Customer Reviews

Managing For The Long Run: Lessons In Competitive Advantage From Great Family Businesses

5 star:		(5)
4 star:		(0)
3 star:		(0)
2 star:		(0)
1 star:		(0)

 

 

This book is amazing. I know of no other book in the management literature as cogent, as provocative or as compelling as this one. No wonder family businesses outperform their publicly-held counterparts. This book challenges not only our prejudices about family businesses, but also they way we manage our own. It shows clearly why these companies have succeeded and grown over decades to become the powerhouses they are now - their competitive advantages are sustainable.

The book defies what we think of as best management practices for public companies. It reminds me of Collins's "Built to Last" and Level 5 leaders. The underlying research is THAT good.

For me, the centerpiece of it all is an elegant matrix that describes how these companies have been able to deliver on 5 core strategies through the advantages long tenure, patient capital, etc. No quick accounting fixes here. Locate your own company within this matrix and the companies they studied will offer new guidance as you make your biggest bets and make your toughest decisions.

I was dumbfounded at how short-sighted and small-minded I had become as a manager. It's not a quick read, but read it. And you will never think in quite the same way about your strategy, your core competencies, your markets, or the way you leverage/steward your current resources.

This book is both sophisticated and practical. My hat is off to Miller and Breton-Miller.

Modernisation theorists and chandlerian followers have developed plausible arguments that there are too many weaknesses in family-controlled businesses such as nepotism, small-scale, and short-lived.

Danny Miller & Isabella Le-Breton Miller capture mounting primary and secondary data from 58 family-controlled companies in the US and suggest that family-controlled companies can be as marvellous as their nonfamily-controlled peers. This book provides a rich source of useful insights to business excutives in having a novel understanding family-controlled companies.

According to the International Family Enterprise Research Academy, family-controlled companies dominate every aspect of economic life in the world but the study of family-controlled companies has received scant attention in proportion to the significance of their contribution to the economic growth in the US. This book is a classic in family business research and I highly recommend it to all business executives and researchers.

This is a great book! It is well grounded in excellent case study research and good theory. The authors bring to life some important and profound wisdom about the sources of advantage that family firms have and what makes them successful. Well written, the book is easily accessible to scholars, public policy makers and the public at large. I am impressed by the depth of the research in the book and the time frame it covers. The diversity of companies examined in the book helps to illustrate how effective management can make a significant difference in the ways family firms surpass their rivals in their performance. This is a "must read" book!


Shaker A. Zahra
Paul T. Babson Chair of Entrepreneurship

In several recent reviews, I have quoted remarks by Jack Welch when explaining why he admires small businesses: "For one, they communicate better. Without the din and prattle of bureaucracy, people listen as well as talk; and since there are fewer of them they generally know and understand each other. Second, small companies move faster. They know the penalties for hesitation in the marketplace. Third, in small companies, with fewer layers and less camouflage, the leaders show up very clearly on the screen. Their performance and its impact are clear to everyone. And, finally, smaller companies waste less. They spend less time in endless reviews and approvals and politics and paper drills. They have fewer people; therefore they can only do the important things. Their people are free to direct their energy and attention toward the marketplace rather than fighting bureaucracy."

In his E-Myth Mastery, Michael Gerber cites the following statistics: "Of the 1 million U.S. small businesses started this year [2005], more than 80% of them will be out of business within 5 years and 96% will have closed their doors before their 10th birthday." Everything Welch says is true in terms of the potential advantages which small businesses have and the statistics which Gerber cites suggests that very few of them know how to achieve and then sustain those advantages.

I include these quotations now because they are directly relevant to what Miller and Le Breton-Miller offer in their own book, Managing for the Long Run. For owners and other decision-makers now involved with family businesses, they explain HOW to achieve and then sustain a competitive advantage. True, various "lessons" were revealed by the authors' rigorous and extensive research on a number of family-controlled businesses (FCB) which have become major corporations, notably Cargill, Hallmark Cards, L.L. Bean, Motorola, and Wal-Mart.

It is important to remember, however, that all of them had modest origins and during that perilous period encountered most (if not all) of the same challenges which FCB start-ups now face. Most of the most valuable business books were written to answer critically important questions. In this instance: What distinguishes great family businesses? (Please see Chapter 1.) A related question: What are the "potent priorities" of great family-controlled businesses? (Please see Chapter 2.) Another related question: Why do so many family-controlled businesses stumble? (Please see Chapter 8.) In between Chapters 2 and 8, Miller and Le Breton-Miller focus on five primary characteristics: brand building, craftsmanship, operations, innovation, and deal making. They devote a separate chapter to each. I prefer not to list their key points which are best revealed within the narrative's frame-of-reference and sequential context. However, I now express my appreciation of various Tables and Grids which so efficiently illustrate the cohesion, indeed interdependence of what the authors characterize as "The Four Cs": Command, Continuity, Community, and Connections.

All of the specific mental and business models, strategies, tactics, values, and applications which Miller and Le Breton-Miller recommend are based on their conviction that "the only way to sustain good performance is to [begin italics] act in the best interests of the company and all its stakeholders. [end italics] First, boards and top managers must be motivated to be courageous and farsighted stewards. Second, they need to concentrate on and invest deeply in a substantive, enduring mission. Third, they must assemble a unified, value-driven staff that uses its initiative for the interests of the whole firm. Finally, they must form enduring, win-win relationships with external partners."

Those who share my high regard for this book are urged to check out Gerber's most recent E-Myth book. Also Gary Harpst's Six Disciplines for Excellence, Steven S. Little's The 7 Irrefutable Rules of Small Business Success, and Jason Jennings' Think Big, Act Small.

Miller and Le Breton-Miller present a well-researched and well-written study focused on 4 themes in family-run firms: command, continuity, community, and connection. These themes translate into management principles that can and should be used by public companies and other organizations as well. Their (sometimes counter-intuitive) findings show companies such as Cargill, L.L. Bean, The New York Times, IKEA and others manage to survive and thrive. An insightful and interesting book.