In his October 4, 2015, NY Times column “Corner Office” Adam Bryant presented his interview with Gary B. Smith, CEO of the Ciena Corporation: “Gary Smith of Ciena: Build a Culture on Trust and Respect.” In it Smith shares some of his history, his early influences and his experiences as he took on his first management roles. In the beginning of his career Smith recalls, he managed people by the numbers. If they hit their numbers they were fine, and if they failed to hit them, they were not. Then, at a certain point, there came a kind “ah ha” moment that changed his thinking. From then on he viewed his role as facilitating and creating an environment that people could be successful in.

It struck me that the role of facilitating and creating an environment that will nurture the success of next generation leaders is relatively rare within family businesses.

In defense of family businesses however, it’s a role not often found in businesses of any kind. Perhaps it’s an anomaly, found in the character of particular individuals. But this role is vital for family businesses that are interested in building a multi-generational legacy.

Sounds too vague as a strategy? Smith offers a first-step towards achieving it. He stated that upon understanding his role of facilitating others’ success, he learned to listen more than he talked– a working axiom for success in any kind of relationship.

If you have any thoughts or question about your own listening skills or those of others in your family business, contact through my website.

This is the first of three important management principles I pinpointed while reading Adam Bryant‘s interview with Gary B. Smith. I’ll share my thoughts on the second: “It’s all about people” in next week’s blog entry.

A point is reached in the life of a family-owned or closely-held business where in order to continue growing it needs to begin a process of transitioning from an owner-centric to a management-centric enterprise. This is one of the top challenges for businesses where family members maintain tight operational controls.

In order to move forward from this point new systems and procedures need to be established in areas of organizational structure, fiscal management, operations, marketing and sales, business development and even in the way a receptionist answers the phone.

I recently joined business attorney Nina Kaufman on a podcast hosted by Business Exponential.com, where we discussed this challenge and ways to meet it. Click here to listen: Scale From Owner-Centric to Management-Centric with Rick Raymond.

I would like to hear your thoughts and questions about this and other family-business challenges and concerns. Please contact me though my website.

Seth Godin recently wrote in a blog that motivators for important actions come down to either fear or dreams http://sethgodin.typepad.com/seths_blog/2015/09/dreams-and-fears.html.

Godin is writing from the perspective of how marketing is positioned. Fear and dreams are equally strong motivators in family businesses, especially during times of impending transition.

Both parents and children can experience fears of being left out, of lack of purpose, inadequacy, being rejected, not being needed, becoming powerful, supplanting a parent, loss of financial security, or dying.

Dreams focus on the future and help us see beyond our fears. The catalyst for a successful transition lies in the answers to: When your grandchildren take over, what do you want for your family and business? What do you want your children to be like? What do you want your family and business to look like? How do you want them to be standing with respect to others and within their community?

Drop me an email or give me a call if this is a concern for you in your family or business.

…or we are a buggy whip or any other product whose purpose is largely irrelevant to the needs of the current marketplace.

Family businesses, built on the vision and hard-work of their founders, may no longer be viable a generation or two later because of the inevitable changes in the external business environment. Herein lies the danger of failing to envision a future for the business apart from the founder’s dream.

Building a culture of innovation into a family business can be challenging and require multiple approaches. To meet this challenge successfully, the stakeholders must come to grips with the fact that change needs to occur in order to save both the business and the family’s legacy.

However the need for innovative change may not be obvious. Even if seen, it may be resisted by the incumbent generation. Developing a culture that continually welcomes innovation as part of your ongoing business strategy–in talent acquisition, systems development, methodology, risk taking–will strengthen your possibility for success as a multi-generational family business.

A family business has been established for many years. It has been guided to a level of maturity and success and is firmly established. For the leader of such a firm, focus now shifts from financial concerns and growing the business to an emphasis on human contact and relationships.

Instead of seeking outside professionals whose primary goal is helping the business maximize its financial wealth, older leaders of family firms seek the advice and emotional support of an inner circle of friends and relatives. Close relationships take on central importance, as do family harmony and ensuring an enduring legacy.

Understanding this shift is critical for the success of aspiring next-generation leaders and their advisors.

This past Spring my daughter completed two years teaching high-school math in the Dallas-Fort Worth area with Teach For America https://www.teachforamerica.org. She is staying on another year so she can see the first class she taught graduate. Now in her third year, she is participating in a semester-long professional-development program sponsored by Teaching Trust http://www.teachingtrust.org/.

She showed me the resource they are working with: The Speed of Trust, by Stephen M. R. Covey, whose father, Stephen R. Covey, wrote The Seven Habits of Highly Effective People.

So many family enterprise stories come to mind with trust as a factor–the good, bad and in-between. Family businesses built on strong trust among family members are going to win out over any other kind of business, time and again.

Authenticity.

In a recent posting on Tech Crunch Network Justin Rosenstein writes that Apple and Google, both having reached the pinnacle of business success, are very different companies in their business style and leadership. What they have in common though is a culture of authenticity that is the source of their success. Rosenstein writes that what all great organizations and all great leaders share is self-actualization—working in a way that’s authentic to who they are. This requires, he adds, that they deeply know who they are.

Authenticity is largely believed to be inherent in family enterprises. And nothing could be more important for any business that put its family name behind who they are and what they do. For some family enterprises authenticity may be difficult to maintain as the generations transition. But this need not be so.

Rosenstein identifies six practices that a business can undertake to achieve authenticity. The top three are:

1. Achieve clarity of purpose
2. Determine and live your values
3. Define your brand’s personality attribute

To read his article and all six practices: http://techcrunch.com/2015/08/05/the-one-thing-every-great-company-has-in-common/

This is a question that should instill a sense of pride. The entrepreneurial spirit that started the family business is both a touchstone for the family and a competitive advantage in the market place. It is a story generally built on clear values, creative problem solving, experimentation and hard work.

Regrettably, most family businesses fail by the third generation, not for want of any of these qualities, but from changes in time, place, and markets.

Family businesses that include ongoing innovation as part of their strategic planning, similar to the spirit in which the business was started by grandpa and his brothers, are ensuring their multi-generational longevity.

Quote attributed to economist and entrepreneur Paul Michael Romer https://en.wikipedia.org/wiki/Paul_Romer.

It’s natural behavior that when things are good, business is growing and we are making money, we pay less attention to costs. It’s a time when expenses can creep upwards, but don’t matter significantly. Eventually though, they may get out of hand precipitating a crisis; which is, in Romer’s view, a terrible thing to waste.

I often use the metaphor of going down a river on a raft and encountering unexpected rapids. How do you react? In the rush of adrenaline do you panic, freeze up? Or do you act to maintain control–tie down what you need and discard what you don’t; keep the front of the raft headed downstream; steer away from rocks. In this crisis your ride down the rapids can be debilitating, even disastrous. Or it can be safely negotiated, even exciting, exhilarating–an experience that leaves you stronger to meet challenges ahead.

