When being a family business becomes a competitive advantage

Family business leaders often feel pressure to “professionalize” their businesses, adopting the structures and behaviors of non-family corporations. However, when they push this too far, they can inadvertently destroy their most distinctive competitive advantages: trust, long-term commitment, and multigenerational relationships that naturally arise between family-run businesses. What researchers call familiness is frequently underestimated or treated as a weakness to overcome, as if family involvement were a liability rather than a strength.

The authors’ work with family enterprises reveals a different path. When family businesses intentionally leverage their identity to build deeper relationships with other family-owned partners, they unlock a powerful strategic advantage. The authors call this the Family-to-Family (F2F) strategy, a structured approach that strengthens interfamily trust and multigenerational collaboration in ways competitors cannot easily imitate. Family-owned Patek Philippe captures this principle and commitment to serving other families in its well-known promise that a watch is “merely looked after for the next generation.” F2F extends that same multigenerational logic to relationships within a business ecosystem.

With deliberate leadership, familiness can become a high-performance capability that promotes growth and resilience by creating and leveraging trust with customers and suppliers. According to PwC’s Family Business Survey, many family businesses fail to capitalize on this natural advantage to develop trust. More specifically, while 78% of U.S. family businesses recognize trust as important, “only 52% believe their customers fully trust them.” Embracing their family identity through an F2F strategy can help close this gap and allow family businesses to leverage a critical component of competitive advantage.

The F2F playbook: turning familiness into a strategic advantage

The key to activating this advantage is treating the company’s familial nature as an asset rather than a liability, while building an extended family among customers and suppliers. Since most companies in the world are owned by families, it is very likely that a subset of your company’s customers and suppliers are also family businesses. Tapping into this common foundation of familiness allows companies to create mutually beneficial relationships based on shared values and long-term thinking. Doing so requires four main actions:

1. Lead with your family identity

Family businesses should differentiate themselves by leaning into their identity at a time when trust is increasingly scarce. Start by mapping which customers and suppliers are family-owned, prioritizing those with a multi-generational presence and aligned values. Dormant interfamily ties, relationships that previous generations built and have since lapsed, are often hidden strategic assets. Systematically reviving such connections across the organization can deliver results faster than pursuing new markets. When interacting with other companies, leaders must communicate authentically and demonstrate genuine family commitment, avoiding “family-washing” by backing values with actions. Track relationship depth by measuring partner tenure, whether successors join the relationship, and collaborative interactions beyond transactions.

2. Embed F2F values across your ecosystem

Traditional business models prioritize profit at a partner’s expense. In contrast, companies using an F2F strategy train employees to consistently communicate family principles across all touchpoints. Customers and suppliers are treated as long-term innovation collaborators rather than transactional parties. This requires co-developing initiatives that extend beyond sales, from CSR projects to knowledge sharing, fostering a sense of belonging to a shared business family.

3. Cultivate multigenerational bonds

Strong F2F relationships endure leadership transitions by proactively building generational bridges. This can include mentoring successors in partner family businesses and offering cross-family internships. In this manner, partners’ successors are offered hands-on experience while you send your own next generation to learn from theirs. Such practices foster early trust and reinforce continuity across generations that competitors struggle to replicate.

4. Professionalize while preserving familiness

Scaling F2F requires professional managers who embrace family values and can extend trust on behalf of the family. This means recruiting executives who genuinely embody F2F principles, not just technical skills. Empower professional managers with decision-making authority over key partnerships to extend trust beyond the family. Complement this individual empowerment with decision-making structures that balance family values, long-term thinking, and operational efficiency, achieving scale without sacrificing personal touch.

The competitive advantage of F2F

Where corporations rely on formal processes to build relationships, F2F leverages the family business DNA: personal reputation, generational thinking, and values-based decision-making. Across the authors’ research, three difficult-to-imitate qualities consistently emerge:

– Family-level mutual commitment. F2F creates bonds that go beyond contracts. Dealers do not just distribute products; they champion them. This shared ownership reduces friction, increases collaboration, and strengthens loyalty, reinforced by employees who act autonomously.

– Inherited business relationships. F2F ties span generations, providing stability in uncertain times.

– Faster decision making. F2F partners bypass bureaucracy to solve problems quickly.

Together, these advantages create relational capital that is difficult for competitors to imitate. Built on shared values over decades and reinforced across generations, F2F is a uniquely powerful strategic capability for family businesses. CEOs and senior leaders of family businesses can transform F2F relationships into a sustainable source of competitive advantage. With family businesses representing the majority of enterprises globally, F2F can have an impact across entire industries. The question for family business leaders is no longer whether to embrace their familiness, but how quickly they can implement F2F to outpace competitors still trapped in transactional thinking. In a world where trust is scarce, those who master the art of F2F leadership will not just survive, but will thrive.

Adapted from: “When Being a Family Business Becomes a Competitive Advantage”, by Vasilis Theoharakis, a Professor of Strategic Marketing and Director of the Centre of Strategic Marketing & Sales at the Cranfield School of Management, Armodios Yannidis, the CEO of Vitex, a family-owned company leading the Greek market in architectural paints and related products and the President of the Association of Greek Chemical Industries (HACI), Josh Baron, a senior lecturer at Harvard Business School, coauthor of Harvard Business Review Family Business Handbook (Harvard Business Review Press, 2021), and a cofounder of BanyanGlobal Family Business Advisors, and Moe Khant-Thu, a doctoral researcher at Cranfield University, focusing on marketing, strategy, and management of organizations, published on Harvard Business Review on 07 January 2026.