I recently wrote about the blurring borders between family and business and how balancing the two is a hard and complex task. In this post, however I’m going to touch the subject of blurring border from a whole different angle. For some people, work and family are two inseparable spheres. They wake up every morning with their business partner and celebrate thanksgiving with their company’s board of director. They own a family business.
Family owned businesses face all the challenges regular small businesses endure and then some. First and for most, emotions are much more intense when you work with your relatives and sometimes they interfere with business decisions. Also, family businesses are usually less formal. That could lead to a less defined business strategy, loose policies and training programs and role confusion between family members working in the business. They face conflicts as relatives see the business from different perspectives since not all family members are involved in the business on a daily basis. Some family members, who are engaged in the daily operations of the business, are more likely to be concerned about production, sales figures and personnel matters. Others, who are silent partners, are likely to judge capital expenditures, growth and other critical matters primarily by dollar signs. Obviously, there is potential for disagreements but despite all that, some family businesses, small or large, manage to stay around and succeed for generations.
I recently read on Inc. Magazine an interview with a few family businesses owners who’ve been around for five generations. No doubt, there is something special about them. They manage to develop, reinvent themselves and adapt to the changing business environment for hundreds of years and still be relevant and successful. Here are some examples:
Kevin Levi, fifth generation general manger at his family owned tobacco store in Chicago, Iwan Reis & Company, say great customer experience is their secret to success. His dad once told him ‘We only own two things. We own our inventory, and we own our reputation.’ And that saying has been lighting their way. According to Kevin they will band over backwards to keep a customer happy and sometime they will even lose money trying to please an unsatisfied customer. They trust that content customers will spread the word.
Greg Harden is fifth generation CEO at his family NY based hard wood furniture business Harden Furniture Company. Greg describes the last five years as the most challenging years their business has ever been through besides the great depression. Lower priced products have been flooding the furniture market and with technology so developed their quality has been improved dramatically. He suggests that what help their business stay at float are business policies that have been passed down to him by older generations. Their almost fanatical commitment, as he calls it, to financial conservatism has left his business with almost no debt and a big cushion of cash.
Kurt Schmidt is the fifth generation president of A.E. Schmidt Company, his family’s St. Louis based pool table manufacturing company. His family business started out designing and building pool table, and though it is still their main business, they sell everything any body could to have in a game room. According to Kurt, their success stems from enormous passion and sense of pride they have in the product they make and the joy it brings to their customers.
These three businesses have been around for almost 200 years. They have survived through two world wars, major recessions and countless technological, social and economic changes. If there is one lesson to be learned from them is that some business ethics and traditions are worth sticking to. Their business core values are true now as they were when their family business started five generations ago. Nonetheless, they are successful today because they have adapted to our modern world and have managed to stay competitive despite major changes. Carl Sagan said it best “You have to know the past to understand the present”.