A TALK WITH GUIDO CORBETTA
Photography by Matteo Pastorio
Guido Corbetta is Professor of Business Strategy and Professor of Strategic Management in Family Businesses at the University Luigi Bocconi in Milan. His expertise is focused on family businesses, medium-sized enterprises and enterprises in the fashion and design industry. We met at our headquarters in Fiorano Modenese to learn more about his work, today’s economic situation and its area of interest, with which we share a great value: people.
What is the current situation in the world economy?
I believe it is objectively an uncertain situation: we come out of a prolonged crisis that crossed the western countries. Now, there has been a fairly long period in which, despite the crisis in the West, the Asian world was booming and was bringing with it other countries of the western economy. Then, within a few years, the US has experienced a period of recovery. Objectively, today, the situation is a bit more complicated because it is not possible to recognize safe areas of development in the world: China, last year, grew by + 6.5%, a lower growth rate than previous years but on a recent increase in value, these are very important rates. Certainly China continues to be a major player and it is clear that, together with the Asian countries, it could boost world growth, but I think it must be accompanied by a concerted policy that no longer exists. We will need to wait until the effect of President Trump’s new policy who, in my opinion, has made a reasonable choice, from a political point of view, for the United States: the role of this economic power is threatened by China and the choice to join other powers of less force, namely Russia, is a right move. The policy undertaken by Trump suggests that the US has every intention to object to the Asian country, which could be positive for the overall system since China is actually having a dominant role, potentially dangerous.
How do you place Italy in this uncertain scenario?
First, you need to be aware of the country’s limitations: Italy is a small country and, consequently, its weight in the world can only be small. Nevertheless it falls among the first ten countries to have economic importance in the world, but its political weight is bound to be contained. From this point of view, the European project was interesting because it also gave support to countries, like Italy, that cannot aspire to reach a place among the great powers of world politics. Unfortunately, the European design does not give future certainties.
Let’s dwell more on Italy: your field of study focuses on family businesses, of which Italy is an excellent representant. How did this interest grow?
I think that when someone develops an interest, it can happen by accident. In my case, it happened that the professor was working with was asked to participate in an important research on entrepreneurs and the theme of generational change – we did twelve interviews to twelve fathers, and twelve daughters and sons – and thanks to this experience I became interested to family businesses. With high probability, the fact of coming from a family of entrepreneurs has helped: my uncle has an important mechanical contractor company and my parents had some food shops. When I did those interviews, I understood what we were talking about, what the people I was talking to meant, and probably my interest lighted up this way. Then, at the time, I was a young man who aspired to become a Bocconi University professor and I had to understand if my interest would still lead to professional developments. Then, I tried to figure out if in the rest of the world others were studying about it – my academic origins are rooted in management – and I discovered that only two people did, until then: a professor at the Kellogg School of Management Chicago and a professor of IESE Business School in Barcelona. These two professors of Business Strategy, like me, took care of family businesses. Then, I tried to convince my professor that this field was not yet studied in Italy and perhaps deserved attention. My interest, therefore, has been a research interest.
What is the overview of family businesses today?
On this point, we have not opinions but data. Bocconi University has an observatory supported by the association of family businesses, by Unicredit, by Bocconi itself and the Chamber of Commerce. The observatory monitors the performance of all family businesses in the area: in Italy, there are 15,000 enterprises above the turnover threshold of twenty millions, a relatively small number; of these 15,000 companies, 10,000 are family-controlled, the 65%. Annually or every two years, the observatory monitors the performance, ownership structure, the governance arrangements, control and leadership of these companies. The picture that emerges shows that these companies, after the 2008-2009 period, have performed well in terms of growth and creditivity. In enterprises are in place significant changes in terms of governance, ie, we are witnessing more inclusion of people that are not part of the family within the board of directors or management. The weaknesses may be identified in the growth – many of these companies, with good development potential in the world, grow less than they actually could – and in the acquisitions made by companies which, unfortunately, from 2001 to 2014, a very long time, have not completed them. I believe that, sooner or later, in the growth of a business, organic growth is a must-do: you have to wonder if it’s worth making some acquisition someday. In conclusion, the overview of the industry is undoubtedly positive from the point of view of present performance. When markets become larger, more uncertain, it is clear that you require stronger actors. In recent years, we cannot deny it, there has been a Darwinian selection: the companies that survived are stronger than those who were present in the market of 2007-2008.
Is there one area in particular in which the family businesses are more successful?
