New strategies from a new generation

When twin sisters Jenny Dinnen and Katie Rucker took over MacKenzie Corp., an analytics firm in Lake Forest, Calif., in 2013, they immediately realized that the business needed some new focus in order to remain competitive. Their father, Don Vivrette, had founded the company in 1985 and named it after his mother, Kathryn MacKenzie Vivrette.

Vivrette, now 69, got MacKenzie to the point where it could support his family. His daughters, now 40, are preparing to take it to the next level. They’ve shifted the business model from tactical market research to strategic consulting. They’ve also expanded the company’s client base beyond motorsports to new industries, including professional sports, charities and non-profits, and residential communities.

In a family business, change can be a source of friction between generations. Senior family members may be leery of tampering with a successful formula, while younger generations see new opportunities or shifting market realities their elders might be missing or ignoring.

Innovation is no longer a luxury — it’s a necessity, says Jenny Dinnen, president of sales and marketing at Mac­Kenzie Corp. “Because this company has been wildly successful for 30 years, there are people who say, ‘It’s worked, why change?’ The answer is the entire world is changing at a pace that’s mind-boggling.”

“For us, honoring the past is making sure this company is still here at least the next 30 years,” says Rucker, MacKenzie’s president of operations. “There’s so much happening in the customer and data analytics space. The industry is not what it was 30 years ago, and we had to adapt to a changing industry.”

Forging ahead

Digital Disruption Is Here. Are You Ready?

Jenny Dinnen and Katie Rucker will share their insights and experience around adopting advanced technology and refined processes to grow their family business in a webinar Tuesday, Oct. 29, 2019 at 2 p.m. ET. Register now...

The first step to successful innovation is losing the fear of failure, says Rucker. “Our dad was very calculated and risk-averse, and we were brought up and trained in that mentality,” she recalls.

As the sisters grew into leadership roles, they realized cautiousness was holding the company back. The two women, in their early to mid-30s at the time, stepped back and considered what would be the worst possible consequence of trying something new.

“The answer was, we completely bomb, go bankrupt and move on,” says Rucker. “That was a big revelation for us. We figured that if that happened, we just take the great skills we’ve learned and go get a new job. It was being OK with failure that allowed us to move forward.”

Failure didn’t even register in Marisa Sergi’s mind when she created the RedHead Wine brand as a college capstone project at age 19. Her goal back then was to present the project to the class and earn her degree.

Sergi’s parents launched L’Uva Bella Winery in Youngstown, Ohio, in 2005. Today, in addition to the wholesale wine division, the business includes an Italian bistro that also sells supplies for home winemakers. Sergi started feeding grapes into a hand crank press in her parents’ garage as a fifth-grader, so she naturally gravitated toward Cornell University’s viniculture program. The capstone project is a defining feature of the program and is required to graduate.

“You choose the topic, do research and present conclusions in what you’ve learned. Instead of doing research with yeast or microbes, I proposed something a little more creative, and was glad my professors let me lead with my passion for winemaking and creativity rather than something super-scientific,” Sergi says.

After Sergi graduated from college in 2015, her parents wanted her to work elsewhere before joining the family business. She landed a plum job at Ernest & Julio Gallo in Modesto, Calif., helping to create new products. So good was the position that her father, Frank Sergi, wanted her to stay there instead of working at L’Uva Bella.

Her mother was more receptive. “When she came up with the idea to launch RedHead, I said, ‘OK, Marisa, you’re single, you don’t have a family, you don’t have to worry about children, husband, or house; this is your time to do something like this,” says Ruth Sergi, 59. “My husband felt she should have stayed [at Gallo] a couple of years; one year was not enough.”

Suggestions from innovative NextGens

• Know your market. Identify how you can better serve customers’ needs or reach out to a new customer base. Brainstorm creative approaches.

• Overcome the fear of failure. In today’s rapidly changing marketplace, maintaining the status quo is usually riskier than innovating.

 Learn from other companies. Many NextGens seek jobs at major companies before joining the family business so they can get an insider’s view of a successful business plan. Also consider joining a peer networking organization like YPO and forming a board of directors or advisers.

