By: Gary Lamphier, The Edmonton Journal

November 20, 2004, Edmonton Journal (Alberta)

It's been said before, but it bears repeating: It's time we dropped our long-held fixation with Calgary and its aggregation of big, publicly traded oil and gas companies.

Despite our jointly shared energy wealth, Edmonton's more diversified, family-dominated business culture arguably has more in common with cities like Portland and Minneapolis, where family firms play a bigger role in the local community than widely held public companies.

In fact, with the exception of the United States and Great Britain -- where large public companies dominate the corporate landscape -- the more traditional family business model is king in most countries around the world, particularly in places like Italy, Spain, Sweden and Mexico.

Even in Canada, which sits somewhere in the middle of the spectrum, family firms account for roughly half of all economic output, estimates John Ward, one of the world's leading experts on family businesses and a visiting lecturer at the U of A's Centre for Entrepreneurship and Family Enterprise.

"The pervasiveness (of family businesses) is shocking to most people. A good rule of thumb is that it accounts for about half of the economy's employment base and half of GDP," he says.

Ward, co-director of the Centre for Family Enterprises at Chicago's prestigious Kellogg School of Management -- rated the world's top business school by such publications as Business Week and The Economist -- and the author of three books on family business, says most people wrongly assume family businesses are "mom and pop" operations.

In reality, some of the biggest, most successful companies in the world, both public and private, are family-controlled or have their roots in family ownership -- companies like Wal-Mart, Ford Motor Co., Cargill, Disney, New York Times Co. and Dow Jones.

Here in Canada, the list includes such corporate giants as Magna International, Atco Group, Rogers Communications, CanWest Global -- which publishes the Journal -- McCain Foods, George Weston Ltd. and Thomson Corp., to name just a few.

In Edmonton, the century-old fusion of family ties and business has produced such leading firms as Triple Five Group, Katz Group, Maclab Enterprises, Lockerbie and Hole and many others (see accompanying table).

A few have gone public but remain family-controlled (The Brick, Melcor), while most (Triple Five, Millar Western, Maclab, Stream-Flo) remain family-owned.

Some others (Fountain Tire, Lockerbie and Hole) have adopted hybrid ownership structures -- with employees and outside partners also holding equity -- while some former family-owned firms (PCL Construction) have migrated completely to employee ownership.

Edmonton's family-focused corporate culture prompted Mike Percy, Dean of the U of A's School of Business, and Lloyd Steier, director of the U of A's Centre for Entrepreneurship and Family Enterprise, to launch the Alberta Business Family Institute in early 2003, with financial backing from the likes of Sandy Mactaggart, Stan Milner and Ron Mannix.

Housed at the U of A's Telus Centre, the Institute offers advice, networking opportunities and other services to Alberta's family-run enterprises.

Ward was on hand this week, meeting with local family business owners and CEOs, offering advice and lending an ear. He also lectured to U of A business students and somehow found time to trek down to Calgary for a session with family owners there.

While the financial media continues to focus almost exclusively on the affairs -- and the fiascos -- of large public companies such as Nortel, Stelco and Bombardier, Ward says there's a growing awareness that family businesses play a far bigger role in the economy than they get credit for.

"There's more attention and more coverage of family business than there used to be, partly because of the work being done at schools like the U of A," he says.

"Also, more and more professional services firms are focusing on family business. They see it as a good market, a stable, more consistent market, with businesses that don't keep getting bought and sold."

The lengthy parade of corporate scandals among major public companies has also prompted some business thinkers to wonder whether Wall Street-style capitalism is the best model for creating and sustaining wealth.

"One of the major business influences of the 20th century was Alfred Chandler's whole notion of managerial capitalism, which involved the separation of ownership and control. As a result, family companies have somehow been thought of as less efficient," says Steier.

"But now we're seeing some cracks in that model, thanks to companies like Enron. If you look at (family) firms, they tend to make decisions differently from people who are pursuing short-term rewards like stock options or buyouts. So we're seeing some people questioning whether the whole model of the widely held firm is really the way to go."

glamphier@thejournal.canwest.com