Axiom and Challenge in Family Businesses

In discussions about successful multi-generational family businesses I frequently state what I believe to be an axiom: “each generation needs to respect the past and keep an eye on the future.” Challenges, often expressed, to achieving this ideal are a loss of perspective, and even worse, a sense of entitlement in our children–a result of giving them what we ourselves did not have–wanting them to have a better life than we did.

This is touchingly illustrated in a post (now removed) from This Blew My Mind http://www.thisblewmymind.com, shared by friend Joseph Meerbaum on his Linkedin page on June 21, 2015.

A young man went to seek an important position at a large printing company. He passed the initial interview and was going to meet the director for the final interview. The director saw his resume; it was excellent. And asked, “Have you received a scholarship for school?”

The boy replied, “No.” “It was your father who paid for your studies?” “Yes.” He replied. “Where does your father work?” “My father is a Blacksmith.” The Director asked the young man to show him his hands. The young man showed a pair of hands soft and perfect.

“Have you ever helped your parents at their job?” “Never, my parents always wanted me to study and read more books. Besides, he can do the job better than me.” The director said, “I have got a request. When you go home today, go and wash the hands of your father and then come see me tomorrow morning.”

The young man felt his chance to get the job was high. When he returned to his house he asked his father if he would allow him to wash their hands.

His father felt strange, happy, but with mixed feelings and showed their hands to his son. The young man washed his hands, little by little. It was the first time that he noticed his father’s hands were wrinkled and they had so many scars. Some bruises were so painful that his skin shuddered when he touched them.

This was the first time that the young man recognized what it meant for this pair of hands to work every day to be able to pay for his study. The bruises on the hands were the price that he paid for their education, his school activities and his future.

After cleaning his father’s hands the young man stood in silence and began to tidy and clean up the workshop. That night, father and son talked for a long time.

The next morning, the young man went to the office of the director.

The Director noticed the tears in the eyes of the young man when He asked him, “Can you tell me what you did and what you learned yesterday at your house?”

The boy replied, “I washed my father’s hands and when I finished I stayed and cleaned his workshop.”

Now I know what it is to appreciate and recognize that without my parents, I would not be who I am today. By helping my father I now realize how difficult and hard it is to do something on my own. I have come to appreciate the importance and the value in helping the family.

The director said, “This is what I look for in my people. I want to hire someone who can appreciate the help of others, a person who knows the hardship of others to do things, and a person who does not put money as his only goal in life”. “You are hired.”

A child that has been coddled, Protected and usually given him what he wants, develops a mentality of ” I have the right ‘ and will always put himself first, ignoring the efforts of their parents. If we are this type of protective parent are we really showing love or are we destroying our children?

You can give your child a big house, good food, computer classes, watch on a big screen TV. But when you’re washing the floor or painting a wall, please let him experience that too.

After eating have them wash the dishes with their brothers and sisters. It is not because you have no money to hire someone to do this it’s because you want to love them the right way. No matter how rich you are, you want them to understand. One day your hair will have gray hair, like the father of this young man.

The most important thing is that your child learns to appreciate the effort and to experience the difficulties and learn the ability to work with others to get things done.

In his article, The Re-Education of Jim Collins, published in Inc. Magazine, Bo Burlingham of Editor at Large, Inc., writes about the lessons that Jim Collins, business guru and author of such business classics as Good to Great and Built to Last, learned during his two-year appointment to West Point’s Chair for the Study of Leadership. He came away with a new understanding of leadership based on a 3-point model he observed in the West-Point culture

Collins describes the attitudes among the West-Point cadets as points of a triangle: Service– Growth–Success. To my mind, these attitudes apply as much to family businesses as they do to the careers of the cadets.

Expanding on the triangle, Collins sets forth three bullet points pertaining to building a culture of engaged leaders and a great place to work. When applied to family businesses these can be paraphrased as three questions:

• Service–What cause or purpose are we passionately dedicated to, and that we are willing to sacrifice for?
• Challenge and growth–What huge and audacious challenges do we as a family have that will push us and make us grow?
• Communal success–What can we do to reinforce the idea that we succeed only by helping others?

Ongoing Discussion at the Family Business Mastermind

The Family Business Mastermind is a peer-to-peer learning group. Participants meet monthly at the Lawrence N. Field Center for Entrepreneurship at Baruch College of the City University of New York to discuss the pressures, challenges and concerns of being part of a family business.

http://www.meetup.com/Family-Business-Mastermind-at-Baruch-College-Manhattan/

At July’s Mastermind meeting, there was discussion initiated by second and third- generation family-business members. They were seeking to define their roles within the context of the three major family business subsystems: family members, business management and ownership.

They expressed their frustration with being ignored when seeking to initiate innovations they believe to be critical to business growth. They shared a sense of “being right” about what their business needs; what they need for themselves in order to work in the family business, and what needs to be done differently to grow the business.

Ernesto J. Poza, author of Family Business, states that each generation needs to “respect the past, while keeping an eye on the future.” The Mastermind participants all expressed respect for what their parents had accomplished. They were struggling though, with how to evolve into their own leadership, perhaps like a caterpillar struggling to escape its cocoon. The takeaway here is that without the struggle the emerging moth will not have the strength to fly.

This is a conversation to be continued, as leadership needs time to develop. It is ultimately a conversation not about who or what, but about family values, future possibilities and opportunities.

Seth Godin recently wrote a blog post on a characteristic bias of human nature regarding the perception of “reasonableness.” http://sethgodin.typepad.com/seths_blog/2015/07/unreasonable.html. He pointed out that in relationships, we consistently perceive and “act as though” it’s the other person, and not ourselves, who is being unreasonable.

This situation is not infrequently seen in the interactions between members of first and second generations in family businesses. The son describes, often from a place of frustration, that the father is being unreasonable, in one way or another, in restricting his being promoted to decision-making status in the business. Their ensuing stories may be buttressed on the father’s side by perceptions of being railroaded, and on the son’s side by the feeling that his father lacks belief in his abilities.

Perceptual disconnects like these are based upon years of family interaction, ripe with ingrained habits and complex attitudes invisible within the family itself. A professional family-business advisor can reveal the complexities and misperceptions, align expectations and help develop positive governance structures within the family business.

If I were asked to recommend top-of-mind best strategies for multi-generational success in a family business, I would advocate fostering the development of next generation-talent and leadership, and instilling a values-based commitment to being a multi-generational family business.

I was speaking with a long-time acquaintance with whom I went to high school. He is a third-generation member of a family business. He mentioned that his family has an ongoing policy, starting when the family’s children become teenagers. If any of them ‘think’ they want to go into the family business, they are expected to attend the annual family-business meeting.