 Earn buy-in from your family. Build a track record of success to establish credibility with your parents and other senior family members. Once you have proved yourself, they will be more inclined to support your innovation plan.

• Build a team that supports your strategy. Explain the strategic plan to employees, and make it clear that those who resist will need to exit.

• Approach challenges with passion. In order to succeed at breaking the mold, you must be fully committed.

Marisa Sergi knew the risks were high — “my reputation, my entire career! I resigned from a job that was very secure and something I really enjoyed, and, especially as a young female winemaker, I felt like I had the whole industry watching me. 

“People knew I was working for Gallo. They knew I was starting a label in a very crowded market, and I knew people would watch me burn or thrive. But I didn’t want to be 80 years old and one day look back on my life and have regrets that included not launching the brand.”

Now 25, Sergi is president of RedHead Wine. The brand can be found on the shelves at Walmart and Kroger stores in Ohio. In West Virginia, it’s available in Riesbeck’s Food Markets and some mom-and-pop stores. In Pennsylvania, consumers can find RedHead Wine in Sparkle markets and select mom-and-pop stores; it will also soon be available in Giant Eagle stores in the state.

Sergi knows she was fortunate to have an existing family business willing to provide seed money for the new brand’s grapes, bottles and caps. L’Uva Bella offered her the use of its winemaking equipment and sales staff. She used money she won in business incubator competitions for sales, marketing and legal expenses.

“It was definitely an adventure of a lifetime — small-town Ohio woman flies to Bentonville to pitch to the Fortune 1 company of the United States!” she recalls. “We didn’t have any experience with pitching to such a large company.”She landed her wine in Walmart by participating in the retail giant’s U.S. Manufacturing Open Call, held every June at its Bentonville, Ark., headquarters.

A business incubator organization in Youngstown, Ohio, helped Sergi plan her pitch. “I got a lot of help in preparing the presentation and to shape my expectation for the meeting,” she says. “I walked in with a very solid pitch, samples and a story, and got a yes from them to go into some of their Ohio stores.”

But with 100,000 or so new wine labels registered every year and about 5,000 wine brands readily available in the U.S. wine market, Sergi acknowledges that without her family’s network of sales reps and clients she might not have succeeded — and she’s acutely aware how quickly fortunes can change. “I don’t want Walmart being 80% of my business and then stress about them going away,” she says. “I’m making sure the business is very diverse, not overpowered by any retailer. Right now it’s under control, but that could change, and I’m very conscious of that.”

Breaking the mold
For Danny Govberg, third-generation CEO of Govberg Jewelers, innovation and disruption are synonymous. If a decades-old business needs to be flipped on its head in order to stand out, so be it.

Govberg Jewelers’ roots date back to 1916, when Albert and Samuel Govberg first opened a small jewelry store in Philadelphia. Albert alone later opened Govberg Jewelers in 1922, and his descendants, including Danny, 58, run the business today. It was a traditional family jewelry store until Danny and his brother, Jeffrey, formally entered the business the early 1980s. Like most children in jewelry families, they’d worked in the store informally all their lives. When, at age 27, Danny announced his intention to expand into luxury watches, his father, Irv, was horrified.

“There’s no money to be made in watches!” insisted Irv, who is now retired. Most jewelers shared Irv’s viewpoint; the advent of battery-powered quartz watches had put small watchmakers out of business, while global luxury brands like Rolex kept tight reins on distribution, pricing and margins.

Whether motivated by his father’s skepticism or the thrill of a challenge, Govberg embraced the category and made the store synonymous with luxury watches in Philadelphia. Today, Govberg Jewelers — which now has three brick-and-mortar locations — is so entrenched in watches that it’s making a concerted effort to add back more jewelry.

Overcoming objections
Dinnen and Rucker, Sergi and Govberg all were lucky in multiple respects: Market timing was right for their ideas, and if their parents were skeptical, they at least were not hostile.

“Mom always supported me,” Sergi says. “Dad also supported me, but he had some doubt. I received a lot of pushback from him, but here we are.”

MacKenzie’s Dinnen and Rucker faced more resistance from some longtime employees than from their father. Eventually, those employees — including a high-level manager — had to go. When the twins took over, the longest-tenured employee had been working there 30 years, and the newest had been with the company for 12 years.

