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What You Can Learn from Family-Owned Firms

A 2015 study highlighted by Forbes and conducted by the Center for Family Business at the University of St. Gallen brought attention to the role of family-owned companies in supporting the global economy. The study confirms that largest 500 family-owned firms collectively make $6.5 trillion in yearly sales — and, together, are large enough to constitute the third-largest economy after the United States and China.

Family-owned firms, which constitute 80-90% of companies worldwide, face unique difficulties that don’t impact other businesses. Peter Englisch, who leads Ernst & Young’s Global Family Business Center of Excellence told Forbes that, “With a family business the challenge is to combine the most rational world of business with the most emotional world of family.” The trials and tensions that accompany a family business come hand-in-hand with the potential for a more positive workplace. The work conducted at University of St. Gallen found that “these companies seem to be especially good at fostering employee commitment and engagement.”

It’s possible that the personal and emotional connections that root family businesses also drive loyalty and a sense of meaning among employees. This connection is certainly the case at Barry-Wehmiller Companies. Bob Chapman, the leader of Barry-Wehmiller credits what he calls a “truly human leadership” with the success of his firm.

51WkLkBePKL._SX329_BO1,204,203,200_The New York Times describes Chapman’s track record as follows: “Over the last 40 years, Mr. Chapman has taken a small, failing tool-and-die business founded by his father and built it into a company with an annual revenue of $2 billion. Along the way, Barry-Wehmiller has achieved a 15 percent compounded rate of return to investors.” Despite his high numbers, Chapman holds himself and his company accountable to a very different metric: “We measure success by the way we touch the lives of people.”

In his new book, Everyone Matters: The Extraordinary Power of Caring for Your People Like Family, which he wrote with Raj Sisodia, Chapman dives into this family approach to running a business. His team strives to send employees home “safe, healthy and fulfilled,” while valuing mutual trust above all else. This family oriented model guided Chapman through tough decisions in the 2008 recession: “We asked ourselves, ‘What would a caring family do in this situation?’ Rather than layoffs, we started offering furloughs. People could take them whenever they wanted to, and some took them to help ensure that needier colleagues wouldn’t have to do so. We didn’t have to lay off anyone.” Bob Chapman’s approach to leadership underpins the success of his company and gives voice to the lessons positive impact of a family-oriented perspective.