Family business and Digitalization

Family business and digitalization

16.04.2021 - Italy

Innovation and digitalization: two terms that are usually associated with large scale high-tech companies and newly-founded startups. But, can these also be found in a family business?
In the framework of a series of lectures, organized by the Centre for Family Business Management and the Free University of Bolzano, our Managing Director, Evelyn Kirchmaier, spoke about the challenges that family businesses face in terms of digitalization and innovation. 

Short decision-making processes, long-term vision and family culture

Digitalization is one of the biggest challenges that all businesses, including family-run businesses, face. However, when it comes to family businesses, there are some key factors that can better support the implementation of new ideas. 

First of all, due to the nature of their organization, family businesses have faster decision-making processes. Family business owners usually invest heavily in their own company, which means that they tend to select only highly efficient ideas. Also, when it comes to R&D investment, they typically invest less and achieve better results. And this is something we keep seeing at Markas: once a decision is taken by the family, it will be immediately implemented in an efficient manner. 
Family business and Digitalization
Secondly, another key characteristic of family-owned businesses is thinking in the long term. On the one hand, this can lead to a more cautious approach towards innovation but on the other hand, thanks to the low number of decision makers involved, it can lead to revolutionary changes. 

At Markas, long-term business orientation is a key part of our approach and the foundation of our differentiation strategy. Our long-term vision has enabled us, for example, to invest in five different divisions: Clean and Food, the two main pillars of our services, as well as Housekeeping, Logistics and Facility, three newer divisions that we have been developing gradually. 

The third key factor is the way family firms do business; network-centric and focused on trust. The "family culture" allows for closer and long-term relationships, that are created over many years or decades, with partners, suppliers and clients. This can contribute to developing and implementing innovative ideas, products and processes and can help companies overcome potential barriers, leaving more room for a transparent and results-oriented information exchange for all parties.
Family business and Digitalization
Corporate Welfare, communication and continuity 

The reason why family firms are more efficient and innovative is their most important asset: their employees. It seems that employees can identify themselves more with family-run companies.

At Markas, the family concept is strongly present and despite the high number of employees, more than 9000 in total, we constantly pay attention to our staff. The philosophy behind this concept is very simple: the more satisfied people are, the more value they add.

Another factor that could boost innovation in family firms is the thoughtful way they communicate. The brand is a fundamental part of the success of a family business. Therefore, the brand image should perfectly communicate and respect the values that the company has created over the years. And a family that is willing to put its own name and reputation to it, with the right communication, can convey trust and credibility to all its stakeholders, partners and staff.
Family business and Digitalization
The last factor that can impact the innovation performance of family firms is the generational change. The younger generations are well aware of the need to act in order to keep up with the times. 

This is a very delicate matter that can determine a company's success or failure in the long run. 

The success of a family business revolves around a plan and a set of values that are passed on from generation to generation. 

Companies should stay true to these values even when major changes or new ideas need to be implemented.  
Family business and Digitalization
Generational change and digitalization at Markas

All these factors have been vital to the success and growth of Markas, which continues to this day. Despite the generational change, which occurred in 2011 and completely transformed our work processes, our values remain unchanged over time.

The digitalization of our business processes has played a key role in this success. Offering high quality services is our key competitive differentiating factor and thanks to the implementation of the right IT infrastructure as well as the use of supporting software across our offices and operational sites, we are able to communicate with all our employees and introduce standardized processes all over Italy but also internationally. While digital transformation is often seen as something negative that could potentially replace human labour, in our case it's exactly the opposite; it helps us shorten the distance and makes our employees feel part of one big family.