“We tiptoed for a long time trying to honor them and their commitment, but that was hurting the company,” Dinnen says. “The changes we were making meant the company had evolved into something different. They were hired by Don for his company, and it’s everyone’s prerogative to say, ‘This is not what I signed up for.’ ”

The sisters worked with a transition consultant and presented the situation as a self-selecting process. “We said, ‘This is what we’re doing now, and that’s OK if it’s not for you,’ ” Dinnen says.

For Govberg, “no” means “detour.” After successfully challenging his father’s objection to watches, he came up against another wall: an industry as reluctant to enter digital commerce as Irv Govberg was to sell timepieces. Many jewelers still believe nobody will spend thousands of dollars without touching the product, but not Govberg.

“Today’s consumer is increasingly connected and empowered by social networks and digital devices, and they are no longer bound to a store’s hours of operation,” Govberg says. “They dictate how and when they want to interact with a brand.

“This is the future for luxury retail: supporting the consumer on their time, through their preferred style of communication, and with the support of a highly trained and knowledgeable guide.”

But luxury watch brands were so resistant to digital commerce that they forbade even authorized retailers like Govberg to sell online. Selling pre-owned watches was the only way around the restrictions. Luckily, the market was ripe and Govberg pounced.

Collectors often want to sell or trade in one watch to buy another. Govberg initially launched an online luxury watch resale site in 1999, but today the store’s website offers a robust selection of pre-owned luxury watches. His two G4 sons, Marc and Brian, are now in the business, along with their G4 cousin Robyn, Jeffrey’s daughter. Brian, 31, was instrumental in expanding the pre-owned watch business; Robyn, 32, is a client adviser and watch trader; and Marc, 30, is part of the company’s operations team. (Jeffrey retired in 2005.)

Meanwhile, Danny had bigger visions. He and a longtime friend who was a watch dealer in Asia both saw vast potential for a global online platform for pre-owned watches. Together with a private equity partner, they conceptualized and launched a separate global pre-owned watch site, called WatchBox, in 2017. With offices around the world, that site also offers loans against luxury watches in addition to buying and selling them.

Changing the culture
Innovation must happen inside to be successful outside. At MacKenzie Corp., Dinnen and Rucker’s ideas precipitated a shift in the company culture when they took over leadership.

“Our dad hired people very similar to himself,” says Rucker. “Jenny and I are very different from him. He’s more siloed, heads down, get the work done, but we’re more collaborative.” The twins permitted employees to work from home. They attended conferences in a variety of industries, partnered with other companies to penetrate areas that weren’t MacKenzie’s strength, expanded the client base, entered new industries and began to focus on consulting.

“Success to Dad was supporting his family and employees, and he was tremendously successful at both,” says Dinnen. “To us, it’s different. Of course, supporting family and employees is important, but how are we impactful on our client’s business? How are we helping them to succeed?”

“We’re passionate about really cool experiences,” says Rucker. “We’re thinking about how to collect information and insights to improve a customer’s experience with the [client’s] brand. That’s how our services now are in line with how things are changing. For instance, millennials are focusing on companies that are doing good in the world, and that’s something we’re authentically passionate about, so how can our services help companies focus on that and help them align with what the consumer wants from business today?”

At Govberg, innovation required blending the traditional functions of a high-end jeweler with the modern vibe of an online retailer. By necessity, its brick-and-mortar stores resemble other luxury jewelry stores, with carefully curated assortments in locked showcases. But the online division headquarters looks more like a Silicon Valley workspace, with an indoor putting green, a full kitchen and event space, TVs, and toys scattered about.

Danny Govberg may have proved that people will spend $20,000 online — but they still expect the same level of expertise and concierge treatment as they would get in a luxury jewelry store, and that had to be part of the online experience for both the Govberg and WatchBox sites.

“The decision to invest heavily in growing the online business was about addressing the interests and needs of customers with as little friction as possible,” Govberg says. “Luxury commerce is the intersection of brick-and-mortar retail and e-commerce.”

