The Transformation of Family-Owned Enterprises into Design-Intensive Firms

This study examines how family-led small and medium-sized enterprises (SMEs) with little or no design experience are transforming into design-intensive firms. Extant research allows us to understand the distinct capabilities of design-intensive firms. This study defines the capabilities of new design leadership, including the unique capabilities of design-intensive firms, to assist SMEs in their transformation to design-intensive firms. Furthermore, this study empirically evaluates the influence of individual family CEOs’ characteristics and industrial structural factors on the design leadership capabilities in family-led SMEs. The findings show that the efficiency of developing design leadership capabilities is influenced by the family CEO’s awareness of traditional design identity, and designers assist family CEOs in building a new network with interpreters and managing their knowledge of sociocultural models. A family CEO’s exploitation of traditional design identity and designers’ exploration of design renewal must be managed as a portfolio to transform a traditional SME into a design-intensive firm. This study has critical implications for family-led SMEs as it emphasises the importance of passing on a firm’s traditional design identity and design renewal as a portfolio to the next generation of CEOs for the firm to transform into a design-intensive firm.