The teenagers sit on the side of the room. They see who are the current and future leaders. They become familiar with the family’s vision for the business. They absorb the family’s values and begin learning what is expected from family members active in the business.

Writing on family-business policies, Craig Aronoff[1] describes them as the guides for decision making and defining relationships between the family and the business. Good policies help families build skills, gain confidence, and increase their ability to face issues together. The policies should emerge from the bedrock of the family’s values, beliefs, philosophies, and principles.

Most family businesses do not survive past their third generation. The policy put in place by my high-school friend’s family has not only helped bring them securely into the third generation, but it looks good to take them into the fourth and beyond; a real-life illustration of the merits of solid family-business policies.

[1] Craig Aronoff, Joseph Astrachan, & John War. Developing Family Business Policies. Family Business Consulting Group.

Day. Night. Tides. Phases of the moon. Ever occurring seasons–spring; summer; fall, winter…

Early adulthood and exploration; establishment and settling down; mid-life transition; maturity; late adult transition; late adulthood…

Single; married; married without children; married with children; children helping out/learning the family business; launching young adults; young adults as managers in the business; take over of next generation leadership; grand-parenting; next professional phase (your next act), retirement…

Solo entrepreneurship; owner-managed firm; family partnership; sibling partnership; cousins’ consortium; family collaboration…

Start-up business; survival; growth; maturity; regeneration or decline…

We can’t avoid life’s cycles, and its easier on us and those around us when we embrace them and swim with the flow of inevitable and inescapable change.

One of the greatest keys to success in a family business is shared values about people, family, work, and money.

Some families maintain ownership of the business but have turned management over to a professional team, as has the Walton family that owns about half of  Wal-Mart. Other families such as the Toyodas and Suzukis own very little of the company that bears their name, but continue to run them.

In another type of family firm the family has grown to a place where they see their future in providing equity, education, and mentoring to younger family members for new businesses ventures. The start-up companies are often part of a holding company owned by the family along with the originating business.

One scenario I have questions about is that in which a single-generation team, such as husband and wife or siblings, have ownership and control. Does this qualify as a family business? I am leaning towards answering “no.” If you have thoughts about this I would love to hear them.

A reader recently asked, “what is a family business, anyway?” He was recognizing that businesses involving a husband and wife, or 2 brothers, as well as publically traded businesses such as Ford Corporation and privately held third-generation businesses might all be considered family businesses

In a classical family company the family exercises both ownership and control. As the firm grows however, it becomes more difficult to hang on to both majority ownership and management.

Fifteen percent ownership with two or more generations in management positions is largely considered to be the threshold for family business status. But there is no hard and fast rule.

“You see things; and you say “Why?” But I dream things that never were, and I say, “Why not?”–a quote often attributed to John F. Kennedy, who was actually remembering a line from George Bernard Shaw’s play, Back To Methuselah. It came to mind during a recent discussion about Benevolent (B) Corporations.

B Corporations are an established and relatively new type of company that uses the power of business to solve social and environmental problems. B Corporations are required to meet rigorous standards of social and environmental performance, accountability, and transparency.

Why not a “FB Corporation” intended to preserve the positive attributes, competitive advantages, benefits and legacies of family businesses, which in turn richly supports our economic and social fabric?

Some family-business owners look at their business through a lens where they see themselves offering a job to any member of the family. Others see through a lens that focuses primarily on the needs of the business.

The first view may be supportive of family relationships–but I venture to say that it may not provide the healthiest outlook for family members in the end. The second may benefit the business but may kill the family along the way.

A combined view is needed. One that takes in the responsible support of family members and includes a vision for professionalizing the business. The resulting scene shows generations of continuing strong leadership supporting a prosperous business and a prosperous family.

One means of developing this combined view is by way of your family. Begin by fostering a sense of responsibility in your young children. My friend and colleague Jeff Savlov illustrates this idea as teaching the next generation to put the sippy-cup on the counter when done with it.

In the Family Business Management class I teach for entrepreneurship majors at Baruch College, City University of New York, the discussion on women in family enterprises, always attracts an elevated level of attention.

The Baruch student body is one of the most diverse in the country. Remarkably, students from a wide range of cultural backgrounds share an appreciation for the inequality of women and men in family firms. The topic invariably draws comments from both women and men saying in essence that they were aware of the challenges for women in the work place, but never realized the unique situations of women in family businesses.

Not all gender-related differences are negative though, and some play to the unique qualities of women. From research[1] on women in family firms:

•  Because of traditional family roles women’s contribution in family firms often remains in the background
• Women frequently take on positions that support the business such as bookkeeper as well as participate in “feminine roles, such as human resources, sales support, etc.
• Women take on roles of caring for peace and harmony in the family, nurturer of the next generation leadership, and can help their children to love the family business.
• Daughters have different relationships with their father than sons do. While the father-son relationship may be steeped in competition, the father-daughter relationship is more cooperative in nature.
• The psychology and socialization skills of women, their ability to overcome manage contradiction, as well as to trust instinct and intuition, rather than analysis and rationality may suit them well to succeed in an evolving business culture.

[1] Jimenez, Rocio Martinez, Research on Women in Family Firms. Family Business Review, 2009, Vol 22, No. 53

Family businesses have an intangible asset: they are perceived as being successful, providing superior service, having a strong culture and deep industry knowledge–all which can provide competitive advantages.

Why else do family enterprises make public the claim of being a family business?

These advantages though must be earned, decision-by-decision, action-by-action and generation-by-generation.

They are the result of choice and not of happenstance. They begin with conversations within the family about what it means to them to be a multi-generational family enterprise.

When someone hears that I work with family businesses, one of the recurring problems they tell me about is that the children do not want to work in them; and I always find myself considering the origins of the issue.

In her article in the Harvard Business Review “Three Things that Actually Motivate Employees” Rosabeth Moss Kanter, Professor and Director of the Harvard University Advanced Leadership Initiative wrote that mastery, membership, and meaning are the primary work motivators (https://hbr.org/2013/10/three-things-that-actually-motivate-employees/)

Mastery and meaning play significant roles in both non-family businesses and family enterprises. It may be assumed that the third element, membership, is obvious and a given in a family business. Kanter writes, however, that membership requires “allowing the whole person to surface.”

“Allowing the whole person to surface” may be an obscure goal and an uncertain generational challenge for some family business founders whose sheer dominance and drive created the success of the family business in the first place. It is, however, critical to the next generation finding success under their own leadership.

Seth Godin recently wrote a blog post titled, “Two heads or one?”  (http://sethgodin.typepad.com/seths_blog/2015/04/two-heads-or-one.html)

The blog is based on the question of whether there is an inevitable split in a business as it grows, between the people who design products and those who market them. Godin points out the benefit of having one person successfully taking charge of both roles. He ends by saying: “There are a lot of reasons that this is quite difficult to pull off. That doesn’t mean it isn’t important.”

