EIASM Keynote on Deconstructing Boundaries

Some colleagues asked me to share the slides of the keynote I gave yesterday at the 11th EIASM workshop on family firms. Here they are: 2015-EIASM-Keynote-forshare

Application of Porac's work on cognitive communities to the family firm research field
Application of Porac’s work on cognitive communities to the family firm research field

In a nutshell, I made the following points:

  • We should more often apply our own theories (e.g., organizational identity theory, entrepreneurship theory, theory on the cognitive microfoundations of strategy, or theory on organizational ambidexterity) to our own research field – that will help us to better understand what we do, what our “competitive advantage” is and what we might do in future.
  • Boundaries of who we think we are as researchers can substantially limit our contribution and should thus be brought into question frequently.
  • Boundaries of who we think we are also limit how we teach our subject (thanks to the audience for bringing up this point!)
  • Tacit knowledge about “what is possible” is often useful but also holds the danger to really make progress.
  • In particular, the boundaries pushing us to “mono-theoretical studies” limit our understanding of family firms and their value creation (to further read about this topic, see our JFBS article: Link)

Transeo Academic Award 2015

Our qualitative study on the trusted advisor’s role adjustment during the succession process and the advisor’s affect on his or her clients’ emotions has been voted as “best presented paper” at the Transeo General Assembly in Liège, Belgium.

 

Transeo award
Transeo award
Gala Dinner
Gala Dinner

The paper is part of Alexandra Michel’s PhD thesis. Based on interviews and archival material on 5 recent succession phases, we find that

  • The advisor changes his or her role during the succession process from that of a “psychologist” to a “project planner”, then a “doer”, and ultimately a “coach”.
  • Only when the advisor fully changes his or her role (and isn’t stuck, for instance, in the role of a “doer”), also incumbent and successor can adjust their own roles (something that, as Wendy Handler told us 21 years ago, is very important for the outcome of the succession process!). In other words, satisfaction of incumbent and successor is only high in the end, if role adjustment fully took place.
  • Negative emotions cannot and should not be fully avoided throughout the succession process. Indeed the advisor needs to trigger phases of negative emotions and dissatisfaction in order to advance the process. It is, however, also in the responsibility of the trusted advisor to help the clients overcome this negative emotions.

In case your interested in the presentation or the full paper, let me know via email [nadine.kammerlander AT unisg.ch] or via the contact formula.

Latsis Award

Very happy to have received the Latsis Research Award last week. The “Fondation Latsis International” gives research awards to an (untenured) scholar at four selected Swiss universities each year. The first award ceremony took place during the Dies Academicus last week, the second ceremony will be held in Geneva in autumn this year. As a nice side note, the Latsis foundation actually belongs to a family business, founded in 1938 by the Greek Captain John S Latsis. Today, the Latsis Group is diversified with activities, for instance, in banking, shipping, real estate, engineering, and energy.

Latsis Award
Latsis Award

Doing more with less: Innovation input and output of family firms ( Summary of our AMJ in press article)

Here’s what our meta-analysis* shows:

You ever wondered whether family firms are more or less innovative?

Well, both views hold some merit. First, yes, family firms invest indeed less into innovation. But why are they so stingy? Agreeing with some other researchers, we claim this has several reasons: First, family firms prefer less uncertain or “risky” investments such as increasing production capacity. Just imagine, all your wealth is concentrated into one asset (this is what many family owners’ portfolio actually looks like): Would you like the idea of investing in risky projects? Probably not. Second, innovation is really expensive. Often, industry average is that firms invest more than 10% of revenues into R&D. That’s a lot. And the money needs to come from somewhere, for instance, from banks or the stock market. But both options, bank loans and equity shares, would reduce the family’s control over the firm – something that family owners dislike a lot.

The story could end here… And too often, researchers and practitioners alike have stopped with the claim that family firms are less innovative. But wait: What about the innovation process? Isn’t it the outcome of the innovation process that actually counts? Indeed, we argue and show that family firms have a greater conversion rate than non-family firms. As a consequence, they even have greater innovation output – despite lower input.

Continue reading

Why family firms do or do not use controlling tools

You ever wondered whether family firms differ in their use of controlling tools? And how and why? Mateja Andric, one of our excellent bachelor students, found some answers to those questions.

In her work, she surveyed 101 Swiss family SMEs on their firm characteristics, goals, and their use of controlling tools. Using a mediation-analysis, she finds that:

  • Less than 20% of the surveyed firms actually have employees dedicated to planning and controlling.
  • In those cases that have staff dedicated to planning and controlling, on average 1.25 employees work on this topic.
  • Planning and controlling is seen as matter for the boss, as also the graphic shows: In most cases, the CEO or advisory board takes care of planning and controlling tasks.
  • The more the family influences the company (in terms of voting rights and family members in management positions), the less the firm uses strategic planning and controlling because of (a) lack of controlling knowledge and (b) lack of general appreciation of controlling.
  • The more the family influences the company, the less the firm uses operative planning and controlling because of (a) an increased focus on non-financial goals and (b) a focus on informal instead of formal structures.

 

Controlling responsibilities (from Andric, 2015)
Controlling responsibilities (from Andric, 2015)
Model of controlling in family firms (Andric, 2015)
Model of controlling in family firms (Andric, 2015)