Innovation is to businesses what location is to real estate. However, it is an ingredient that sometimes seems harder to find in family businesses.
Paul Wilcox from Wilcox Limousines says complacency is just one of a number of possible reasons.
This can be illustrated by the tendency of an entrepreneur bringing his children on board (often into leadership positions) when they finish their studies. While “learning on the job” has its merits, a 22 year old fresh from university will probably have missed out on exposure to different ways of doing things and fresh knowledge is paramount to an innovative mind-set.
On the other generational side, it is common for a founder to feel that if a certain business model has been successful for 10 or 20 years, it doesn’t need to be reviewed or adjusted. A family business often perceives its strength lies in its tradition and heritage, thus making it resistant to change. The omnipresent disruption of the last decade however, teaches us that it is not a wise assumption.
A family business can have very strong values, an excellent product and recognised credibility from its customers, but becoming obsolete is one of the biggest and most characteristic perils it faces.
The key to lasting success, beyond of course, a simply brilliant product, is innovation. Too often family-owned businesses – and businesses in general – become inward looking and complacent.