29 Apr How AI and Automation Are Changing the Family Business Landscape
By: Mike Schmitt, The Rubra Group, LLC
Artificial Intelligence (AI) is evolving faster than many anticipated, and its impact is beginning to reshape how family businesses operate, make decisions, and engage both customers and employees. While AI is often discussed in the context of large tech firms or venture-backed startups, its relevance for family-owned enterprises is becoming increasingly clear. AI is not a passing trend, it is a transformative force that, when applied thoughtfully, can enhance productivity, strengthen strategic decision-making, and safeguard the values that define a family business.
For most family businesses, the focus has traditionally been on stability, trust, and long-term relationships. These values remain essential. But staying competitive in today’s rapidly evolving economy also requires adaptability. AI offers a unique opportunity for family firms to enhance efficiency without sacrificing the personal touch and mission-driven culture that often set them apart.
One of the most powerful uses of AI is in research and financial analysis. Today’s AI tools can rapidly synthesize vast amounts of data, industry trends, market signals, customer feedback, and financial metrics, to uncover actionable insights. This accelerates strategic planning cycles and equips leaders with a clearer view of their company’s performance and opportunities for growth. For example, forecasting models powered by AI can help businesses anticipate demand fluctuations, identify inefficiencies, and reduce waste. These capabilities empower families to make informed, proactive decisions rather than reacting to challenges as they arise.
Last week we attended a seminar led by Ross Hartman from Kingo AI. What I walked away with was that our companies may seek to establish a new “C-Suite” position of Chief AI Officer, or something similar. This would be different that the CIO or CFO roles. This is a real opportunity to use the new technology to drive productivity, risk reduction, and a better client experience. I know that many of us might be a little skeptical or even a little intimidated by what we read or hear about AI, we would recommend that you try it out. Do simple things like have it help you proof read an email and things like that. Pretty soon you might find yourself dropping the last three years of financials into it and seeing what new perspective the AI agent might have on your performance and trends.
In a recent case from the UK, Radfield Home Care, a family-run franchise, integrated AI tools like ChatGPT into their marketing and HR processes. This integration allowed the business to streamline administrative tasks, reduce operational overhead, and give their staff more time to focus on client care. Their experience underscores a key advantage of AI: it isn’t here to replace people, but to enhance their productivity and capacity to do meaningful work.
AI can also help family businesses maintain and even elevate customer experiences. With customer expectations rising, personalization has become a critical differentiator. AI-driven tools can analyze behavior patterns to tailor product recommendations, personalize communications, and automate service responses. This level of customization, once reserved for the biggest players, is now accessible to businesses of all sizes, including local family enterprises. It allows businesses to treat every customer like a long-time family friend, even as they scale.
Employee engagement, another hallmark of successful family businesses, also stands to benefit from AI integration. From AI-enhanced onboarding to career development recommendations based on performance data, automation can ensure employees receive the support and growth opportunities they need, without requiring the business to build out a large HR team. AI-driven tools can also monitor team sentiment through internal surveys and communication patterns, flagging potential issues early and allowing leaders to respond before small problems become big ones.
Still, AI must be implemented with care. The risk of undermining trust—among employees, customers, or family shareholders—can be high if the process lacks transparency. That’s why it’s essential that AI adoption be anchored in the family’s core values and guided by clear governance. Before automating any part of the business, families should ask: Will this technology reflect and reinforce who we are? Will it support our mission, or distract from it?
For family enterprises looking to begin their AI journey, the best approach is to start small. Pilot programs in areas like customer service, logistics, or marketing analytics allow the business to test the waters and build internal confidence. These pilots can provide quick wins and clear ROI without overwhelming existing systems or teams.
Another critical consideration is education. Investing in AI training, especially for next-generation leaders, ensures the family stays ahead of the curve. It also opens opportunities for younger family members who might not want to follow traditional operational roles but are passionate about tech, data, or innovation. This fosters continuity while allowing the family enterprise to evolve.
As AI adoption becomes more widespread, it will increasingly be a marker of long-term competitiveness. According to recent research, only about 13% of family firms currently use AI, yet those that do report significant gains in efficiency and innovation. For family businesses, this presents both a warning and an opportunity. The longer the wait, the harder it may be to catch up, but those who move now can seize the moment to lead.
Family businesses have always adapted to change, from industrial revolutions to global financial shifts, and the AI era is no different. What makes family enterprises unique is their ability to integrate change without losing their soul. AI should be viewed not as a threat, but as a partner in this evolution.
When done right, AI becomes more than a tool; it becomes a way to uphold the family’s legacy, ensuring it thrives in a modern context. The future belongs to those who can preserve tradition while embracing innovation, and AI may be one of the most powerful allies in that pursuit.
If you have any thoughts on this and would like to have a conversation about how some families are integrating the use of AI tools into their enterprises, we would be happy to have a conversation.
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