Today, the majority of economic organizations are family businesses in Hungary, just like in any other country of the world. Their contribution to GDP is significant, as well as their role in employment. They show great variety: they are present in many sectors, and there are many types of small businesses from operating with a few employees to large, even international companies. At the same time, compared to developed countries, the Hungarian and former Eastern blocs’ vastly expanded family businesses were created in the 80s and 90s of the last century. So they are up to the second, and in exceptional cases the third generation, but many of them are still owned and managed by the founders. As a result, they are not comparable in size to many generational and longly been considered multinational German family large companies, such as the Volkswagen, the Henkel, or the Merck. Moreover their leadership and operational practices often remind the people to an even smaller size than their actual size – as the recent publication of Corvinus CSVK pointed out. Intensive development of domestic family businesses is a national economic interest, because they provide the third major source of economic growth, in addition to partly based on state developments relying on EU funds and investments by multinational large companies.

At the conference Boross Dávid, the co-chairman of the Felelős Családi Vállalatokért Magyarországon Egyesület illustrated the weight of family businesses with some numbers: the 75 members of the association manage 600 companies, that in the last year reached the sales revenue of HUF 1,000 billion, exported 160 billion forints, and made on investment of HUF 80 billion.

The representatives of the Ministry of Innovation and Technology, Dr. György László State Secretary, and Szepesi Balázs deputy State Secretary said, an important element of the government’s current SME strategy is to support the generation change of family businesses, because more than half of the companies with an annual turnover of HUF 100 million are involved in this issue. Beside, the digital transformation of the sphere would also be helped by several measures: in addition to extending digital training, it includes the creation of an entrepreneurial website and mobile application, and in a professional manner, the development of modern digital pilot factories. Family companies could also benefit from external expertise and mentors.

Gabriel A. Brennauer, executive member of the Hungarian-German Chamber of Commerce and Industry, opened the line of German speakers at the event. He gave three major advice to Hungarian family companies: be open and informed on their own market, don’t be afraid to ask for external professional help, and develop their emploxees, invest in human resources.

Dr. Virág Heinzelmann, head of the Family Council of Blanc & Fischer Family Holding (founded in 1925), that is known among other things for kitchen utensils, gave a presentation of her own practice. The experience of a company that has been embracing four generations, is that in the first round, the common values of the family must be defined, and then these must be passed ont o the next generation, and later young people should prepare for ownership following these values.

You can read Dr. Virág Heinzelmann’s presentation here .

Weissenbacher Emese, Chief Financial Officer (CFO) of the Mann+Hummel Group, which is also a family-owned company, with an annual sales of four billion euros, has shown how a traditional company has entered into the path of digitalisation with the collaboration of management and family owners.

You can find Mrs Weissenbacher’s presentation by clicking here.

From the podium converstaion of the second half of the conference it became clear, that familiy businesses are in a sepcial position from in a HR perspective. The success of a company often depend ont he ability of family members with ownership and/or leadership roles tom make rational professional decisions over their emotions, and whether they dare to ask for external professional help. They all agreed on that, while there is no common value system and long-term vision within a company, it is impossible to make grounded decisions about succession or digital transformation.

The director of the Corvinus CFB, Dr. Drótos György, in his closing lecture, first discussed the concepts and sub-areas of corporate digitalization and HR management, and then pointed out that, depending on the current stage of their life cycle, family companies face very different digitization and HR challenges. Start-ups that started with family cooperation and have been running for up to a few years are often “born to be digital”, so they have been digitized since their foundation, especially when they are operating in an information-intensive industry. Due to their small size, the HR function is not emphasized in their case, the main focus is on the division of labor and competence between family members. On the contrary, digitization is usually not systematic in small businesses that have been operating for decades, but are still under the operational control of family members, it is limited to a few elements, the HR function typically means only operational tasks, but they are not done in full. In these family businesses, significant improvements would be needed in both digitalization and HR, that if you have the commitment and openness you need, you can start with little recources, and even in small steps.

You can read the presentation of Dr Drótos György here.

Pictures of the 2nd International Family Firm Conference are available on this link.