Accumulated Bad Practices Endanger Family-Owned Enterprises
According to the CIFEM|BBVA research center at IPADE Business School, half of Mexican family businesses are at risk of disappearing due to the accumulation of bad practices. Only 4% of these companies have optimal progress conditions, indicating that the remaining organizations face poor family dynamics, potentially leading to business disintegration or failure.
Who is Ricardo Aparicio Castillo?
Ricardo Aparicio Castillo is the director of CIFEM|BBVA, a research center focused on family businesses at IPADE Business School. His expertise in family business dynamics and challenges makes him a key figure in understanding the current state of Mexican family-owned enterprises.
Key Findings from the CIFEM|BBVA Study
- Sample Size: The study analyzed 476 family business members.
- Type of Businesses: 84% of the organizations are micro, small, and medium enterprises (MIYPES).
- Progress and Growth: 78% of the respondents reported progress and growth in sales, while 74% noted an increase in their patrimony.
The Family Business Risk
Aparicio emphasizes that the risk stems from family matters, which can jeopardize business continuity rather than administrative levels. He clarifies that being at risk does not imply poor business performance or economic growth, but rather highlights the need to address family-related issues to safeguard the hard work and positive results.
Alfonso Bolio Arciniega’s Perspective
Alfonso Bolio Arciniega, a professor and dean of the Human Factor and Family Business areas at IPADE, likens family business challenges to personal health issues. He stresses the importance of addressing these problems before they escalate, just as one would manage high blood pressure or prediabetes.
How to Exit the Risk Zone?
To overcome this risk zone, family businesses should enhance communication among members, plan for the future (3, 5, and 10 years ahead), and establish clear succession processes.
Aparicio highlights that a strong family contributes to a business’s strength, motivation, client care, long-term vision, pride, and trust—advantages that non-family businesses often struggle to achieve.
Succession: An Ongoing Challenge
Succession remains a significant challenge for family businesses, with 53% lacking established processes, placing them at risk. Only 5% have clear and defined plans, while 23% have future projections. However, 15% of general managers are considering retirement.
Bolio points out that succession formulas successful in the first generational transition may not work in subsequent transitions, emphasizing the need for tailored approaches.
Key Questions and Answers
- What is the main issue facing Mexican family businesses? Accumulated bad practices and poor family dynamics threaten 50% of these enterprises.
- What percentage of family businesses have optimal progress conditions? Only 4% of Mexican family businesses meet the optimal progress criteria.
- What are the key findings from the CIFEM|BBVA study? The study analyzed 476 family business members, with 84% being MIYPES. Despite challenges, 78% reported progress and growth in sales, and 74% noted patrimony growth.
- Why is succession a challenge for family businesses? Succession formulas successful in the first generational transition may not work in subsequent transitions, requiring tailored approaches.
