What Can Entrepreneurs Learn From Women In Family Businesses?

The NextWomen Generations & Family Business Theme.

Mary Barrett is a specialist in women in management, with a focus on entrepreneurs and family business. Here she discusses the advantages held by women in family businesses, and what entrepreneurs can learn from them.

The rewards for women in the workforce are still unequal to those of men. At the top of professions women are both under-represented and underpaid, an inequality which extends throughout the workforce. In theory women must be paid equal wages for equal work, but statistics show they earn less than men: in the UK about 15% less and in Australia about 18% less, on average. The gap is even bigger at the top, with female CEOs in both the UK and Australia earning less than three-quarters of what their male counterparts do.

Most worrying of all is that the gender income gap has barely shifted in the last 30 years.

But what are things like for female business leaders in family businesses, which we can define as businesses mainly managed by members of a single, blood-related family?

We don’t know a lot about the salaries they pay; most family businesses don’t need to report data in the same way as large businesses. But we do know that family businesses feel different. This is not surprising: it has to feel different to work with people with whom you have breakfast and dinner, spend Sunday mornings in bed with, or to whom you have given birth. But in many ways family firms are also no different at all. Like other firms, their managers have to figure out how to ensure their survival in a competitive world, find good people to staff them, and brave the occasional global financial crisis. Many family business people say their business is ‘just like any other business, except…’, but ‘except’ refers to something that makes the family business a very different entity from a non-family business. These differences make family business women’s experiences different too, and they mean family business women have something to teach business women generally.

First the good news.

Being a woman in a family business is a great way of getting into the kinds of firms that women often never find a foothold in: firms in so-called male-dominated industries.

We hear a lot about the need for more women get into into mining firms; roofing, concreting, and general construction firms; heavy vehicle freight companies, agricultural concerns; car dealerships; and funeral businesses. Once they are there, they need to work to get male colleagues’ respect, and not have customers mistake them for the receptionist. Family business women know that being born into a family company means you can leap over most of these obstacles. (The receptionist problem still occasionally crops up, unfortunately.)  But growing up among roofing iron, used cars and agricultural machinery gives you a feel for those products, and often the same love for them that guys have. This gives you a head start in becoming a permanent and recognized business person in the industry.

A second item of good news is that family businesses are good at giving women the kind of flexibility they need to do what society still demands of women more than men: looking after children. 

In a family business the children are – or are hoped to be – the next generation of the firm, so family firms tend to be accommodating about offering decent maternity leave, holding your job open for when you get back, and keeping you in touch with the business while you’re away.

But family business women would say: Just be careful that you don’t get typecast as ‘the mother of the firm’s successor’ rather than a contributor to the firm in your own right! Those discussions you had with your dad when you were young and fascinated by everything in the business may be transferred to others when you become more critical and discerning about how the business is run, and your dad starts looking to the next generation – your kids! – for admiration and someone to expound to about the history and importance of the firm.

Women in business know they need mentors to help them up the corporate ladder, manage organisational politics, and expand their professional experience.

Being in a family firm can mean you have one or more mentors without ever having to search for them.

The mentor may even be your father – the founder of the firm, or its later-generation CEO. But beware your male siblings! The traditional passing of the baton to the eldest son, regardless of the talent and company knowledge his sister has, is still a problem for family business women.

The best mentor for women in family firms is often someone who is in but not of the family business: not a member of the family, but someone whom senior members of the business family rely on for expert advice, and whose discretion and integrity are assured. While rare, these people do exist.  Women in non-family businesses take note:

Like women in family businesses, find someone whose career will not be threatened by your achieving the very thing you want from a mentor: career advancement.

Sometimes family business women crack a top job simply through being there when something unexpected happens to change the long-assumed line of father-son succession. The heir apparent gets sick, dies, or – more likely – argues with the founder, resulting in the heir apparent leaving the company. Then a wife, sister, cousin or aunt, who has seemingly always been there to anchor the business, almost taken for granted but never completely overlooked, may step into a senior position practically by default.

The word ‘almost’ is vital here. It is easy for family business women to become invisible, sidelined away from formal and informal discussions about the future of the business, regardless of how much of a professional she once was or how long she was the anchor person in the firm. Family business women have to ensure that having their name written on the shopfront has real meaning. They need to insist on getting financial support from the firm to do their MBA, or leave to gain experience in a different firm in the same industry, especially if those are the kinds of markers designate their male heir apparent. Women in non-family businesses can write a similar note to self:

Put in the effort to get that career-advancing qualification, and put up your hand for that expatriate assignment to start a new branch of the firm.

Negotiate before you start where you will go when you return to your normal job, and plan the upwards career move that will be your reward.

Finally, family business women know the emotional temperature of their business. In family businesses, ‘CEO’ is likely to refer to the Chief Emotional Officer, that is, the founder’s female partner, or whoever is the ‘go-to’ person who smooths settle ruffled feathers after arguments between family members. (By the way, when succession is at issue, things more often get heated between fathers and sons, than between fathers and daughters.) Women in non-family businesses can also take on the CEO role.

Workplace norms still permit women to be the trusted confidantes of others, and to mend fences that have broken between colleagues.

What if none of this works? Family business women are not guaranteed to get to the top and, if they do, their success may be hard won. But if they don’t make it, or if they believe they would do better on their own, they are better equipped than most to start their own businesses. They have learned not to fear risk, to rely on themselves and their experience, families and networks, to solve problems. Non-family business women can learn the same lesson:

When work is not working for you inside the firm, plan your exit carefully. But don’t be afraid to leave, start your own firm, and work your way up from the top.

Mary Barrett is Professor of Management in the Faculty of Business at the University of Wollongong. Her research and teaching interests include women in management, especially as owners of their own businesses and in family businesses, women in the professions, and gender and communication at work.

For more on the experiences of women in family businesses, see Women in Family Business Leadership Roles: Daughters on the Stage by Mary Barrett and Ken Moores.

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