“There’s a real benefit of being a legacy company, but you don’t want to be stuck doing things the old way. Now we have the benefit of both,” says Dinnen. “Consumers’ expectations are changing, and we’re either going to get crashed underneath or we need to get going with it.”    

Hedda Schupak is a frequent contributor to Family Business. Her profile of Fee Brothers appears elsewhere in this issue.


Copyright 2019 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permission from the publisher. For reprint information, contact

From the earth to the cloud

Could anything evoke a greater sense of permanence than the phrase “carved in stone”?

A hammer and chisel are still part of a monument maker’s toolkit. Yet monument building, like virtually every other industry, has changed over the years to incorporate technological advances. Modlich Monument Company of Columbus, Ohio, founded in 1936, discovered technology offered a route to diversification.

A fruitless search for the right business software led the Modlich family to develop their own cloud-based solution, MB ProBuild. Their success with that system inspired them to create a new division of their company to market MB ProBuild to other monument makers.

Technology’s biggest impact in the monument industry has been on the production side. Lasers, CAD and other advances have allowed new designs and textures that were once impossible to create by hand, such as etching a loved one’s photo onto a tombstone.

But the industry lagged when it came to business software, especially for firms such as Modlich, which today has four locations and 15 employees, including four family members.

“The industry is generally technology-resistant,” says the firm’s fourth-generation vice president, Jonathan Modlich, 39.

“Some individuals are very progressive and will jump on technology to run their business faster and more efficiently, and others will still type up invoices or even handwrite them,” says Jonathan, who serves on the board of an industry association.

John Modlich, the second-generation leader, invested in technology back in the 1970s.

“Dad certainly taught us that you had to differentiate yourself from your competitors. You can’t do same things they were doing,” says John’s son Dan Modlich, 64, secretary-treasurer of the company. “We were one of the first companies in the industry to purchase automated equipment for the production end of the business. He taught us that you have to adapt and look at ways to save money in a labor-intensive business, and that’s kind of how we’ve looked at it. We learned by osmosis, I guess.”

MB ProBuild was created in 2009, after the Modlichs — Jonathan; his father, Dan; and his uncle Jerry, 66, the company president — found no suitable replacement for their outdated business software.

“We looked at two systems in particular, but both were a substantial investment and neither did all of what we needed, so we decided to create our own,” Jonathan says. That custom software system morphed into a new line of business.

MB ProBuild helps memorial businesses organize incoming orders, client information, invoices and other daily management information, and enables users to access that information from multiple sales locations.

On the cutting edge
Founder Linus Modlich, a skilled stonecutter, came to America from Germany in 1927 to work at a German-owned monument company in central Ohio. In 1936, at the height of the Great Depression, the owner could no longer afford to pay Linus enough. So Linus, who had owned a monument business in Germany, borrowed $1,000 from a relative and opened Franklin Monument Company, named after the county in which it was located.

Initially, Linus worked alone, also doing sporadic work for other monument companies while his wife looked after the business. By 1939, his son John had begun working in the shop after school. After graduation, John worked full-time until he was called up to serve in World War II.

In 1946, John returned home to Columbus and began his career in earnest. Linus retired in 1964 and sold the company to John, who renamed it Modlich Monument Company.

“By then, everyone knew us. We have so many siblings that we were very well known in the area,” says Jerry. He and Dan are two of nine children.

John developed and expanded the company. All nine of his children worked at least part-time at the monument company at some point in their lives, usually after school. But John didn’t want all his children to join the business permanently.

“My dad was pretty adamant about not getting too many people involved,” says Dan. John had seen family friends’ building-products company fail after the owners died and their many children, who had inherited equal shares, squabbled over money.

“Dad decided early on that wasn’t going to be the case in this business,” Dan says. “He didn’t care which kid took it over but it was only going to be a couple [of the siblings], so whoever spoke up first got it. Jerry and I are the oldest, so we gravitated toward it, and that was it.”

MB ProBuild isn’t the Modlichs’ first attempt at diversification. In 1987, John, Dan and Jerry launched Modlich Stoneworks to sell granite and marble to the building industry.

“One of our younger brothers graduated from college just then, so we asked if he wanted to be involved. He did, and was put in charge. Another brother, and then another, joined. Jerry and I were owners, along with Dad because he put money in it,” Dan says.