Though Godin was expressing a slightly different perspective, the question shows up for many family businesses as they consider succession in leadership. For example, there are two siblings or cousins both qualified to lead the business, who also bring different skills and experiences to the table. To answer the question the family must consider their goals for succession and the qualifications of each prospective successor.

It cannot be assumed that the interests, strengths, and abilities of the next generation are identical to those of the current generation of leaders, or that the attributes required to launch a business are the same as those required for growing and managing it.

It is incumbent upon both current and next generation leadership to recognize that succeeding heirs of the business need to provide a vision that rejuvenates the business and ensures that it will be competitive in the next generation.

Samuel Johnson III, former Chairman of SC Johnson, made the statement that every generation has the responsibility of bringing their own vision for the future of the business.

Imagine if when envisioning the future of my family’s business I started was buggy whips, or floppy disks. Where would that take the business? What I want to see carried forward are our values, those things that are important to us as a family. Values are the foundation upon which a vision is built. They are the enduring bedrock.

To provide perspective I often reference Joan of Arc. Her mission, her battle cry was, “to free France.” Her underlying vision; “a free France.” Her grounding value; “freedom.”

A family enterprise is a system, and one cannot look at it without taking into account the performance of its individual subsystems–the business, the ownership, and the family–for the behavior of any one part of the system will influence and be influenced by the others.

The fate of each of the subsystems is intertwined. It is necessary to understand that these strands may not be disentangled without seriously disrupting one or all parts of the system.

–adapted from Kepner, E. (1991), The Family and the Firm: A Coevolutionary Perspective. Family Business Review, 4: 445–461. doi: 10.1111/j.1741-6248.1991.00445.x

http://onlinelibrary.wiley.com/doi/10.1111/j.1741-6248.1991.00445.x/abstract

In its online “Insights and Publications Section” McKinsey & Co. recently published an article subtitled “What will it take to shift markets and companies away from a short-term way of thinking” with excerpts from “Perspectives on the long term,” a book of essays contributed by leading executives and academics. In the article, the issue of shifting from “quarterly capitalism” to longer-term thinking is called out as being “particularly essential.” http://www.mckinsey.com/Insights/Leading_in_the_21st_century/Perspectives_on_the_long_term?cid=other-eml-alt-mkq-mck-oth-1503.

Many multi-generational family businesses have proven successful in thinking long-term. Family Business Magazine has listed 100 of the world’s oldest. http://www.griequity.com/resources/industryandissues/familybusiness/oldestinworld.html

The youngest of these, Laird & Co., a New Jersey-based brandy distiller, was founded in 1780. The oldest, Kongo Gumi, is a Japanese construction company that built the Buddhist Shitennoji Temple in Korea 1400 years ago. It was founded in 578 and is in its 40^th generation.

A critical factor in this kind of success is an “intention” that the family continue to own and operate their business for many generations. A “best-practice” of this long-term thinking is often initiated by considering what the family and the business should be like when the grandchildren assume leadership.

This illustrates that what the McKinsey article states as requiring “wide-ranging shifts in both mind-set and practice” is in fact a way of thinking that has governed the operation of family-owned business for centuries…”ahead of the curve.”

While reading a recent blog post by Seth Godin, entitled “Sorry Confusion,” http://sethgodin.typepad.com/seths_blog/2015/03/sorry-confusion.html, I was reminded of a meeting with a business owner who was planning to retire. At that time he was pondering whether he should sell the business to his employees or to a third party. But internally what he was struggling with were two children who were not speaking with each other; a son-in-law working in the business who did not have the skills to actually run the business; a non-family manager who to a large degree was running the business but did not have resources to buy it. He also had grandchildren who, from his perspective, were too young to be considered for anything. His thinking and plans at that moment did not include any of his family.

One of the sorry things about this situation is opportunities being missed. By his thoughtlessness with regard to his family members and existing family dynamics–conjuring “escape plans” rather than face them–the businessman has willfully blinded himself to every possible resource, every possible talent, that one or more of his family members might contribute to bring the family business into the next generation.

The time for transition in your family business is approaching. Succession is at hand, and the new generation is poised to take the reins…

If you are anything like me, you will have thoughts, and even concerns, about what your life will be like after you relinquish control of your business and begin the process of a personal transition. You may find yourself asking “What’s next?” What role will I play going forward?”

While most of us will have many productive years following transition, for many there will be a strong sense of loss. At times we may find ourselves facing a kind of vacuum as we come to realize what we don’t have anymore.

From person to person, responses to this crisis differ. Some lament this changed relationship, expressed in statements like “it’s hard getting older.” Others embrace a more positive outlook, variously regarding “getting older” as a curiosity, an awe-inspiring process, a new challenge.

In a recent OpEd article for the New York Times, Oliver Sachs wrote about his diagnosis of terminal cancer and his perspective on the future, stating that he now wanted to live in the richest, deepest, most productive way he can. (http://www.nytimes.com/2015/02/19/opinion/oliver-sacks-on-learning-he-has-terminal-cancer.html)

Perhaps akin to being at the top of a roller coaster or setting off on a downhill ski run, letting go is difficult. Certainly there are things I have enjoyed that I can’t do anymore, but this fact does not take anything important away from who I am now.

The ending of years of leadership in the family business is also a new beginning. It is a different beginning than that of youth, and daunting in different ways. But seen in a truly justifiable positive light, this start holds an earned advantage–a worldview and wisdom gained from experience; an equanimity and balance achieved by facing both triumph and disaster and coming through. Many traditional cultures have respected and asked guidance of their elders for just these reasons.

Given the know-how and inner solidity acquired over years of effort, the personal transition of building a newly significant life as an “elder” can perhaps be seen as a truly worthy challenge.

Talking About the Family in the Context of the Family Business but Not About the Business

The dining room table in my childhood home was the place for family meetings. That’s where I learned some of “what it means” to have your own business. Undertaken in a more structured way, family meetings are the place where policies get established. It’s where family members learn about the rights and responsibilities that accompany being a business owner and part of a family business. As family businesses develop, family meetings provide the forum for delivering information to stakeholders, whether working in the family business or not, about the state of the business, its financial performance and plans for future growth.

A well-structured family meeting is worth its weight in gold; done poorly it turns to lead.

According to business exit strategist Andrew Karlen http://www.karlenstolzar.com/karlen.html, business valuation is an important place to start when thinking about transition in family business.

Passing a family business from one generation to the next, rather than through sale to a third-party does not diminish the benefit of or need for a comprehensive valuation.

Not all businesses take steps to get this done. But there are critical consequences for avoiding this important work.

