Family and business. These two words describe Italy’s economy and still apply today, even in this season in which new rules of international competition are at play, calling for radical transformations in production, organisation and management. Of the 7,000 Italian firms earning over 50 million in total revenues, 4,000 are family owned, and the families of the founders control a great many of the 4,600 medium to large-scale manufacturers surveyed each year by Mediobanca and Unioncamere, which represent the core of Italy’s production system. These “pocket-sized” multinationals, those that innovate the most, exporting and investing abroad, have made Italy the second largest European manufacturer behind Germany and are the heart of Italy’s “fourth capitalism” (after the first industrial revolution, the second capitalism of the publicly owned corporations such as IRI and Eni, and third represented by the multitude of “small but beautiful” businesses which, fortunately, evolved into manufacturing districts and value chains).
The challenge faced by these family-run businesses now is that of change, while bringing together in original ways the ownership of the founders’ heirs (with many businesses being in the hands of the third generation) and management by outsiders, control through shareholdings and openness to new shareholders (listing on the stock market or investment by corporate banks and investment funds to finance growth), keeping ties with the company’s hometown (with roots to an organization’s local community being particularly strong in northern Italy and in many parts of central Italy) and international expansion, continuity in values and changing in response to the input from new cultures. These are complex issues that call for a new, flexible culture of enterprise centred around a link between past and future and based on an open, mobile identity that is able to take on the necessary contamination from the outside without losing site of the original values.
And how can this be achieved? This was discussed at length in September during a conference of the Aspen Institute Italia dedicated to the topic of “family businesses for responsible development”, which was held at the Vicenza headquarters of Zambon, an innovative multinational pharmaceuticals firm (featuring high-tech excellence in an elegant workplace designed by Michele De Lucchi) lead by Elena Zambon, the granddaughter of the company’s founder, Gaetano Zambon, and who is a keen believer in one of the organisation’s founding principles of both operations and social responsibility: “An economically free (capitalist) society can be morally acceptable only if individual wealth becomes collective wellbeing through the creation of the means of production, facts, jobs and opportunity for others. Any honest businessman should act this way.”
In other words, family can be a source of business values and of business ethics that drive growth in a socially responsible direction. A “multiform capitalism”, according to the Aspen Institute, one that concretely demonstrates its particular approach to combating the crisis. Since 2008, family businesses have grown more rapidly than other businesses, in terms of both revenues and workforce, thereby proving to be vibrant and able to adapt when needed.
And for the future? The basic idea is that of an open approach – open to partnerships with other firms (with original forms of value and supply chains, of consortia and other associations in order to make headway into international markets where size is key), to creating a new form of governance that selects and rewards managers based on merit, all the way up to the CEO, rather than on ties to the family, and to new shareholders so as to have the resources needed to grow, through acquisitions, into more dynamic markets.
Of course, the road forward is not an easy one, as fraught as it is with implications that are not purely financial, but also psychological, affective and historical, made up of contrast and contradiction, but it is a road that must be followed, led by the best organisations that have already begun. To remain vibrant, Italy’s family-run capitalism must avoid the traps of pure familism and continue to show that the primary concern of the family is the development of the business.