This past week I attended the 14th Annual Conference for Family Businesses hosted by the University of Witten/Herdecke on February 10th and 11th. Approximately 250 people were present representing some of the most powerful family businesses in the German speaking world. Not only was I able to attend, but I had the privilege to facilitate a dialogue session that included all conference participants.
Family businesses form the backbone of the German economy. The top 500 owned family businesses employ 4.5 Million people in Germany and have a total sales volume of 900 billion Euros. These family companies have done considerably better than publicly traded companies. During the period of 2006 to 2010, they increased employment by 11% while the DAX publicly traded companies only added 2%.
Family-owned businesses answer to a different rhythym than publicly traded companies. They are often not under the pressure to produce quarterly results, but can take a longer term perspective. They also tend to pay more attention to issues such as values and organizational culture.
Some of these family-owned businesses have been around for a long time. In 1668 Friederich Jacob Merck began a pharmacy in the city of Darmstadt. These were the beginnings of what is now a multibillion Euro pharmaceutical company – Merck KGaA – the oldest pharmaceutical company in the world. It is still owned by the family. The US company with the name Merck, Sharpe and Dohme – one of the largest pharmaceutical companies in the world – was once the US subsidiary of Merck KGaA but became an independent entity during World War I.
The dialogue I facilitated included all 250 participants at the conference. It brought participants in conversation around the key questions surrounding the theme of the conference – “Growth”. What does it mean to grow sustainably? How do you know when growth represents a danger to the company? Can growth affect the nature of the family business? How does the family need to grow to keep up with the growth of the business? What internal organizational growth is necessary in order to take advantage of new markets? Where does personal growth fit in this overall picture?
To prepare for this dialogue, I had interviews with Professor Dr. Rudolf Wimmer who gave the initial keynote address as well as interviews with several CEOs running family businesses – including Jon Baumhauer, the current CEO of Merck KGaA. The dialogue ran for three hours and was rated one of the highlights of the conference.
“Without continual growth and progress, such words as improvement,
achievement, and success have no meaning.”