A determination of value:

• Establishes your starting line and distance to the finish
• Tests your exit objectives
• Gives owners a litmus test

When you know how much value there is, you know how much you need to create to achieve your objectives. You then know where you need to concentrate your time and effort

In his white paper, Opening Pandora’s Box–10 Rules for Talking to Kids About Money, Glen Kurlander, Managing Director of Wealth Management at Morgan Stanley, advises affluent parents: “you have got to come to grips with your own values about wealth before you discuss money and wealth with your kids. https://www.morganstanley.com/wealth/wealthplanning/pdfs/talktokidsaboutmoney.pdf

Many families do a poor job of teaching their children about money and wealth. For the future of a family business, this can be devastating.

Money and wealth are not the same. Money is a medium of exchange. It’s about transactions, and is used for taking care of our needs. Wealth, on the other hand, is the net accumulation or abundance of assets. In some ways, money is about today, and wealth is about the future. Understanding both enables successful multi-generational sustainability.

It is important to help your children understand this distinction so they can develop attitudes toward money and their family’s wealth that are realistic and constructive.

The charismatic, know-what-to-do leader of a first generation family business may not be available, or be what’s needed in subsequent generations.

Leadership comes in different styles and strengths. Derek Jeter’s leadership of the NY Yankees differed in style from former Mayor Michael Bloomberg’s leadership of New York City. Both were winners.

The challenge of a first-generation leader is to recognize different leadership styles in the next generation, and what the business as well as the family will need going forward.

Seth Godin said it again–that ‘no plan’ is a plan, but one with little chance of turning out the way you want it to. It’s especially true for family businesses. http://sethgodin.typepad.com/seths_blog/2014/12/backing-into-your-future.html

Whether in a closely held business or a family business, lack of a transition or succession plan, or a buy-sell agreement, is a recipe for loss of an inheritance, a business and possibly a family as well.

Family businesses have an enduring advantage over all other kinds of enterprises, in large part because of their long-term goals, plans and commitments.

It’s the role of the current heads of family businesses to develop future family leadership, equity owners and business management that will enable their businesses to survive and thrive through generations to come. Without their leadership it will be impossible for their businesses to avoid becoming an example of the statistic that says that most family business fail by their third generation.

It is possible to be a leader in a family business and not wear the mantle of CEO. At times this is preferable.

The architect of  succession in a family business has to be the incumbent, the current head of the business. It won’t work any other way.

• Well educated and with a great living standard. Working in the family business. Making a living from the company’s profits; living from the income generated by the previous generation. The firm operates on automatic pilot; nothing is new since the founder created it.

• Don’t work in the family business or have no interest in it, but live from the firm’s profits. A firm with this successor mentality is poised for a slow process of decay. It is trapped in a vicious cycle based on an extractive model of wealth–a sure breeding ground for future family conflicts. It is difficult to break out from this specific firm/family-dynamic routine. However, there’s a possibility in the near future that one of the grandchildren may breath new life into the firm with breakthrough ideas and enthusiasm for taking risks and seizing opportunities.

Harsh perspectives? Perhaps, but true and all too common.

Alternatively….

• You have succeeded to the leadership of an enterprising family. Each generation has managed to re-create the company, re-invent it. Each has changed the direction of the company, opening up new and different terrain. Each has discovered and taken advantage of opportunities while using the resources, abilities and know-how from previous generations. The entrepreneurial genetic code of the firm is its hallmark. Each successor has challenged the status quo that sprang from the success of the previous generations, setting a fresh course with new leadership, new goals and new ambitions.

If yours is not an enterprising family, make the commitment to change the situation.

Hearing “I need to …, ” I wonder if the speaker means “I want to,” or if they are speaking in terms of a life-necessary action as in stating “I need to eat.”

The problem is that “I need to” is often based in the unrecognized interests of another, or of all of society, at the expense of our own. In this context it presents a weak, non-committal position that belies our actual goal. It often acts as a screen to hide the fact that we actually don’t want the expressed outcome. A client, expressing something he had been “needing to” for a long time, after considering the source of the felt need came to the realization that he never “wanted to.”

For me, the statement “I need to give my son or daughter more autonomy in the business,” begs the question “why do you need to?” What is the outcome you want? Is it to satisfy a subtle society pressure, or do you see a benefit for yourself, your children, or the business in doing so?

Clarity is a powerful facilitator for reaching goals. If you really don’t want to do something, you are wasting your time and that of others by pursuing it. The hard part about life is that this happens, without our quite realizing it, and it sometimes takes harsh medicine to break the momentum and turn us around.

If you have been voicing “need” to turn over responsibilities in your business to your children while not doing it, you are lying to yourself.

Most family businesses succumb to either being sold to non-family entities, or to closing their doors with the third generation. While this may be lamented, it is, at times, the best strategy for stewarding wealth across generations.

Preparing next-generation minds for leadership and innovation is a critical role of family business. Accomplishing these goals and yet selling the business, is a win.

Two critical areas for success of a family business are mission and margin. They provide the fulcrum for long-term and short-term term goals, both integral to a family business.

 Together, they are the balancing point between a family-first business–one that offers employment to all family members, and a business-first business–one that operates for the primary purpose of providing a return on investment.

‘Mission’ describes the core ingredients that define your family and family business–your fundamental reason for being. ‘Margin’ recognizes it is a requirement to be profitable–for your family, your customers, employees and suppliers–and to sustain fulfillment of your mission.

I often hear it said with conviction that the reason entrepreneur-founders of family businesses don’t turn over the business to the next generation or even institute a process for succession is because they can’t give up control.

Certainly this occurs in some situations, but it is inaccurate to apply this characterization as a general rule. Other factors may be at play. The founder may have no plans for a life after relinquishing the role in the family business, or may not have built a life outside the business. It is also possible that the founder has not adequately educated business stakeholders, such as key employees, clients, suppliers and colleagues about the transition, and consequently is concerned about the potential repercussions.

All family businesses are unique; and it is important to understand the dynamics of each individually before reaching conclusions and recommending approaches to support them.

Transitioning from one generation to the next is one of the biggest challenges in family businesses. I liken it to changing canoes in a middle of a lake. While there can be different issues at play, sometimes the challenge is that the parent can’t let go because of a felt loss of identity giving up the role they have had.

Rather than a sense of loss, Richard Rohr (https://cac.org/richard-rohr) believes letting go is the source of a renewed peace of mind. As long as you think you’ve got to fix everything, control everything, solve all the problems, explain everything, and understand everything you will never be at peace.

Unique to family businesses is that the dance of life is at hand. Simple in thought, though recognizably more difficult to achieve, your identification with the pattern of life of next generation going forth from the vantage place of having ridden on your shoulders is the beginning of letting go and peace.

