What makes family-owned companies not just survive – but outperform?
Family-owned businesses generate more than 70 % of global GDP and employ 60 % of the world’s workforce. Their impact – and their example – are extraordinary.
A recent McKinsey & Company Study Report found that family businesses combine resilience with superior long-term performance.
Across 1,800 companies analyzed, family-controlled firms achieved higher economic profit and shareholder returns than non-family peers—often by thinking in generations, not quarters. The report finds 4 critical mindsets and 5 strategic actions that are specific to high performing family-owned businesses.
1. Purpose Beyond Profits
McKinsey found that 93% of top-performing family businesses define a clear purpose beyond financial returns—and more than half actively measure their social and environmental impact.
These organizations view purpose as an operational compass, shaping decisions from hiring to community engagement.
TZG Perspective:
We believe that values create value. Our TZG Way centers on integrity, meritocracy, and devotion to excellence—principles that guide not only investment decisions but also how we support our portfolio leaders.
When purpose is embedded in culture, performance follows.
2. A Long-Term View and Reinvestment Mindset
The outperformers McKinsey studied share a “decades mindset,” favoring reinvestment over dividends. Between 2017 and 2022, family-owned firms delivered dividend yields 12% lower than peers yet achieved higher economic profit and proved far more resilient in crises.
TZG Perspective:
Patient capital is an advantage. We reinvest earnings to fuel talent growth, innovation, and efficiency rather than optimize for short-term payouts.
Through multi-year planning and close operational partnerships, we help our companies scale without sacrificing their DNA.
3. Financial Caution and Resilience
Family businesses are known for conservative balance sheets—and McKinsey’s data confirms it.
Their net debt-to-equity ratios are 6–10 points lower than peers’, providing the buffer needed to weather recessions and rebound faster. The lesson: prudence enables independence.
TZG Perspective:
As a family office, we share that discipline. Every acquisition is structured to strengthen—not strain—the balance sheet.
We prioritize flexibility and optionality in financing, ensuring our partners can invest when opportunity arises and stand resilient when markets tighten.
4. Efficiency and Decision Speed
Unlike clunky corporations slowed by layers of bureaucracy, high-performing family enterprises excel at fast, values-aligned decision-making making them more efficient at both investing and operations compared to their peers.
McKinsey found that they balance agility with deliberation – acting quickly when aligned, patiently when perspectives diverge.
TZG Perspective:
Our partnerships reflect the same model.
We invest in leadership development and culture building, empowering management teams with autonomy while maintaining clarity of purpose and accountability.
5. Strategic Actions That Differentiate Winners
McKinsey highlights five strategic actions that, combined with these mindsets, deliver outsized results:
- Diversification
- Dynamic resource allocation
- Capital and operational efficiency
- Relentless focus on talent
- Strong governance
At The Zaf Group (TZG), our mission to build impactful, values-based businesses has led us to partner with exceptional family- and founder-led companies such as ACP CreativIT and Storr.
The McKinsey findings validate what has guided our “TZG Way” investment philosophy from day one—and reflect how we build enduring value:
- Drive smart growth through a combination of organic expansion and strategic M&A that strengthen the core.
- Pursue operational excellence, focusing relentlessly on high-impact growth levers.
- Invest in people and governance, ensuring both continuity and accountability.
These are principles we live by at TZG – helping family businesses grow stronger, smarter, and more sustainable. Purpose, patience, prudence, and people are the cornerstones of lasting success.
Learn More
Explore the full McKinsey report including a link to the original Study HERE.
Visit our Portfolio to see the family-owned companies TZG partners with.
Follow The Zaf Group on LinkedIn for more insights on leadership, growth, and long-term value creation.
