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Why shared family business culture matters

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October 8, 2019

The eve of the Great Depression doesn’t seem like the most auspicious time to start a business, but that’s what the Gallagher founder did, in a basement in Chicago in 1927.

That man was Arthur J. Gallagher, a local insurance agent ready to strike out on his own. Arthur had ideas that set him and the way he did business apart from others. In addition to offering commercial insurance he dealt in advice that protected his business clients against loss. He pioneered the idea of risk management, analysing their exposures and coming up with solutions to safeguard their futures.

In this respect he was a man for the times: the stock market crash subsequent economic slump boosted interest in the concept and Arthur’s business grew. By focusing on his clients’ businesses’ wellbeing instead of just on earning premiums he forged relationships based on trust. Over time these relationships got bigger and involved larger companies.

Arthur’s three sons, John, Jim and Bob (who was to become the next CEO and company president) all joined the business, and this next generation kept the new ideas based on customer service coming and the business kept growing as its innovations were adopted nationally and internationally.

In 1990 Arthur’s grandson J. Patrick (Pat) Gallagher took over as president and would later succeed his uncle as CEO, his role today. Here in Australia fourth generation Gallagher Sean is national Head of Branches.

The longevity test

Why should that matter? Well, because the average lifespan of a Standard and Poor’s 500 company is now less than 20 years, and that means that long-term continuity in how a business interacts with the wider community and individual customers is a rare thing.

Rare and like most rare things, valuable, because over time businesses gain deep knowledge of their customers, not just their histories but their evolving needs and strategic directions, and this translates into superior service, because if a business can actively contribute to its clients’ wellbeing it earns their loyalty and gains reputation.

And when one family company does business with another, their values match up. Integrity matters, how they treat their own and other people is important, they’re invested in their place in wider society as a business and a clan, they want to contribute to making things better for everyone, they are willing to be accountable for outcomes and they’re committed to the future.

And these are the qualities everyone wants in a business partner, which might explain why the family business is such a successful model. Why would you want to deal with an organisation that doesn’t operate on the basis of earned trust backed up by a track record of reliability in getting it right? You wouldn’t.

Talk to us

So when it comes to your business needs, bear in mind that a supplier or service provider that has the family DNA embedded in its operations is probably far more likely to be the best match. That way you’re setting yourself up for a partnership that goes the distance.

Just call 1800 240 432 to chat with a Gallagher broker about your particular needs.

Contact your local insurance broker


This article is reproduced courtesy of Family Business Australia, where it was originally published. 


 

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