But the Modlichs quickly discovered there were no synergies between the two businesses, and John, Dan and Jerry sold Modlich Stoneworks to the three younger brothers. It grew into a substantial business after that. Two of the three brothers still run it; the third left only recently to relocate with his wife. Though the companies have no financial connection, they help each other out when needed. Modlich Monuments rents space for its laser machines from Modlich Stoneworks.

John retired in 1990 and sold Modlich Monuments to Jerry and Dan. Now 93, he still occasionally comes in to say hello.

A new undertaking
After Jerry and Dan bought John out, they opened a second location. In the 2000s, through acquisition, the firm grew to six locations. Two of those have since closed.

Jerry, who managed the sales force, realized very quickly it was difficult to keep track of operations across all the locations. Creating a custom platform would be expensive, but existing software programs were expensive too, and trying to adapt them might not work.

Jonathan had studied computer science and engineering in college but lacked the experience to create a software system. Luckily, family came to the rescue. Jerry’s son-in-law, Matt Scantland, is the co-founder and CEO of CoverMyMeds, which automates the process of exchanging patient health and medication information. CoverMyMeds built a custom system that did everything the Modlichs needed.

“Had there not been that family connection, we might have gone the route of adapting some Microsoft product to maybe do what we wanted it to do,” Dan says. “But because we trusted [Scantland’s] employees, we decided to take the risk of creating something that does exactly what we wanted to do.”

It turned out the Modlichs weren’t alone in their need for specialized software. “Around 2013 or 2014, a couple of people we knew in the monument industry asked how we organize all our paperwork and keep everything straight,” says Jonathan. “We showed them, and they said, ‘How can I get this?’ That’s when we realized we had something marketable to our industry and started selling it. We officially started MB ProBuild as a company in 2016.”

Although a competing system entered the market about a year and a half before MB ProBuild, the Modlichs continue to improve and update their software to win customers. MB ProBuild is cloud-based, so it’s platform-agnostic, says Jonathan. Its other big advantage is that users can adapt the system to fit their business rather than being forced to change their business to fit the software.

MB ProBuild is still essentially a side project, a small part of the overall Modlich business; it’s marginally profitable, Jonathan says. The company needed to invest in new software anyway, so any sales are a plus.

The three principals run MB ProBuild as a team. Jerry, who retired from Modlich Monuments at the end of 2018, plans to increase his involvement with the software division. Dan hopes to retire from the monument company at the end of 2019, and he too plans to remain involved with MB ProBuild. Both Jerry and Dan focus on the sales end, while Jonathan concentrates on the technical side.

After 50 years in the monument business, Jerry is looking forward to greater involvement with MB ProBuild. Although he claims he’s not technically minded, he’s the one who demonstrates the system to prospective customers.

“It’s totally different from what I’ve done the rest of my career,” he says. “It’s a lot fresher to me, interacting with other monument companies around the country. It’s not something I ever did in running our own company; we didn’t deal with other businesses, we competed against them.”

Plans for the future
The transition from the second to the third generation of Modlichs was smooth. John began transferring ownership to his sons long before he fully retired. Jerry and Dan started by buying a 48% interest in the business, split equally between them, while John retained a 52% stake. John and their mother, Helen, began wintering in Florida 10 years before his full retirement, leaving the two sons in charge for three to four months a year, although they talked to their father by phone frequently. In 1990, John retired completely and Jerry and Dan purchased the remainder of the business through a financing arrangement.

“When Dad retired, he retired,” says Dan. “He still would come in a few days a week for six or seven years, to clean up and do manual labor — mainly for something to do — but he relinquished control and didn’t try to boss anyone around.”

Jerry and Dan have always held equal shares. Before Jerry retired, they each owned 48.75% and Jonathan owned the remaining 2.5%. Ownership will be transferred from the two G3s to Jonathan via the same kind of financing arrangement John used to transfer the business to his sons.