Transitions in family businesses happen whether we plan for it or not. Unlike Armand Hammer who, when asked of his plans about the transition of the leadership of his firm, stated “If I die the board will decide,” we all encounter that day where we tire, get bored, or are perceived as hanging on longer than we should.

Succession does not mean giving up on life but more so, if we allow it, an acknowledging of life cycles and a grabbing on to life in a way that creates a legacy.

The architect of a family legacy and transition in the business can only be the current leadership, not their children. The head of the family must set the stage and initiate the conversations that create the legacy.

I’m taking a photography class and last night we were discussing the significance of framing–the placement of the subject in relation to other objects in the photo. It determines the success or failure of the photo.

Framing in conversations sets up the choices we make and influences them, and is critical for success in family businesses.

I’ve been having conversations with fathers and sons about their current and future roles in the business. These conversations are often framed in a zero-sum, emotionally charged context where the father may feel devalued.

The opposite is a positive-sum game, which come from a discussion of what a family can accomplish across generations, and creating a family legacy.

What would you like for the business and the family when your grandchildren are running the business and are head of the family?

Seth Godin recently wrote that framing tells us how to judge something, saying “When you make the effort to give us a hint (that something is important), we’ll often take the hint. (http://sethgodin.typepad.com/seths_blog/2014/10/put-a-frame-around-it.html)

There will be children who love the family business and those who do not

 A client told me that he was planning on giving his business to his 2 children who worked in the business, when his wife reminded him that they have 4 children. This illustrates a natural inclination to include the business as part of an equitable distribution of the estate. It’s important to remember in these situations that there is a difference between fair and equitable when it comes to succession planning. The “equitable” part takes into account that one child may be a school teacher and another an investment banker. The “fair” part comes about as the result of open and clear communication. Paraphrasing an ancient Chinese proverb: Starting this communication 20 years ago was not too early. Starting it today is not too late.

I recently had an opportunity to speak to first-generation family business owner from Brazil who asked how to decide which of his children would be the better choice to take over management of the business. I saw that he was not falling prey to the idea of primogeniture succession (the oldest assuming leadership regardless of business needs and individual abilities).

My response rested on a statement by Sam Johnson (former chairperson of S.C. Johnson & Son) that each generation needs to declare a vision for the business for themselves. If vision is a variable from generation to generation, the unchanging foundation of successful family enterprises is the values that the family and the individuals within it express through the medium of the business.

My recommendations to the Brazilian businessman were:

• That he and his family identify and discuss the values (those things that are important to them) they hold for themselves and that are important to the family in the context of the business.

• That with his children he undertake a family discussion of their five-to-ten-year vision for the business and what skills and leadership would be needed to achieve that vision.

I stressed that it is important that this conversation be a family effort. Also included should be his board of advisors or business mentors. To be done well this process may be expected to take from 6 to 24 months to complete.

The outcome should render an obvious choice and enable a smooth transition.

As you may realize, I am a fan of Seth Godin. His posting “Worthless (priceless)” rings of challenges and benefits (or perhaps the good, bad and ugly) inherent of family enterprises.

“We can transform a priceless thing into a worthless one. Mishandle it, disrespect it, break it, leave it out in the rain. The compromise of the moment, the urgency of now, the lack of a long view–it’s trivially easy to destroy things we think of as priceless.

But we can also transform the worthless into things valuable beyond measure. When we attach memories to something, it becomes worth treasuring. And when the tribe uses it to connect, we have a hard time imagining living without it.”

http://sethgodin.typepad.com/seths_blog/2014/09/worthless-priceless.html

…as though there won’t be afterwards. Sadly, I’ve heard this fear expressed all too often, and just as often the decision was made not to discuss any of the plans for the estate until after a death, so as to avoid discord. Upon hearing this, an image of an ostrich with its head in the sand leaps to mind. Aversion to conflict is a malady that can sink a family. While the legal structure of wealth transfer is the will and estate plan, the indispensible foundation is communication and trust, best built as early as possible. It’s here that a professional with expertise in family dynamics can add significant value.

Do the successful people “do what they love, or love what they do?” The former is external to who you are; the other is internal, meaning it’s a choice.

There is a parallel axiom in Zen philosophy: “Before Enlightenment chop wood carry water, after Enlightenment, chop wood carry water.” It’s a matter of finding satisfaction and taking strength from all that you do.

Because of the nature of family businesses, an attitude of “I don’t carry water” can be more prevalent than in a non-family business. It resonates with a perspective of “you give first.” We see it in world politics. Regrettable but true, as individually we have very little control over world events. But we do have control over our own thoughts and actions.

This attitude informs our reactions from time to time in all of our lives. You may be in a position in your family that you don’t like; and you may feel remorse about not having work you like. Oddly enough, the way out is to like the work you are doing. Quoting Seth Godin: “perhaps the more effective mantra for the entrepreneur, the linchpin and maker of change might be, “love what you do. If we can fall in love with serving people, creating value, solving problems, building valuable connections and doing work that matters, it makes it far more likely we’re going to do important work.” http://sethgodin.typepad.com/seths_blog/2014/08/turning-passion-on-its-head.html

Can you equate “loving what you do” with being happy? From my own experience, yes. You can choose to be happy in a less-than-ideal situation. But don’t believe me. Try it. Try it for 2 seconds, then 2 minutes, and then 2 hours. I guarantee, if you can do this for 2 seconds you can chose to be happy at any time in any situation, focusing on the value you provide others, the connections you have, and the people you serve.

Seth Godin recently asked the question “Is better possible?”. He assumed the answer was “yes” for everyone and then realized some people settled with “no.” (http://sethgodin.typepad.com/seths_blog/2014/07/is-better-possible.html).

Can there be “better” in a family from generation to generation? I think yes. Of course this begs the question as to what “better” is. I’m not, however, going to attempt to define “better” here, but rely upon the understanding that we all know it when we see it.

When speaking of a family business I would venture to say that “better” requires preparing your children to be better; and you would think there would be universal acceptance for this.

Like Godin, I too am surprised when I find situations where the opposite occurs, not so much in word but more in deed. My father once told me he felt his parents did not want him to be better than they were. The idea of that still befuddles me. Godin sees fear as the driving force here; and I do have some rudimentary understanding of what my immigrant grandparents may have been feeling.

The wonderful thing about the family enterprise is the potential for a creating a family legacy. The big questions I believe are:

• How do I create better human beings?
• What are the aspirations and strengths of others in my family that I can nurture and support?
• How does my family business value others?
• What does it mean to be multi-generational?

These questions are challenging to be sure, but they are of paramount importance. The business world is not an island. The family enterprise that meets these challenges, that answers “yes, better is possible” can become a powerful force for “better” within its own walls and far beyond.

