Lawrence Nicholson: The invisible hand in family businesses needs to be visible

The long and storied history of family-owned businesses, FOBs, has been plagued by the hurdle of not always recognising the real influence in many successful family ventures – the ‘invisible hand’ of the woman.

The role and influence of women in FOBs are more than the relic of the past, where, inter alia, women were denied loans from financial institutions to start or support businesses, unless such agreement was signed or co-signed by their husbands or male partners.

This was not the case of a far-away country, but prevailed in Jamaica up to the late 1960s and, others will insist, beyond that period.

While we are not in the relic of the 1960s, research shows that we have a far way to go. The following quote from a recent KPMG study is instructive: “Encouraging studies have examined women’s changing roles over the years. However, studies that examine the role of women in family businesses are sparse and fragmented. Various scholars have indicated the need for more systematic and extensive research into the factors that are affecting women’s involvement, leadership, and performance in family businesses.”

What is the case in Jamaica?

A 2004 survey of family-owned and women-owned businesses found that WOBs – women-owned businesses – represented the fastest-growing business segment in Jamaica. A follow-up study in 2012 found that women represent the “invisible hand” in many FOBs.

Unfortunately, there are cases that belie the anchoring role of women in FOBs in Jamaica. These scenarios capture the realities of two of the challenges faced by women in FOBs:

Two scenarios

Scenario 1: Many women-owned businesses are incorrectly categorised as FOBs to reduce possible tension between ‘husband and wife’ or to avoid family conflict. Consider the following real scenario:

Interviewer: “Is this a family-owned business?”

Respondent (woman): “Not really, it was started and is owned by me but …”.

Man (husband) interrupting: “Oh, I thought this was a family business …”.

Respondent (woman): “You know what to avoid any argument, list it as a family-owned business.”

The real story – the husband knows, the children know and the people in the community know that this business is owned and operated by the wife. The husband works with the government and has a ‘hands-off’ attitude towards the business. However, to avoid or reduce tension between wife and husband, and maybe other family conflicts, the business is categorised as a family business.

There is a celebrated case in which the husband was asked to be part of a business owned and operated by his wife for more than 20 years but he works in the public sector and has no role in it. He agreed on the basis that he would be the general manager. There are similar cases across Jamaica.

Scenario 2: The most common name assigned to FOBs in Jamaica is ‘name of father and son(s)’, such as ‘Nicholson and Sons’. This even when there are only daughters in the family. Such names are sometimes assigned to the business long before there were any children. The survey has not unearthed any case of ‘… and Daughters’.

This redounds to succession is biased by gender and daughters are almost always excluded as candidates.

Are these scenarios much ado about nothing? Not when you dig deeper and hear the ‘hearts’ of many women who find themselves in the cited scenarios. Let’s heed the call to make the invisible hand visible. The sustainability of many family businesses depends on this.

More anon!

Lawrence Nicholson, PhD, is a senior lecturer at the Mona School of Business & Management, University of the West Indies, author of Understanding the Caribbean Enterprise: Insights from MSMEs and Family-Owned Businesses, and a director of the RJRGLEANER Communications Group.Email: lawrence.n.08@gmail.com