Family Business Secret to Success

CNY BizX 10/2/2012

I’ve often wondered, what is the secret to successfully running a family business and passing it down generation to generation? Is it in their DNA? Is it the rich environment that children are raised in that frequently revolves around the business? Is it the outside experiences and opportunities family members seek to run the business better with each generation?

Assuming DNA plays only a small role if any, family members must rely on one another and on non-family members to help raise the next generation to take the helm.  It starts with being raised inside the family business, with educational opportunities, leaders, mentors and great decision makers.  The next generation are being educated and mentored now more than ever.

Family members should be educated from a very young age, slowly developing skills and learning the business from the ground up.  For example, Welch Allyn, fourth generation, works very closely with their 5^th generation.  Once a year they bring the family in from all over the world for a week to have them work with previous generations.  They teach them the history, the values and how to be good stewards of the company.  This is done with communication and bonding of all generations.

The biggest secret to success that is shared repeatedly from family business experts is communication.  It seems no matter who speaks with us on various topics the underlying message is to communicate with each other.  There are countless stories about lack of even the basic of communication.  Sometimes the current generation has never even asked what the next generation sees as their vision for the future of the company.  If you start early with communicating about all aspects of the business these conversations will come easier when the succession journey begins.

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Here are many myths associated with family business:  Family Businesses are all small businesses, working for your family is asking for nothing but trouble, priorities are different in family businesses, family businesses only represent a small sector of our workforce.  Family businesses never make it past the third generation.  However the truth is that family businesses are never the same and can’t fit tidily in a box. Some are large; some are small.  Some have strong family relationships while other might have turmoil.  Some struggle and fail to make it to the third generation, while some survive over dozens of generations.  Locally we have family businesses that fit into all of these categories

Research done by Joe Abstrachan, Ph.D a respected family business expert indicates that there are 5.5 million U.S. family businesses, employing 63% of the workforce and generating 57% of our GDP.  Research and educational opportunities are available in so many forms for the development of future leaders. Executive coaching, trade industry organizations and family business centers are all successful in helping with succession and mentoring and sharing.  Central New York is the home of one of those family business centers, which hold several events a year.  Topics include Succession Planning, Family Business Governance, Conflict Management, and Engaging Family Members in the business.  You can learn more about our events at www.nyfbc.org and find us on facebook.  

Each year the New York Family Business Center  holds an annual summit which was conceived from the Welch Allyn annual education week.  This years’ summit is being held on Veterans Day, Monday, November 12, 2012 at the Lodge at Welch Allyn.  Ages 10 and up are invited to take place in a day full of education for the entire family.  The future generation (10 – 19) will learn leadership skills from Gwen Weber-McLeod, John Eberle and John Liddy.  The current generation will learn about family business governance from our presenting sponsor Wilmington Trust and have educational breakout sessions with Testone Marshall Disenza,CPA and Bond Schoneck & King, PLLC.  We all will be entertained by Yvonne Conte, coached by Gwen Weber-McCleod and enjoy a fireside chat with your peers If you are an owner/manager, spouse or child of a family business this is the place to be on Veterans Day.