While I have a great deal of respect for attorneys and financial advisors who are working with family businesses, one area where I see them consistently stop short in their work is in viewing the will and estate plan as instruments for resolving discord within the family.

Wills and estate plans provide the structure for succession. But they do not address family issues such as long-term sibling rivalries. Rather, they may even become the flash points for buried unrest.

Trust and communication however, provide a foundation for mutigenerational success, and these come from another set of skills.

A number of exit styles are found in family business leaders. Here are three that people may struggle with:

The Monarch

By definition the Monarch is the head of a family business that stays until forced out. Monarchs cannot stand the thought of handing control over the business they created to someone else, and usually will take the leadership position with them to the grave. Because of an inherent autocratic leadership style, once a Monarch dies, chaos generally follows. A successor is never properly trained because Monarchs feel that no one can be as good as they are.

The Ambassador

This style of leader helps the next generation learn the business first-hand and then eventually manage it. The ambassador then holds onto or assumes diplomatic or representational duties on behalf of the corporation, becoming a spokesman for the business and the new leadership after retiring from the top management position.

The Transition Czar

The Czar is a leader who helps the next generation through the whole transition process, and will do whatever it takes to get them prepared for the job. After Transition Czars retire they become coaches for the next generation. The Czar knows how to teach the leadership of the family and that of the business to maintain balance and harmony between them.

Who are you struggling with within? The Monarch, the Ambassador the Czar? Who are you?

Seth Godin recently wrote a post entitled, “Most Likely to Succeed,” and then stated that “what we are most likely to do is up to us, or otherwise most likely be invisible.” Is your family business most likely to:

• Create increasing wealth with each generation
• Evolve as the market place demands
• Have a culture of innovation that allows new family business enterprises past the original business model
• Support children in their unique skills and career desires whether they go into the family business or not.
• Pass on leadership based on skills and business needs, rather than age or gender
• Avoid the use of experts and advisory boards
• Be a center of influence
• Be recognized for the positive qualities attributed to family businesses
• Create a network of intergenerational family members supporting each other while building a legacy across multiple business enterprises
• Become invisible after 3 generations

Trying to run your business and at the same time handle the structures and systems to make it grow? When you are just beginning you may not have the resources to hire expertise, but when you reach a certain size you can’t afford to do the work of your business effectively and get continued profitable growth. There’s a tipping point where what got you here will no longer get you there. You run out of energy, bandwidth and know-how. The smart money knows they cannot do it alone and seeks complementary outside skills before the crisis develops.

I often hear of an established firm that wants to grow without utilizing outside expertise. If that is the advice you are getting no wonder you are wary of outside consultants.

Earlier this month I led a panel discussion for the NYC Family Business /Family Firm Institute Study Group. The focus of the panel was on the experiences of women and daughters in family businesses.

The three women panelists are currently working in their families’ businesses. One is “first generation” (the founding generation) and two are daughters of the founders (“second generation”). Prior to the panel discussion all participants were sent an article that summarized research on women and daughters in family businesses. It contained significant data identifying challenges these women face.  For example, lack of visibility–their opinions are not asked for, when offered they are not heard, they are excluded from meetings. The article describes the incidence of women being pushed into stereotypical gender roles such as secretarial, administrative and other types of support staff rather than leadership positions, and the prevalence of “oldest-son syndrome” as a basis for succession.

However in equal measure the article included case studies of women having positive career experiences. These women were given a great deal of responsibility and respect.

All the panelist expressed having enjoyed positive aspects of working within their families’ businesses. In the discussion that followed they spoke about the background and underlying circumstances that were instrumental in bringing this about. They spoke about the support of both male and female role models—of mothers who were competent on their own and of fathers who confidently sought out and accepted input from their wives and their children with regard to running the business.

One panelist spoke of her experience growing up and participating in the family business. She recalled going on a buying trip with her dad when she was 12 years old, and his seeking her opinion on wholesale purchases. She added that this experience and training began the development of her leadership role.

When asked how they handle the perception that they have their jobs because they are “daddy’s little girl,” one of the panelists responded that she expects this stereotypical view may always be there, but what is most important is how she thinks of herself and the energy that she gives off.

Asked about how they see their own roles in the family business—as having a job, as growing the business or as experiencing a co-evolutionary process wherein they personally and the business are evolving together (three perspectives identified by the author of the article), the panelists resoundingly stated the importance of ongoing, co-evolutionary growth as individuals and leaders.

A word that is new to me was brought up in the course of the discussion—”heteronormativity.” This term refers to “the belief that people fall into distinct and complementary genders (man and woman) with natural roles in life.” ¹ It was suggested that there is less and less of heteronormativity in our society. There was a consensus, however, that women are better than men at multi-tasking. This is due, perhaps, to men traditionally having needed to focus on hunter/gatherer roles while women traditionally managed many roles simultaneously.

The panelists were asked if they thought that businesses will benefit from incorporating the natural abilities of women in leadership roles. Would businesses that have women in leadership roles enjoy a competitive advantage because of the particular strengths women bring to the table, notably flexibility and capacity for understanding and handling complex relationships.

The consensus of opinion among the panelists was “yes.” One participant commented that with leadership by women like these panelists, the future looks good.

_______________

¹ http://en.wikipedia.org/wiki/Heteronormativity

While there are exceptions to the frequent-enough-to-be-prevailing practice of overlooking daughters in family businesses, women have traditionally had to overcome significant obstacles to achieve leadership positions . It’s not uncommon for an older and even more qualified daughter to be passed over for a younger male sibling. In some cultures daughters do not participate in the family’s transfer of wealth across generations, and it’s often expected that the daughter to be taken care of by her husband.

On the plus side, daughters are often seen as more cooperative in their relationship with their father than sons who can have more competitive dispositions. And where there are good relationships between fathers and daughters in a family business, the mother may experience a loss of her daughter to the husband, as the father’s and daughter’s conversations about business get carried into the home.

It’s been voiced that women do not have the dexterity to manage the complexities of business. We can see the myth in this, however, as we recognize that women are frequently shouldering and balancing responsibilities for childcare and domestic chores while providing emotional and financial support single-handedly. Anne Francis wrote in her seminal work, The Daughter Also Rises, “women often find a direct correlation between domestic life and the situations they face in business – if you can figure out whether the four year old or the six year old gets the last piece of candy, you can negotiate any contract in the world.”

I am of the persuasion that we will all benefit by stepping back from stereotypes and looking at the strengths, which women can bring to relationships in business – as all business is dependent on relationships.

In my Family Business Management class at Baruch we are now in the process of scheduling a family meeting. One of the most important practices of any successful multi-generational family enterprise, family meetings are a form of governance. They are forums for the discussion and establishment of critical procedures and policies for managing organizational processes and relationships.