The observatory makes some focus on the field too, we have made 29 so far: areas in which family businesses are successful are many, from fashion to mechanics. In short, there are lots of successful businesses. Let’s take as an example the field of pharmaceutical: twenty years ago, it was believed that this sector in Italy was over and instead, today, we have at least a dozen companies, including Chiesi of Parma, who have the potential to have a very interesting future. I would not, however, describe a totally positive picture because, in reality, it is not so, but in our country there is a lot of potential and I believe that it owes to this type of family based businesses. In the process of creating a company, the starting point is still the family, if you do not start from the staff, but in the future evolution of the project. Here, I think it’s important that, gradually, the families owns and the companies become more independent from each other because, if this is successful, the company may have its own development. This does not happen in Italy with the same ease with which it happens in the United States, where it is also easier to quote your company in the stock market, let in outside shareholders, making the most important growth operations, or join with other companies. In Italy, these processes take place more slowly.
In your opinion, is there a particular reason why Italy is a breeding ground for these companies? There are sociological or geographical reasons to it?
No, I do not think so. Italy is not the only country that favors the development of family-controlled companies; just think of China who has arranged a meeting with the first generation of Chinese entrepreneurs and our entrepreneurs: we were 20, they were 500. I am telling you about this event to understand what are the numbers that we face, but also to emphasize that the family, however you want to hear, is a relevant subject of the economy, and in all countries where it is an important subject, the family has an important impact on business.
In Italy, the concept of ”family” is the basis of society, both for cultural reasons and for the Catholic religion…
With all the negative tendencies, including the most negative of familism that from the point of view of the family-controlled businesses, it means not to give priority to the company, but the short-term well-being of the family. For example, the appointment of a family majority managerial team is a serious mistake.
Unfortunately, the talent is not hereditary and everyone should understand when to give way to those who, instead, have it.
I think that for Italian companies, the presence of a family entrepreneur is an added value but, at the same time, entrepreneurs and family should do what Marc Puig, director of a Spanish manufacturer of perfumes, said: a self-disempowerment process of the family is necessary. The power, in the capitalist system, is in the hands of the owners, and is the family owner to have to implement a process of self-limitation of their power; Once completed, the company has more power and develops better.
Let’s talk about creativity. How the concept of creativity applies to your work? Can you be creative with the numbers?
Sure, but we in the end we are researchers, although not at the levels of researchers in medicine and physics. One area that requires more creativity is asking ourselves questions: after thirty years of research activity, after eight years of the EUMC, is not so easy to think of new questions, or an idea that adds anything further. A winning secret to overcome the problem is to put together different people: in recent years, an important contribution to our research, was given by a young man, who at this time is in Spain for a sabbatical, a man who took a PhD in Copenhagen, a very different person to me who studied in finance, he put a lot into posing new questions to which I had not thought, and, conversely, I gave him answers that he would not have expected. I think it’s because of age and diversity. So, in putting on a research team we have to insert elements, things that have to do with creativity.
What is your relationship with design? And what is your opinion on this field?
My relationship is undoubtedly mediated by businesses and I have an great admiration and respect for design. A dozen years ago, the Bocconi University had a relationship with the Altagamma Foundation, an association of luxury companies – wine, hotel industry, fashion, design, food – so I created an MA in fashion and design experience, MANFED, which still exists today, thanks to which I have had the opportunity to know the companies in the field of design: Alessi, Boffi, Guzzini, Molteni… So, I think much of the design and I believe that companies have a grand potential to do much more than fashion did in Italy and for Italy. A fine example of creativity is the Design Week, which seemed to have been designed along the lines of Fashion Week, but turned out completely different. I believe that this is a world mediated by companies: I’m not focused on designers but on entrepreneurs who “use” design, who relate to it. Seeing them, I understand that this is a world that has huge potential. I think it would not hurt if these companies decided to structure themselves more: the industry is beginning to be crossed by some intervention of private equity, people investing with medium-term return expectations, three to five years, and then sell the company, and it is a very important signal, indicating that there is an expectation that this world has to realize its potential in the coming years. The world of design has already done a lot but is in front of an interesting growth, even as the world is developing a lot of attention and demand for design.
Also, my rationality, due, I admit it, even to my profession, leads me to be attracted to who or what is not rational. In fact, I like many designers and, in general, different creatives. I have great admiration for Michele De Lucchi, it strikes me how he can give, with a sign, an interpretation of a world that I would be able to give in two pages of description.
I repeat, Italy has the great potential to put together the original design and the doing, the ability to do things.
As for Mutina, which are, in your view, the parameters that have made it successful?
For me it is clear that the success so far is linked to people; without the quality of entrepreneurship, success is not going to come true. In addition, an interesting aspect is that Mutina has tried to break the industry paradigms: when a company can not base its success on the big shoulders, the size, placement, it must base it on the ability of fit, the wedge inside a large area with an original proposal. It seems to me that Mutina found it: propose designers to produce products of a certain type. I think that designers would not have stayed if they had not found a company very responsive, faster, which in turn demands speed his collaborators, which claims quality and excellence of behaviors and responses. Quickly take action to meet the designers’ proposals and turn ideas into products.