Family to Family: Laird Norton Tyee Family Business Survey 2008

While most of the survey results in this report are based on information from the 25 largest family-owned businesses we surveyed, the correlations are drawn from the 2008 Laird Norton Tyee Northwest Family Business Survey results of 200 family-owned businesses. A larger data set was required to accurately measure correlations.

The study asked respondents four questions to gauge how much priority and attention the needs and wishes of each individual stakeholder receives, and how much the goals of each group influences the decision-making process. (A list of the four questions asked to gauge attention given to each group can be found at the end of this section.) Separately, the family businesses were asked to rate how profitable their business was compared to its competitors. A statistical analysis then calculated whether giving the needs of different stakeholder groups more time and attention correlated into higher profitability compared to the business’s competitors. A score of 1 would indicate a perfect correlation, meaning the business’s profitability over its competitors moved in perfect step with the amount of time and attention paid to a particular stakeholder group. A score of -1 would indicate that the profitability and amount of time and attention paid to a particular group moved completely opposite of each other. In other words, the less time and attention given to a group, the more profitable the business was. A score of 0 would indicate there was no correlation.

The following statements were used to gauge how well a business incorporates input from each stakeholder group:

Wishes of owners receive high priority
Needs of owners receive time and attention
Satisfying owners' claims is very important
Goals of owners influence decision making

Respondents rated these statements on a scale of 0-10 with 0 meaning they strongly disagreed and 10 meaning they strongly agreed. The same statements were asked again to measure how well the business incorporates input from the management and family stakeholder groups as well.

The ratings of that group of questions were correlated to ratings of the following statement, which respondents also rated on a 0-10 scale:

Relative to our major competitors, our firm is VERY profitable.