One of the main differences versus competitors is the long-term strategic orientation of family businesses. As entrepreneurs, we know that patience is often rewarded. Any manager primarily fixated on quarterly results is clearly in an inferior position in this regard. In this context we talk about “owner-operated and not manager-driven”. In areas such as medical technology, for example, seven, ten or more years are regularly required to recoup investments. This is impossible for most “employed” managers– particularly private equity funds with a limited holding periods. As investors in family businesses, we therefore need to give business families time to solve problems and to exploit opportunities.

They often do an excellent job of this as they are masters at making permanent improvements and acting decisively. They know that implementation is the key to success. Over a prolonged period, many tiny improvements blossom into significant competitive and margin advantages – similar to the compound interest effect in the financial world. A small variation in the shift schedule here, a minor change to the process workflow there. The individual steps are often anything but complicated, but with time and accumulation
they bring significant benefits.