Everyone loves a good story. Ultimately a story’s power flows from how it tells us about who we are, collectively as a human family. One of the most powerful experiences of working with family-owned enterprises is learning family stories. As human as our love of stories may be, practitioners serving family-owned businesses have only recently begun to appreciate the importance story-telling can have on the legacy of a family and firm. From the earliest human records to the most recent study on family innovation, the shared story emerges as a powerful force.
The earliest forms of storytelling can be seen in images of representational art dating back more than 30,000 years to the famed paintings in the Chauvet Caves in France. These stunning depictions of various animals may be the earliest evidence of storytelling. Black line drawings of mammoths, rhinoceros, and lions fill one alcove, while the next alcove is filled with horses which appear to gallop in the flickering light of torches (see an example below). Images of hands, in red pigment, dot the entrance, symbols of some long-lost ritual. These images have inspired lead archaeologist Jean Clottes to suggest “[t]he ability to make tools defines us less than the need to create belief systems that influence nature.”[i] Many species of animals learn to learn to use tools, some may even have methods of communication which hint at a rudimentary language, but the ability to tell a story to share our beliefs is uniquely human.
Shared stories are being increasing recognized as the mechanism for sharing values, beliefs, and ideas generationally. A particularly fascinating study recently explored how this practice impacts family-owned businesses. To explore it, we simply need a short boat ride 300 miles across the Mediterranean from Chauvet to the island of Sardinia.
The second largest island in the Mediterranean, Sardinian caves house evidence of humans from at least 20,000 years ago. These remains have inspired debate amongst anthropologists about the impact of isolation on a culture[ii]. The island setting offers a unique opportunity for cultural study due to its relatively stable population and minimal outside influence. These conditions give contemporary researchers of family-owned business a perfect setting to explore the dynamics of family story-telling – the Sardinian wine industry.
Of the 95 wineries on the island, 60 are owned and operated by family, with an average of 24 employees each. Due to changes in competition, primarily driven by international producers undermining the traditional markets across Italy, family-owned wineries in Sardinia have come under increasing pressure to innovate. A recent study interviewed 41 Sardinian wine families to learn more about how these family-owned firms approached innovation. Focusing on a single industry in a concentrated area allowed the study to control for industrial and cultural variations. [iii] Based on previous research, the authors suspected shared stories in families lead to three related results:
1. Stories provide a source of legitimacy for decisions
2. Stories influence authority, particularity between generations
3. Stories impact collaboration, which impacts innovation
The real questions to be answered were the “how” and “why” questions, to discover what made a difference in the behaviors of family members involved in the winery. The study also gathered information from internal and external sources to determine levels of firm innovation.
After conducting interviews with family owners, managers, and other involved family members, not only were stories part of every firms’ culture, but patterns emerged in the content of these stories. Family stories could be categorized into two groups: stories focused primarily or exclusively on the founder; and stories focused on the family history.
Comparing those stories to their research on firm innovation, the authors suggest, “Those firms with a strong focus on the founder, the level of innovation was very low. Innovations occurred only infrequently, later compared to competitors, and were mostly restricted to incremental product innovations” (Kammerlander, et al., 2015) In contrast, firms with stories focusing on a broad family history exhibited much higher levels of innovation. The study suggests a “family story”, in contrast to a “founder story”, allows greater legitimacy to future generations to make decisions and greater latitude as to which decisions they make.
The findings of this multi-case study are consistent with other studies on family resilience and the psychological health of the next generation[iv]. These studies find that families with narratives that allow the next generation to see themselves as part of the story yield a next generation more capable to withstand set-backs, more diligent in academic endeavors and more emotionally stable. New findings taken from Sardinian wine families suggest family stories can enable firm innovation in future generations, perhaps due to emotional stability and resilience of those next generation leaders as the face critical decisions for the firm.
Variations in family-owned business are as wide as the variations in people. Cultural and historic factors will influence how family-owned businesses behave in a geographic area or industry; so far-reaching generalizations about family-owned businesses based on the study of Sardinian wineries may not be justified. However the findings are still intriguing and add to the body of research conducted in Europe and the United States. Professionals working with family-owned businesses often recognize the power of the story to communicate values to the next generation of family leaders. This study can be a reminder that a family focus, rather than a founder focus can help set the stage for future innovation. And, if innovation can lead to an ongoing legacy of success, that is a family value worth communicating.
[i] Thurman, J., “Letter from Southern France”, The New Yorker, June 23, 2008, accessed at http://www.newyorker.com/magazine/2008/06/23/first-impressions on 9/22/2016
[ii] Spoor, F., 1999 -The human fossils from Corbeddu Cave, Sardinia: a Reappraisal – in: Reumer, J.W.F. & De Vos, J. (eds.) – ELEPHANTS HAVE A SNORKEL! PAPERS IN HONOUR OF PAULY. SONDAAR – DEINSEA 7: 297a302 [ISSN 0923-9308]. Published 10 December 1999
[iii] Kammerlander, N., Dessi, C., Bird, M., Floris, M., Murru, A., The Impact of Shared Stories on Family Firm Innovation: A Multicase Study. Family Business Review, 2015 Vol. 28(4) 332-354
[iv] Duke, Marshal P., Lazarus, A., & Fivush, R. Knowledge of family history as a clinically useful index of psychological well-being and prognosis: A brief report. Psychotherapy Theory, Research, Practice, Training, 2008, 45, 268-272