Whether a family enterprise is in its second or fifth or thirtieth generation, family members must come together to discuss the unique needs and challenges that face individuals within each of the three family business subsystems, i.e. the family, the business, and the ownership of the business.

These meetings are all about the family talking about the family in the context of the business, but not about the business per se. The conversations may include working out policies for bringing the next generation into the business. For example, the policy might require that next generation members work somewhere else after completing school, and prove themselves there before returning to the family business. Other conversations may be about the children’s career interests or how the demands of the business impact upon the family.

Our class will be holding a “family meeting” based on a case study of a second- generation CEO announcing his intention to retire. There has been no prior succession planning. At stake are the future of the company, the equity of the family members who have ownership in the business, and continued harmony within the family itself. Armed with a better understanding of best management practices than most family businesses have, students take on the roles of the family members in the case.

The founder of the business being discussed passed leadership to his oldest son who is now planning to retire. Ownership of the business went equally to the founder’s five children. The second oldest son of the founder is the only other second-generation sibling working in the business. Both have a third-generation son working in the business.

The roles the students will enact include all five current second-generation family members, the third generation cousins, including two contenders for CEO. There are also a fourth-generation cousins who look forward to their own leadership roles in the future, as well as the intrigue of a disenfranchised equity owner.

The outcome sought from the role play is a strategy and process for selecting the next CEO. Inherent in this is the question of who will lead the family in the next generation, and how equity will be handled as the family grows.

During the role play, students will learn to navigate the emotional challenges of leadership, family and self-interest to arrive at a solution that supports multigenerational success.

I recently had the good fortune to hear Dennis Jaffe and James Grubman, internationally known experts on family enterprises and wealth preservation, speak at an event in New York City. Participating on the panel as well was Abby Raphel, co-founder of The Redwood Initiative, an organization focused on family sustainability through wealth education.

Dr. Jaffe recently authored a research paper entitled Building a Hundred Year Family Enterprise. Too often family businesses stories are about those that don’t make it. There is more benefit though, in studying successful family enterprises. Jaffe uses the term ‘Generative Family’ to describe successful businesses that have sustained a family enterprise across generations. In his research he found seven qualities that characterize generative “enterprising” families that can trace their unity, shared core purpose and family capital over a century.

Dr. Jaffe has agreed to generously share his research paper. The seven qualities of a 100-Year Family Enterprise are listed on page 3. If you would like to receive a PDF of the paper, please send me your request by email to: info@thefamilybusinessleader.com.

There exists today a common view that the majority of family businesses do not survive beyond the third generation. But there are family firms thriving worldwide whose legacies date back for centuries. Some families are in the same business, working at the same location where they originated generations before–their products are modern classics. Others have evolved through the years, changing their venue, products and services with the times. Some remain relatively small in scope, others have seen major growth through mergers and diversification. Operating locally, or as players in the global marketplace, these businesses are the stuff of history. Real-life time machines–they have brought the past into the present, and they are building the future.

Professor William T. O’Hara, author of Centuries of Success and President Emeritus of Bryant College in Rhode Island, along with his associate Peter Mandel have recently combined and updated their two previously published lists —“America’s Oldest Family Companies” and “The World’s Oldest Foreign Family Companies.” The resulting list compiles the 100 oldest continuously family-owned firms, dating back as far as the year 578.

Their research adds a undertone to history as we generally learn it. Our view is usually focused on the big events, the golden age of Greece, the rise and fall of the Roman empire, the Middle Ages in Europe, the Renaissance, the Industrial Revolution. But a subtle thread runs through it all–family businesses begun centuries ago, family held for as many as 46 generations. These companies have outlasted nations and governments, kings and queens and mighty corporations.

The list identifies businesses that are at least 225 years old. They are working today in France, Italy, Ireland, Germany, the UK, Spain, Portugal, Switzerland, Sweden, Norway, Japan, Austria, South Africa, Mexico, Chile, in the Netherlands and in the United States.

There are builders, innkeepers, paper manufacturers, goldsmiths, vintners, shipbuilders and designers of a variety of ceramics. There are glassmakers, perfumers, bankers, bell makers, confectioners, jewelers, textile manufactures, farmers and weavers. There are distilleries, iron mongers, funeral directors, publishers and breweries. One company has been making cymbals for centuries. One makes some of the best hoists in the world. The oldest of them all is Kongo Gumi which began building Buddhist Temples in Japan more than 1,400 years ago.

Among these 100 are a few whose names resonate in our modern sensibilities as familiar as those of old friends: Waterford Wedgwood makers of crystal, china, ceramics and cookware. Kikkoman, whose soy sauce products are seen on thousands of supermarket shelves. Faber-Castell whose quality pens and pencils are indispensible for artists worldwide. And although their family name may not be a household word, their product certainly is–Farina Gegenüber, creators of Eau de Cologne.

The list is evidence that family firms have the capacity to live and grow for centuries. Through enterprise and innovation their longevity has virtually created our modern world. Given their global reach and influence their continuation may even be considered universally essential.

One of the first assignments I give to students in my Family Business class at Baruch is to write about their family history.

Today Social Scientists are finding that throughout our lives we are impacted by the experiences, behaviors, thoughts and actions of our three preceding generations.

Exploring this discovery for myself, I took some time to look three generations back into my own family’s history. I grew up in a family construction business, started by my grandfather, developed by my father, and grown by my older brother. He was the oldest sibling. He loved the business, took it over and continues to be successful in running it. I am the second son. I liked the business, worked in it while in school, but lacked the passion for it that my brother has. However I did go into business for myself and so did my two other siblings.

Looking even further back into our family legacy a noteworthy surprise awaited. I recently learned that my great-grandfather was an architect and builder in Italy. So through looking at four generations of my family’s history, a significant pattern has emerged. I now see this entrepreneurial spirit that characterizes my own generation as a product of our ancestry, learned in part from the conversation and stories heard at our dining room table each night.

Teaching at Baruch College of The City University of New York is part of my entrepreneurial activities. Baruch is one of the most ethnically diverse schools in the United States and my students come from around the world. The histories they write are they filled with dedication, perseverance, strong family values and even stories of escaping from grave danger in the course of emigrating to the United States. I remind them that such legacies are part of their families’ foundation and will to succeed.

I have found that completing this assignment unearths rich source materials that often lead to extraordinary insights. Among these are legends that shine light on what their families symbolize to them. These stories contain clues that reveal to today’s generation those values that were held by earlier generations. They inform and inspire. They act as a source of pride for the families and for their businesses that transmits itself as well to non-family employees. Equally important they can be diagnostic, providing clarity as to the condition of their business, its experiences and its family dynamics that may either strengthen or jeopardize the family and the business.

In this way students learn that where they come from strongly impacts where they are going. The knowledge gained from this assignment ideally serves as a guide to taking the right steps along the road.