In 2016, the world’s dispossessed found their voice. Their central beliefs? That the “system” no longer represented them; that they were excluded from the proceeds of economic growth after the global financial crisis; and that their representatives no longer cared for their concerns.
As the world’s global elite gathers at the World Economic Forum Annual Meeting in Davos, attendees need to turn their minds to providing solutions that can help remedy the maladies afflicting significant portions of the world’s population. Failure to do so means that 2016 risks being a forerunner to a much more dramatic 2017 and all the instability that could generate, politically and economically.
The problems are well known; solutions are much harder to come by. Yet one factor worth considering is the role family-owned or family-influenced businesses can play.
According to European Family Businesses and KPMG, family firms account for approximately one third of all companies in the S&P 500 Index. Further still, 30% of companies worldwide with more than $1 billion in sales are family-controlled enterprises. Whether they are mom-and-pop stores or conglomerates, family businesses touch upon all aspects of life in nearly every country around the world.
What role can they play? Firstly, because many of these businesses are passed down through generations, families can take a long-term view to developing the skills base of their employees. Investing in their workers, firms not only generate staff loyalty, but also productivity gains in the long term, another key dilemma facing the global economy.
Back in 2010, the then UK Coalition government sent an email to all public sector employees asking them to identify where savings and efficiencies could be made as part of a cost-cutting agenda.
As businesses we need to have trust and faith in our workers to do the same – not simply by cutting jobs or exporting them, but by working to establish better and more productive working practices. By improving the skills base of our companies, we can create innovation to drive economic growth.
Across the businesses my father S. P. Hinduja founded and cultivated, we employ more than 70,000 people worldwide. From banking and finance to IT and business processing, from healthcare to project development, the group’s primary objective is to grow businesses over a long-time period, providing strategic support to independent professional managers.
Investment in skills is not the preserve of governments alone. By the time state systems have identified a need, it is too late. On the other side of the ledger, many private companies are so fixated on quarter-by-quarter reporting that their agendas are driven by cost-cutting and maximizing revenue. Family-owned businesses can temper the short-term fetishism of some publicly-traded companies and the crisis-driven incrementalism of governments.
Secondly, our global footprint comes with enormous responsibilities to the communities we work and operate in. The move in the past few decades towards corporate social responsibility (CSR) programmes is to be welcomed, but it is imperative that these moves are not simply cosmetic. CSR is too often seen as a shortcut to fleetingly positive PR, which cheapens the important and long-standing work conducted by many businesses in their geographies. Family firms, through a combination of social pressure and local networks, are well positioned to make a substantive difference in the application of CSR programmes.
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Finally, and most importantly, family-owned businesses can hardwire values into their operating models. The ability to run a successful business relies on your consumers knowing what you do and how you do it. Values create corporate culture, which, in turn, feed into popular culture. As family businesses we can positively impact the cultures we operate in by insisting on adherence to simple and timeless values.
In the case of Hinduja Group, we are driven by the guiding principle of my grandfather who once said that his dharma (duty) is to work so that he could give. This principle has been carried forward under the chairmanship of my father, S. P. Hinduja whose leadership has lasted more than 40 years.
He has only been able to do so because of his own business values, the most pertinent being how we treat one another. My father insists that the approach we take in business is built on doing right by others, so that they will do right by us. Call it enlightened self-interest. Call it common sense. Call it what you will, but someone needs to take the first step. Humility and empathy can carry you a long way in business, especially if you know your business will be handed down to a new generation at some point.
As we approach 2017 and the challenges of the globally dispossessed, let us consider how we can all help shape the economic growth we need to drive social inclusion. Our family business stands ready to help and we encourage others to join us.
The views and opinions expressed in this article are those of the author and do not necessarily reflect those of the Hinduja Bank or the Hinduja Foundation US.