One additional family member currently works in the business: David Van Stone (his name is a happy coincidence), who is Dan’s son-in-law and Jonathan’s brother-in-law. Van Stone has been working closely with Jerry on the sales side for about two years and is taking over that part of the business upon Jerry’s retirement. At present, he’s an employee, and whether he eventually has an ownership stake will be up to Jonathan, say Dan and Jerry. Both hope that answer will be “yes.” 

While many people may think the market for tombstones is eternal, the business is not immune to shifting trends, nor is it recession-proof. According to Dan, the “three Cs” — cremation, cemeteries and consolidation — have had a tremendous impact.

The increasing prevalence of cremations has resulted in decreased demand for monuments. New competition has come from cemeteries, which have entered the monument business. “That has impacted us unbelievably,” Dan says.

Consolidation has affected the entire funeral industry. Big conglomerates have bought up family-owned funeral homes and monument companies, although they sometimes have kept the public-facing name.

The Modlichs have been adamant about not selling. A competitor who had persistently offered to buy the family’s business one day suggested that if they wouldn’t sell, maybe they might like to buy. Jerry and Dan bought all of that firm’s locations and closed some of them over time.

About the only thing that hasn’t disrupted the industry much is e-commerce, largely because cemeteries don’t let just anyone set a tombstone, and they don’t want online competition. You can design and order a tombstone online, but without a way to install it you’re stuck with an 1,800-pound granite slab in your driveway, says Jonathan.

He is grateful to be part of a family willing to adapt to a changing marketplace and take risks to succeed. “Just watching how we operate the monument company, we’re always willing to take on risks to bring new capabilities or products to our customers,” Jonathan says. “The more time I’ve spent in this business, the more valuable I see that is, because companies that don’t are not around anymore. Without some controlled risk, you don’t have growth. Without growth, it’s hard to survive.

“Jerry and Dan taught me that taking a risk on something is not only acceptable but encouraged, assuming there is some sort of path to making it worthwhile.”    

Hedda Schupak is a business writer based in the Philadelphia area.

Copyright 2019 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permission from the publisher. For reprint information, contact

New product development drives growth, sustainability in a family firm

These days, growth is at the top of every business leader’s to-do list. For family business owners, growth carries an even higher priority because of families’ focus on future generations and the legacy they leave behind. In recent decades, acquisitions have been a popular driver of family companies’ strategy. As competition for targets across markets has tightened and prices have increased, however, expanding by acquisition alone has become less viable as a strategy.

A path to growth that’s often overlooked by family business owners is new product development. Investing the time and money to create a pipeline of products can mean the difference between an economically sustainable legacy and a business that ends with the current generation.

Launching a few new products each year can spark significant expansion over five to 10 years and typically carries a much lower financial risk than acquisitions do. But for second- or third-generation owners, this strategy can seem overwhelming. Successor-generation business leaders are generally accustomed to managing the successful entrepreneurial ventures of the founder rather than being inventors or innovators themselves. But new product development can open up significant growth opportunities and rekindle the entrepreneurial spirit your company was founded on.

In our work with privately owned businesses, we often hear that new product development is “messy, too risky and expensive.” Everyone seems to have a horror story of a new product that went bad. An objective analysis of these failures usually finds the cause was a lack of process and operating discipline.

The good news is that there are some easy steps you can take to overcome these issues and get started in product development.

Five steps to drive new product growth
1. Dedicate a cross-functional product development team. Studies show that shifting as little as 15% of your marketing and technical staff to new product development or exploration is enough to drive significant growth. This team should include a few of your most experienced and talented employees.

You must ensure the team is focused exclusively on product development efforts. Their job is to fill the pipeline with innovative ideas and conduct target market research to move the best of these ideas through the development process. It is also the team’s responsibility to reject projects that don’t meet the business strategy and the vision of the owners. They should be analyzing and refining only those products that would result in new sales to existing customers, or new sales to new markets. 

The team should report frequently to an experienced senior executive who serves as the product development leader or chairperson. The team’s progress, setbacks and challenges should all be shared with the chair, so he or she can provide oversight and support for the team as needed. 

One of the chair’s critical roles will be to step in, as needed, to protect the team’s time so it remains dedicated to product development and growth of the business. Because the team contains high performers, other departments will make demands on their time, especially in times of perceived crisis. This will be one of their biggest challenges. Insist that the other 85% of your marketing and technical teams handle such disruptions and continue your successful “business-as-usual” practices on their own.

