Family
Business Magazine E-Newsletter
January
2, 2007
Contents
1.
Business Week names Arcelor
Mittal as 'best family-run business.'
2.
Owner's granddaughter poised to take over NFL's Saints.
3.
Wharton professor: Research has debunked myths about entrepreneurs.
4.
Protect your company from big financial losses.
5.
Sharing business information with family members.
1. Business Week names Arcelor Mittal
as 'best family-run business.' In its "Best and Worst of
2006" issue, Business Week
named Arcelor Mittal as "best family-run business." The company was
formed when family-owned Mittal Steel acquired Luxembourg-based
Arcelor, the world's No. 2. steelmaker, in July. The new company's
first CEO was Arcelor executive Roland Junck, but Lakshmi N. Mittal took the helm in November. "The Mittal family, which has 43.5% of Arcelor Mittal, is
once again firmly in control," Business
Week reported, noting that Mittal's son Aditya is chief
financial officer. "It's hard to argue that such family control is a
bad thing when you look at Mittal's track record," the article said.
"In less than three decades he has built a global steel empire from
scratch and made himself a fortune of more than $20 billion.... London
broker Cazenove forecasts that Arcelor Mittal will earn $11.6 billion
in pretax profits [in 2006], on revenues of $82.7 billion."
(Source: Business Week, Dec.
18, 2006.)
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2. Owner's
granddaughter poised to take over NFL's Saints. The bond
between 29-year-old Rita Benson LeBlanc and her grandfather,
78-year-old Tom Benson, "is as crucial to the future of the New Orleans
Saints as the connection between Drew Brees and Reggie Bush," according
to an article in the New York Times.
"Benson LeBlanc is already listed as the club's owner/executive vice
president, the most obvious signal that she will inherit the franchise
from her grandfather." The National Football League, the report noted,
"includes only a handful of prominent female executives, and none is as
young as Benson LeBlanc." Tom Benson, the Times reported, is "[a]lternately
viewed as a savior, a cheapskate, a mercenary and a savoir again"
because he has considered and rejected plans to move the team out of
New Orleans. He recognized that his granddaughter, who is credited with
locating displaced season-ticket holders after Hurricane Katrina and
supporting the proposal to lower ticket prices, "could help improve the
image of the organization -- and the family name," according to the
article. (Source: New York
Times, Dec. 21, 2006.)
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3. Wharton professor: Research has
debunked myths about entrepreneurs. Academic research has
found much of the conventional wisdom about entrepreneurs to be untrue,
according to Raffi Amit, academic director of the Wharton School's
Goergen Entrepreneurial Management Programs at the University of
Pennsylvania. According to a report in the school's online publication,
Knowledge@Wharton, Amit told
the 2006 Wharton Entrepreneurship Conference, "There's a myth that
entrepreneurs have special traits that distinguish them from other
people. But research shows no unique characteristics. There's a myth
that entrepreneurs are risk takers. But research has shown that they
try to manage risk. They outsource it where they can. And there's a
myth that entrepreneurs have some sort of secret method that they can
apply to venture after venture. But many second-time entrepreneurs
fail." (Source: Knowledge@Wharton,
Dec. 13, 2006.)
For tips on
teaching next-generation family business members how to manage risk,
see "Young leaders must learn to take intelligent risks," by Leon Danco
in The Family Business Mentoring
Handbook. Learn more about the book and view the table of
contents here.
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4. Protect your company from big
financial losses. In many cases, a family business
constitutes the vast majority of the family's wealth, and it may have
taken as much as 25 to 50 years to build the company to that level of
profitability, writes attorney Joe Goodman in The Family Business Policies &
Procedures Handbook. "Yet just one unfortunate event can reduce
the value of the business to fire-sale liquidation levels," Goodman
writes in a handbook article titled "Diversify your holdings to protect
your wealth." In the article, Goodman offers seven guidelines on
protecting your wealth by diversification. Here are three of them:
- Do not
allow a single product, or a single customer, to represent 50% or more
of your family's business operations.
- Adopt a
strategic plan to redirect business growth into unrelated business or
investment endeavors.
- Extract
cash from the business through a cash infusion from a venture capital
firm.
To read the
whole article, plus advice on succession, leadership development,
governance, compensation, strategic planning and more, see The Family Business Policies &
Procedures Handbook. Learn more about the book and view the
table of contents here.
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5. Sharing business information with
family members. "For many members of entrepreneurial
families, the family business is a source of joy and a sense of
belonging," writes Jan Sten, a family business adviser and faculty
member at the Swedish School of Economics and Business Administration
in Helsinki, Finland, in the newly published issue of Family Business Magazine. "But in
some families, relatives who are not involved in company management
feel excluded from the inner circle. Family members form opinions and
make decisions based on the information provided to them about the
company. If information is not flowing properly, some shareholders may
be hampered in their decision making, and this may cause tension within
the business family." Sten recommends that the following questions be
considered in developing a strategy for dissemination of information to
family members:
- Which
family members need to be informed about the company?
- What kind
of information should be shared with family members?
- How
should family members be informed about business activities?
- Where
should family business information be stored?
- Who is
responsible for information flow?
Subscribers to
the print edition of Family Business
Magazine can read the whole article, "Managing information flow among
your family members," free of charge in our online Articles Library.
Non-subscribers may download the article for $10. Visit our website for
subscription information.
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New
Year's Special -- Exclusively for Family
Business Magazine E-Newsletter Subscribers!
What better way
to kick off 2007 than with a special sale on the Family Business Handbook Series,
exclusively for subscribers of this e-newsletter? For the month of
January, each handbook is available to you at a 25% discount -- $71.25
(regular price: $95), plus postage and handling.
In order to
take advantage of this special offer, check out our Handbook Library
here.
BUT PLEASE
DON'T USE THE ONLINE ORDER FORM! (That form lists our regular pricing.)
After you've
decided which handbooks you'd like to order, simply e-mail Barbara
Wenger at bwenger@familybusinessmagazine.com
with the titles. Barbara will work with you on billing and shipping.
We hope this
special discount will allow you to add to your growing collection of Family Business Handbooks.
Happy New Year
from the team at Family Business Magazine!
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