannot limit itself to just the family. It needs new blood and new resources, whether that means financial resources to reach the next milestone or human resources to enrich the company's skills. "No one succeeds in isolation. It takes the ability to unite different individuals around a common goal. Family logic is never completely in line with business logic, and if the required skills cannot be found within the family, it is better to look elsewhere," says Gnaba. In his opinion, family entrepreneurs pay just as much attention to the people who work for them as they do to family members. The 'family' aspect of the business seems to lead to a closer relationship between employers and their staff, so that the personnel end up almost being part of the family.
The anthropologist illustrates his point by quoting various entrepreneurs he has met. "We have always made a point of bringing in new blood," says one. Another claims, "We welcome diversity because we are afraid of stagnating in our own thought patterns." According to a third, "Banks who only employ family members stay small. They think in a stereotypical way and never question anything. New blood makes you take stock."
Nevertheless, selectiveness is required within the necessary openness, if the family entrepreneur wants to retain the possibility of forming a 'family business' where rights are both earned and inherited in equal measure. "A graft is a good idea if it gives rise to new growth that stays with the company's existing character. It is not desirable if it leads to a loss of identity," concludes the anthropologist.
Paperjam.lu has dedicated an article to Abdu Gnaba's work.
Find our more about our services for businesses.