2. Implement product development metrics. If you measure it, you have a better chance of improving it. Start with one simple metric. Studies have shown that a healthy, growing family business that leads in many of its markets will generate at least 25% of its annual sales from products launched in the last five years. Depending on your industry, this number might be somewhat higher or lower, but using this metric is a best practice among many industry leaders.

Add this metric to your quarterly and annual updates, and build it into your annual goal planning for your organization. Make sure you are measuring only those new products that are bringing in new sales from existing customers or from new markets. Don’t include products that simply get “refreshed” and replace existing sales. That activity is important and should be captured, but it does not belong in a growth metric. For example, changing the color or viscosity of an adhesive may warrant a new SKU or be considered a product line extension, but it does not constitute a new product. Be rigorous with your metric.

3. Adopt a product development framework or process. Implement a project-management technique called a phase-gate process. This process divides a project into stages or phases, separated by decision points (called “gates”).

At each gate, decisions are made by a team of senior executives who support and guide the project team. The executive decision team has the power to provide additional resources (people and money) as needed to the product development team. In order for those resources to be released, the product development team must have developed a compelling business case that fits the family business owners’ strategic growth plans. A phase-gate process ensures limited allocation of resources until the executive team fully understands and accepts the risks and potential rewards of the new product opportunity. A phase-gate system typically is very data-driven.

Here’s how it works: An idea is refined, analyzed and ranked against other ideas for market attractiveness and development and manufacturing risk. A business case is made. Sometimes proof of concept is required to determine whether a critical part of the idea is viable. Based on these data, the product development team presents a development plan to the executive decision team. This plan should include estimated costs and timelines, risk and abatements, and forecasted sales over time. There is a decision point after each key phase. Then the executive decision team decides whether to commit resources, abandon the project or recycle it. 

4. Focus on markets, not single customers. Target developing products to key markets — not individual customers — that support the strategic direction of your family business. Avoid tying up resources to develop one-off products that will bring only incremental returns. The revenue from a one-off product may look attractive in the short term, but sales will plummet when that one customer’s business strategy changes. Many companies have fallen into this trap.

Focus instead on growing markets. We call this targeted innovation. It involves focusing on broad markets that you can win and that you have the capability to support and grow as they do. 

5. Think big, but start small. If you are new to product development, take baby steps at first. Start with a small project that has a clearly demonstrated need in the marketplace — one that is well within your capabilities but new to you. At first, avoid products that are too complex or expensive to develop. Save the big ideas for when your teams and processes are up and humming.

Cultural shift
To be successful, this kind of homegrown, organic growth and exploration requires leadership support and an operating discipline at the very top levels of the family business. It can require a significant change in culture — a move away from a culture that fears failure to one based on trust and communication. The culture must encourage tolerance of ambiguity and calculated risk taking. It must foster innovative, entrepreneurial thinking.

Such a cultural shift can be difficult to implement. It starts with the owners identifying and ensuring alignment on their values and the mission and vision for the family business. The owners must decide that the risks are well worth the rewards.

Acquisitions will no doubt continue to be a part of the growth strategy for most family businesses. But many are starting to realize that in today’s competitive market, acquisitions offer limited results. New product development, on the other hand, can provide a whole new path to growth, often with less risk and greater returns on investment. In addition, developing a new product pipeline provides family businesses an opportunity to rediscover and nurture the entrepreneurial spirit of the company’s early days, and to provide a continued legacy for future generations. 

Ken Foster, Ph.D., is president of Green Oak Technology Group LLC, a Southeast Michigan consulting firm focused on new product development and innovation ( Wendy Ulaszek, Ph.D., is senior associate of Lansberg, Gersick and Associates, a consulting firm that specializes in the continuity of family enterprise and family philanthropy (

Copyright 2018 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permission from the publisher. For reprint information, contact

How to encourage innovative thinking

You’ve likely heard the old cliché about the buggy-whip maker (or his more recent counterpart, the video rental store owner) who stubbornly sticks to his business model until changing technology renders his enterprise irrelevant. Presumably you’ve taken this cautionary tale to heart and are not relying on typewriter ribbon sales or telephone booth installation to feed your family.

