The Welsh Wire: Ana Gonzalez, Director of the Family Owned Business Institute
Family businesses perform better in highly competitive environments if they invest in risky activities like mergers and acquisitions, according to new research on risk aversion versus performance in family-owned firms.
Ana Gonzalez, Director of the Family Owned Business Institute and Assistant Professor at the Management Department at Grand Valley State University, talked about her findings when she was interviewed by Sheri Welsh for The Welsh Wire podcast, sponsored by the Family Business Alliance.
What family businesses could learn from the research is that an attitude of risk aversion can cause missed opportunities, Gonzalez says.
“You need to be proactive. You know, it’s not about buying and buying businesses, of course, it’s more about being aware that there are things happening outside that you need to look for so that you don’t miss or overlook opportunities.”
Gonzalez suggests family-owned firms can benefit from having an outside group of advisors.
“Outsiders that can help you identify those opportunities out there so that you don’t overlook things that could be a good fit for your business.”
Another interesting finding from Gonzalez’s research is that family businesses don’t invest enough in research and development.
“And that’s not an attitude, that’s sort of a behavior,” she says. “However, if you think about that sort of investment, it’s very uncertain as opposed to buying a business because it’s not tangible. So you invest in R&D and you have no idea if that’s going to work, right? Well, you invest on an acquisition, at least you see where you have some immediate results.”
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