How Family Businesses Can Modernise Without Losing Their Identity

Caran d’Ache has manufactured drawing and writing instruments in Geneva since 1915. Its pencils, pastels and pens are closely associated with Swiss schools, artists and professional life, while the red metal boxes and 849 ballpoint have become recognisable far beyond Switzerland. The company remains family-owned and is chaired by Carole Hubscher, representing the fourth generation involved in its leadership.

Its heritage is commercially valuable, but it also creates a demanding strategic brief. Caran d’Ache operates in categories transformed by digital communication and exposed to international competitors with substantially lower production costs. It must modernise its products, manufacturing and distribution without weakening the Swiss-made identity that allows it to compete on something other than price.

The company’s planned move from its long-standing site in Thônex to a new manufacture in Bernex makes that tension unusually visible. A historic production environment is being replaced by premises intended to improve efficiency, working conditions, collaboration and environmental performance. The machinery, processes and physical setting may change, while production remains rooted in Geneva and the underlying promise of craftsmanship, quality and technical competence is preserved.

This is the distinction many family businesses struggle to make. They understand that the company needs to evolve, yet inherited practices can become entangled with identity. A production method, reporting line, product range or approval process may be defended as part of the legacy even when it merely reflects the circumstances of an earlier generation.

Modernisation becomes safer once the family can state precisely what must remain and what should remain open to change.

The legacy is rarely the operating model

A family business may describe its legacy in broad terms: quality, independence, responsibility, craftsmanship or a commitment to employees and clients. Those principles matter, but they are not yet specific enough to guide difficult decisions.

At Caran d’Ache, the identity rests partly on Geneva manufacturing, expertise in colour, technical precision and products designed to remain useful and desirable over long periods. Some pencils pass through dozens of production stages, several completed by hand. Specialist skills such as polishing, lacquering and engraving cannot be reproduced simply by purchasing new machinery. They depend on accumulated experience and the transmission of knowledge among employees.

These are genuine identity assets. They support the product, justify its positioning and distinguish the company from manufacturers competing primarily through scale and cost.

The location of a particular machine, the arrangement of the factory floor or a procedure introduced decades ago may be less fundamental. Preserving Swiss manufacturing does not require preserving every historical production method. Protecting craftsmanship does not rule out automation where it improves consistency, safety or efficiency. Maintaining family control does not mean that family members should approve every operational decision.

The distinction may appear obvious from outside. Within the company, it is emotionally and politically difficult. Long-standing practices often carry memories of the relatives who introduced them. Changing the practice can appear to question their judgement, even when the economic and technological environment has altered completely.

A useful test is whether clients would notice the loss of an inherited practice—and whether that loss would change why they value the company. Clients may care deeply that a product is made in Switzerland to a high standard. They are less likely to care whether the internal purchasing process or organisational chart resembles the one used 30 years ago.

Tradition creates value only when it performs a function

Tradition is commercially useful when it strengthens trust, quality, differentiation or loyalty. It becomes a burden when the family preserves it without being able to explain what it contributes.

Caran d’Ache’s continued production in Geneva involves costs that many competitors avoid by manufacturing elsewhere. Retaining it nevertheless reinforces the company’s positioning and protects know-how developed over generations. Swiss production is not retained merely because it is old; it performs a strategic function.

Other family companies need to make the same assessment without assuming that every tradition will pass the test. A local production site may embody craftsmanship and provide control over quality, or it may be an inefficient facility whose sentimental importance has never been separated from its operational value. A long-standing product may represent the essence of the brand, or it may absorb investment while serving a declining market. Personal service may distinguish the company, while the manual administration supporting it adds no value for the client.

The family should ask what the tradition protects, who values it and whether there is another way to preserve the same benefit. This shifts the discussion away from a simple conflict between modernisers and traditionalists.

A production process can be updated while the quality standard remains intact. A digital client platform can be introduced without removing personal advice. A new distribution model can extend the company’s reach while retaining local manufacturing. The most successful changes often preserve the underlying promise more effectively than the inherited method could.

Modernisation should begin before decline makes it unavoidable

Family companies often postpone significant change because continuity has worked well for a long time. Stable ownership, established client relationships and patient capital can soften the immediate consequences of an outdated operating model. The company may remain profitable enough to avoid difficult arguments even as its position gradually weakens.

By the time a crisis creates agreement, the family has fewer options. Investment may have been delayed, specialist employees may be harder to recruit and competitors may already have established stronger technology or distribution. What could have been managed as a deliberate transition must then be handled as a recovery.

Caran d’Ache’s investment in a new manufacturing site illustrates a more useful approach. Moving a production operation built around specialist processes is complex and expensive. It affects employees, equipment, supply chains and the physical environment in which knowledge has accumulated. Yet a company committed to manufacturing in Geneva cannot treat its current premises as permanent simply because they are part of its history. The facilities must be capable of supporting the next phase of that commitment.

Family owners are often well placed to make such investments because they can take a longer view than companies judged predominantly through quarterly performance. That advantage is lost when long-term ownership becomes an argument for delaying decisions rather than making them.

Patient capital should allow the company to modernise before urgency dictates the terms.

Successors need room to reinterpret the inheritance

Succession is often discussed as a transfer of shares and executive responsibility. The more delicate transfer concerns permission: what the next generation is authorised to change once it becomes accountable for the company’s future.

