How to break glass ceilings and inject inclusivity into family businesses

Family businesses are a cornerstone of the global economy, renowned for their unique blend of family and business dynamics. They account for more than 70 per cent of global GDP and about 60 per cent of global employment. They are often deeply embedded in their communities, ensuring that their impact is felt far beyond their immediate economic contributions.

However, family businesses face the challenge of fostering diversity and inclusivity, both as a social responsibility and a strategic advantage. This challenge is not limited to bringing more diverse perspectives into the family; it also extends to creating fair and equitable opportunities for non-family members who frequently encounter barriers like the "glass ceiling." This refers to the invisible but significant barriers that prevent individuals – especially women, minorities and, in the case of family businesses, non-family employees – from advancing to leadership roles. In many family businesses, this issue is compounded by the traditional preference for family members in senior roles, often sidelining talented non-family employees despite their competence and contributions. Addressing this inequity is critical for the long-term success and sustainability of family enterprises. Here are some of key points to consider:

Understanding the glass ceiling in family businesses

Non-family employees are vital to the success of family businesses. They bring specialised skills, fresh perspectives and professional expertise that complement a family’s vision. However, many of these employees face limited growth opportunities because top leadership roles are typically reserved for family members. This dynamic often leads to frustration, disengagement and high turnover among non-family staff, ultimately weakening the business’s talent pool. The glass ceiling in family businesses is not always intentional. It often stems from the deeply ingrained traditions and cultural norms that prioritise family involvement. While preserving family control and values is important, it should not come at the expense of merit-based leadership. Breaking this barrier requires a conscious effort to redefine the criteria for leadership roles and create an inclusive environment where talent, not lineage, is the primary qualification for advancement.

The problem with primogeniture

The lack of inclusivity in family businesses is often starkly evident in the practice of primogeniture, a tradition that prioritises the eldest male family member for leadership roles. This outdated approach not only limits opportunities for non-family employees but also sidelines capable women within the family itself.

Despite significant progress in gender equality globally, many family businesses remain entrenched in patriarchal norms, overlooking the contributions and potential of daughters and other female relatives. This exclusion perpetuates a narrow view of leadership, depriving the business of diverse perspectives and innovative approaches.

By clinging to primogeniture, family businesses risk alienating talented women who could bring invaluable skills and insights to the table, ultimately undermining their ability to adapt and thrive in an increasingly competitive and inclusive business landscape. Addressing this imbalance requires a deliberate shift in mindset to prioritise merit and capability over tradition and gender.

The benefits of inclusivity

Creating inclusive career opportunities is not just about fairness, it’s also a strategic move that benefits the entire organisation. Inclusivity ensures that the best talent is utilised effectively, leading to better decision-making, increased innovation and a more engaged workforce. When non-family employees see clear pathways for growth, they are more likely to invest in the company’s success, driving loyalty and long-term stability. Furthermore, inclusivity enhances the reputation of family businesses, making them attractive to a broader talent pool. Younger generations, in particular, are drawn to organisations that prioritise diversity, equity and inclusion. By fostering a culture that values all employees equally, they can position themselves as modern, forward-thinking employers.

Overcoming barriers to inclusivity

To address the glass ceiling and promote diversity, family businesses must first acknowledge the issue. This requires a willingness to examine existing practices and challenge long-held assumptions. Here are some practical steps family businesses can take:

• Transparent career pathways: One of the key issues for non-family employees is the lack of clear career advancement opportunities. Family businesses should establish transparent pathways that outline how employees can progress to leadership roles, regardless of their family status. This includes setting merit-based criteria for promotions and ensuring that all employees have access to training and development programmes.

• Inclusive succession planning: Succession planning in family businesses often focuses solely on preparing the next generation of family members for leadership. While this is important, it should not exclude talented non-family employees. By including non-family members in succession plans and leadership development initiatives, family businesses can ensure that they have a diverse pool of candidates ready to step into key roles.

• Inclusive governance structures: Family businesses can benefit from diversifying their leadership and governance structures. This includes bringing non-family members, women and younger leaders onto advisory boards or into senior management positions. Their external perspectives can balance family interests and enhance decision-making processes.

• Addressing unconscious bias: Unconscious bias often plays a role in perpetuating the glass ceiling. Family businesses should invest in training to help leaders recognise and overcome these biases, ensuring that decisions about promotions and assignments are based on merit rather than assumptions about family loyalty or cultural fit.

Bridging tradition and modernity

For many family businesses, the tension between tradition and inclusivity can be a source of hesitation. Balancing the preservation of family values with the need for diversity requires a thoughtful approach. One way to achieve this is by aligning inclusivity efforts with the family’s core principles. For instance, a family business that values community engagement might frame its diversity initiatives as part of its broader commitment to social responsibility. The next generation of family business leaders also plays a crucial role in driving change. Younger family members often bring fresh perspectives on inclusivity, shaped by their exposure to global and multicultural environments. Encouraging them to champion diversity efforts can help bridge the gap between tradition and modernity.

Unlocking potential to enhance competitiveness

Addressing the glass ceiling and fostering inclusivity in family businesses is a complex but necessary endeavour. By creating equal opportunities for non-family employees, women and younger employees, these businesses can unlock untapped potential, strengthen their talent pool and enhance their long-term competitiveness. Inclusivity is not about diluting the family’s influence; it is about recognising that the success of a family business depends on the collective contributions of its entire workforce.

As family businesses navigate the challenges of a rapidly changing world, embracing diversity and inclusion will be key to their resilience and growth. By breaking down barriers and ensuring that all employees have a fair chance to succeed, family businesses can continue to lead not only as economic powerhouses but also as exemplars of fairness and innovation. 

Alfredo De Massis and Emanuela Rondi are authors of The Family Business Book: A roadmap for entrepreneurial families to prosper across generations, published by FT Publishing