• Transform magazine
  • June 15, 2021

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Family business: branding a legacy

Hasan Profile Pic Hi Res

Hasan Fadlallah, founder and CEO of Dubai-based branding agency Brand Lounge, argues it is now essential for family businesses in the Arab world to create a strong branding. Where earlier, an entire empire was branded with the owner’s name, building or revisiting a family business brand is now a prerequisite rather than an option, he writes.

“There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old condition, and lukewarm defenders in those who may do well under the new.” - Machiavelli, The Prince, circa 1555

Family businesses in the Arab world have undergone dramatic mutations. It all started with the patriarch building a business from the ground up, and rallying the family around him to help grow the organisation. Following the oil and gas boom and the influx of cash, family businesses started shifting to a higher gear by expanding the organisation’s operations. Initially, sponsoring businesses venturing into the region lured by its emerging wealth, was the norm. The next move was acquiring other businesses. This combination heralded the era of large conglomerates with unimaginable wealth.

Today, changes in globalisation, market dynamics and leadership vision, have reshaped the families’ business concept, forcing them to adopt and adapt to these changes, restructuring their empires and growing to critical masses that are now dictating nations’ - and sometimes global - economies. But this comes at a cost. Red flags are being raised, questioning the integrity, transparency and ethics of family businesses. Critics are also arguing about family businesses sustainability if they do not revisit decades-old way-of- work models.

Chief among the market-morphing changes being currently witnessed, is the shift from oil- based to business and service-based economies, freeing up local markets from the burden of sponsorship. Foreign businesses can now freely thrive in the GCC without the need of a local sponsor. Family businesses have now to part ways with the concept of sponsorship, forfeiting a substantial portion of their revenues, and look for alternate, more innovative sources of income.

Investments in education and nationalisation of the workforce, hiring more qualified expatriates, and investing in technology, are some of the other factors reshaping the local markets, and which family business have to adopt if they were to ride the wave.

The 21st century signals a new dawn for family businesses, exposing them to previously unattainable opportunities both locally and globally, and opens up new areas of expansion and wealth-building waiting to be harvested. But, again, there’s a catch; none of the above can happen today without addressing a previously ignored or marginalised aspect of the business, branding.

Where earlier, an entire empire was branded with the owner’s name, building or revisiting a family business brand is now a prerequisite rather than an option. With the reliance on growing business organically, innovation in approaches and solutions, and the exposure to global - and highly branded - markets, you are now as good as you brand says you are.

Another aspect that needs to be prioritised, especially in family businesses, is culture. While in yesteryears, the family and owner’s own culture were the guiding principles of the business, it became imperative today to reengineer a culture that rallies employees from all walks of life, and nurture values that work inwardly but outward too. This is not by any means about forfeiting the brand’s essence, on the contrary, this is about bringing into the light its purpose, promoting years of experience and business acumen for the world to see.

This is the era of make or break for families business. This is the time to chose between being an IBM or a Kodak, and an Apple or an Amazon.