A successor who is expected to preserve every major decision of the previous generation has not inherited leadership. They have inherited responsibility without strategic discretion.

The outgoing generation may intend to protect the company from unnecessary disruption. Its experience can also reveal risks that enthusiastic successors underestimate. Yet unrestricted veto power can leave the next generation unable to respond to new competitors, technologies and client behaviour. Decisions are delayed until the senior generation agrees, even when the successors will ultimately live with the consequences.

This is especially difficult when the proposed change touches a visible symbol of family history: a factory, flagship property, product name, headquarters or long-standing partnership. The successor must then demonstrate respect for the past before the commercial proposal is even considered.

A stronger process evaluates the change against previously agreed principles. Does it weaken product quality? Does it reduce the company’s independence? Does it place important know-how at risk? Does it damage the trust of employees or clients? Does it alter the reason the family wants to own the business?

Once the protected principles are clear, successors can change the means through which they are delivered. The family no longer has to debate every proposal as a referendum on loyalty.

Ownership should protect identity without managing every detail

Family ownership and family management are not interchangeable. A family can exercise meaningful control through the board, capital allocation and the appointment of leadership without intervening in every operational decision.

The owners should determine the company’s purpose, risk tolerance and long-term expectations. They may reserve authority over changes in ownership, major acquisitions, substantial borrowing, relocation of core activities or decisions that could materially alter the brand. These are legitimate ownership questions because they affect the nature and continuity of the business.

Management needs freedom over product development, recruitment, technology, pricing, distribution and day-to-day investment within an approved strategy. Requiring family approval for these decisions can make the organisation slower while leaving accountability unclear.

This separation becomes more important as the family expands. A company controlled by one active owner may operate through direct conversations. A fourth- or fifth-generation business may include shareholders with different levels of involvement, expertise and attachment to the company. Informal influence then becomes difficult to reconcile with professional management.

Clear governance does not distance the family from the business. It gives family involvement a legitimate form. Owners know which decisions belong to them, directors know what they are expected to protect and executives can act without constantly interpreting private family preferences.

Independent challenge can protect the legacy

Arguments about modernisation become less personal when the board includes people able to test both sides. Independent directors can assess whether management is using change as a substitute for strategy, while also questioning traditions that no longer create value.

Their role is particularly important in a family business because internal debate rarely begins from equal positions. A senior family member may carry decades of authority. A successor may be reluctant to challenge a parent or uncle openly. A non-family executive may understand that a proposal is commercially necessary but fear appearing insensitive to the company’s history.

Independent directors can ask what evidence supports the proposed investment, what alternatives were considered and which elements of the company’s identity would be affected. They can also insist that the family define terms such as heritage, quality and independence rather than using them as broad objections to change.

This form of challenge protects continuity more effectively than automatic agreement. A family business does not become safer because difficult assumptions remain unspoken.

Employees carry part of the identity

Family owners sometimes treat legacy as something held by the shareholders, but much of it resides with employees. Technical knowledge, client relationships and standards of execution may have developed over decades among people who do not belong to the family.

Modernisation can damage the company when it disregards this institutional memory. A new facility, technology platform or management system may be strategically sound and still fail if specialist employees are not involved in the transition. The risk is particularly acute where craftsmanship depends on tacit knowledge that cannot be fully captured in manuals.

Preserving identity therefore requires more than protecting a name or production location. The family must understand which skills are scarce, how they are transferred and whether the new operating model gives employees the conditions to maintain them.

At the same time, loyalty to employees cannot mean avoiding every change that affects roles. The more durable obligation is to communicate early, invest in capability and manage transitions with the same long-term responsibility the family claims in other areas.

The brand must remain recognisable without becoming static

Caran d’Ache demonstrates how a company can preserve familiar products while continuing to develop new colours, materials, collaborations and uses. The physical act of writing or drawing may appear exposed to digital substitution, yet the products also occupy emotional, educational, artistic and luxury categories that cannot be reduced to functional necessity.

This offers a broader lesson. A family company should not define its market too narrowly around the original use of its product. It should understand the deeper reason clients continue to buy.

A pen may be a writing tool, a design object, a gift or a marker of an important occasion. A traditional hotel may provide accommodation, but its value may lie in atmosphere and personal recognition. A manufacturer may sell an industrial component while clients remain because of engineering support accumulated over decades.

Modernisation can then be directed towards the enduring client value rather than the historical product definition. The company remains recognisable because the relationship it offers is consistent, even as formats, channels and operating methods change.

Identity should provide direction, not instructions

Family businesses often fear two outcomes. One is that resistance to change will make the company irrelevant. The other is that professionalisation will remove the qualities that made it distinctive.

Both risks are real, but neither is avoided by preserving the company exactly as it was inherited.

The experience of Caran d’Ache suggests a more disciplined approach. The company can move to a new factory while remaining rooted in Geneva. It can improve production infrastructure while protecting specialist craftsmanship. It can develop contemporary products and distribution without abandoning the Swiss-made promise built over more than a century.

The family’s responsibility is to identify which commitments define the business and then give management sufficient freedom to uphold them under new conditions. Legacy provides direction; it cannot provide a permanent operating manual.

Modernisation does not begin with asking what should be discarded. It begins with deciding what the company must still be known for in another generation. Once that has been defined clearly, change becomes less threatening and continuity becomes more credible.