Many family businesses in Malta struggle with speed, succession, and operational scaling. In a recent Harvard Business Review discussion, author Dan Wang broke down the structural engines driving modern Chinese business success. While China’s massive manufacturing landscape operates on a vastly different scale than Malta’s small economy, the underlying principles offer powerful lessons for Maltese family businesses looking to thrive in rapidly shifting markets.

1. Shift from “Core Competence” to “Market Competence”

Many traditional businesses define themselves strictly by what they make or do (e.g., “we are a hotel group” or “we are an auto distributor”).

In China, competitive businesses operate on a different premise: making money by solving immediate market demands is the core competence. During the COVID-19 pandemic, Chinese electric vehicle manufacturers like BYD and electronics giants like Foxconn retooled their assembly lines within days to produce surgical masks.

In a small, market like Malta, driven by tourism surges, foreign workforce growth, changing regulatory frameworks, change in the competition landscape and shifts in consumer patters…markets can evolve rapidly. It is therefore a mistake for family business in Malta to over rely on rigid historical identities. If your infrastructure, workforce, or distribution network can serve an adjacent emerging demand (e.g., green tech, logistics, niche food imports), pivoting fast is better than staying overly attached to legacy offerings or to the mindset “this is always what we did or how we did it”

2. Protect Your “Process Knowledge” (Tacit Expertise)

Technology isn’t just about software, machines, or written instructions. Wang highlights tacit knowledge—the unwritten, hands-on industrial and operational experience that lives in employees’ minds and hands. Top Chinese firms aggressively protect and cultivate process-level expertise.

Many family businesses in Malta very often suffer tacit knowledge loss during generational transitions or key employee turnover. A company founder may carry decades of critical operational insights in their head, leaving the second generation or non-family managers without the practical playbook. Hence the importance of documenting processes and treating operational know-how as a primary asset. Formalising and documenting operating processes and ross-training younger team members alongside veteran staff on such documented operational processes is of vital importance – rather than depending entirely on a single person’s memory.

3. Separate Business Agility from Governance

Chinese companies must navigate a highly complex background of state regulation and political realities while remaining intensely fast on the ground. They balance long-term strategic direction with quick operational pivots.

Proper corporate governance is one of the single biggest hurdles for local family businesses. Family emotion, attachments and ownership disputes often stall decision-making, leaving businesses too slow to capitalise on new opportunities. Hence the importance of building clear structural boundaries. Chinese success relies heavily on professional execution at an operation level. Hence the importance for family businesses to leverage on incentives—such as those available via the Family Business Office and Malta Enterprise—to implement formal succession plans, set up independent advisory boards, and streamline governance. This would allow to have operational teams to make fast, pragmatic decisions.

For any family business, success over the next decade will not rely on doing things “the way we’ve always done them.” By adopting pragmatic agility, deep focus on process knowledge, and hyper-adaptability, local family businesses can protect their legacy while capturing new growth opportunities.