The EY Family Business Award of Excellence recognises exceptional entrepreneurs who lead some of the world’s most successful, multigenerational family enterprises.
We are humbled yet proud to receive the EY Family Business Award of Excellence 2022, especially since past winners from Singapore include bigger and more established companies like Far East Organisation and Hong Leong Group.
It is never easy to start a business, and a family business just pushes the bar further. We are proud of where we have come and what we have achieved in a span of just over 30 years. Along the way, what holds everything together and propels us forward is FAMILY, not just the families of the immediate founding family, but the greater FAMILY we call the Agrocorpp Family.
According to Forbes, there is a growing body of evidence that indicates that family-owned operations outperform non-family owned ones in every sector across the globe over the long term and especially during times of recession. This finding has been reflected in Credit Suisse Research reports since 2006, as well as research conducted by McKinsey.
What gives family-owned organizations this unique edge? Researchers Danny Miller and Isabelle Le Breton-Miller studied various successful global family businesses and discovered that the best performers pursued what they referred to as the “the 4C advantage” that enabled them to compete effectively. These include continuity, community, connection and command.
1. Continuity
While most publicly traded companies invest with their quarterly earnings or next shareholders report in mind, family businesses invest in the long run. Founders and next-generation heirs aren’t thinking about the next month but rather the next three decades to ensure business continuity so that their organizations can support both their children and grandchildren.
While long-term capital preservation and value creation may be favoured when it comes to the overall strategy, successful family-run businesses don’t just sit on their assets. They aggressively pursue and leverage opportunities and strategically plan trajectory shifts to create higher value. This often explains why family- and founder-owned companies generate better financial metrics, exhibiting more significant growth and profitability than their non-family counterparts.
2. Community
Family businesses start as just that – family. Families naturally have a degree of unity that becomes an inherent part of the company. As the operation grows and other family members or external parties are brought into the fold, the sense of unity holds from it, a sense of community forms. This helps to develop a cohesive, collaborative workforce.
3. Connections
As family businesses often begin as local mom-and-pop establishments, the foundation of these organisations is built on more than just an exchange of goods or services. As business owners, the founders generally invest time and effort in forging connections and shared experiences with both their clients and suppliers. As their business grows, these strong relationships continue and help to foster loyalty.
4. Command
As family-owned companies are in command of their own operations, they are more agile, can make decisions rapidly and act by moving into markets relatively quickly. This offers them a considerable advantage over their non-family peers when it comes to taking advantage of opportunities that arise.
A proposed 5th C is that “Conservativeness”. This is because founders and family owners with long-term views tend to be cautious about spending and more mindful of the returns when doing so. For example, some research shows that family-owned organisations generally have lower research and development budgets than other businesses, both public and private. This, however, doesn’t mean that they are less innovative. The study shows that they are more innovative in their processes and gain higher innovative outputs. The researchers suggest the reason for this is that family owners ensure that their staff only make sound investments as part of the broader business strategy.
We are thankful for being awarded the EY Family Business Award of Excellence 2022 and will continue to build upon our 5Cs as we overcome more challenges ahead to scale greater heights with the family and the greater Agrocorp Family.