Even if your family enterprise faces no immediate threat of disruption, innovation should be part of your strategic plan. Finding new lines of business can increase your customer base and provide revenue to counteract dormant cycles in the core business. If you manage innovation well, what was once your “side hustle” might even overtake your legacy business and become your main profit center.

This is not a new concept. Some of America’s oldest funeral homes started out as cabinetmakers that expanded into making coffins and then into providing funeral services.

Innovation can come from anywhere in an organization, but NextGens tend to be a fruitful source of ideas. They are generally more fluent than their elders in the latest technology. Plus, the experience they gained in the classroom and in jobs outside the family business (as required in many family firms’ family employment policies) has given them exposure to different ways of doing things.

What can your company do to encourage innovation? Here are some suggestions:

Teach your NextGens about responsible risk taking. Start by putting them in charge of a relatively low-risk project and allowing them to fail, if that’s what ends up happening. Be supportive and help them analyze what went wrong. This will give them confidence to continue taking risks that are necessary to succeed in business — and experience that will serve them well when they take on bigger tasks.

Start a “family bank” to fund entrepreneurial ventures outside the family firm. Most young people lack the collateral to obtain bank financing for a start-up. Establishing a source of family funding that requires accountability (via a business plan, payment terms, etc.) will encourage entrepreneurship in a formal, professional way.

Take advice from your non-family executives and independent directors. They are not as wrapped up as you are in the family legacy and dynamics. They also know about opportunities and risks beyond the walls of your headquarters.

Make innovation part of your strategic planning. Set aside time and space to brainstorm new ideas. Don’t just run with every idea that comes up — vet proposals’ viability with focus groups. Consult staff who’ll be carrying out the plan about challenges they foresee.

• Inform your family shareholders about what innovation entails. There will be start-up costs, and it will take time before a new venture pays off. Explain your rationale for green-lighting new projects.

New ideas may seem to have come from the heavens, but innovation actually requires cultivation, as well as sufficient time, space and funds for those carrying out the project. Monitor the process and watch for red flags. And get ready for a thrilling ride!

Copyright 2018 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permission from the publisher. For reprint information, contact

Dueling Perspectives: Bill and Mike Betts

Betts Company, based in Fresno, Calif., celebrates its 150th anniversary this year. Founder William Michael Betts, an English spring maker, sailed to the United States in search of better opportunities, first settling in St. Louis and then moving to California. In 1868, he established Betts Spring Company in San Francisco. The company made springs for streetcars, wagons and horse-drawn carriages.

Not surprisingly, the sixth-generation business has evolved over the years. Today, Betts Spring Manufacturing, one of Betts Company’s three divisions, custom designs and manufactures springs for transportation and other industrial applications. Betts Truck Parts and Service provides replacement parts and installation and repair services for commercial vehicles. BettsHD makes safety-related products for heavy-duty tractor/trailer applications.

The company’s purpose statement, featured in its advertising, is “Improving the Way Things Move Since 1868.”
Betts has a long history of innovation. In 1954, the company received the first patent for a spray-suppression product, which reduces the projection of spray or scattering of mud and pebbles from truck tires. In 1956, fourth-generation leader William Michael Betts III invented the first mud flap holder for heavy-duty trucks.

On May 10, 2018, the company — now led by fifth-generation CEO Mike Betts, 62, and sixth-generation president Bill Betts, 36 — marked its anniversary with a celebration attended by about 400 people, including employees, vendors and community officials.

Entrepreneurship runs strong in the Betts family. Bill Betts earned undergraduate degrees in accounting and entrepreneurship as well as an MBA and worked as a business risk/supply chain consultant before joining the family business. His two sisters both founded their own businesses. Carolyn Betts Fleming’s company, Betts Recruiting, is a global firm with multiple U.S. offices. Catherine Betts’ company, Betts Fit, makes sports bras.
We asked Bill and Mike: How does a 150-year-old company encourage innovation?

Bill Betts, G6 president: “Innovation can cover a broad spectrum. Most of what we’ve innovated hasn’t been [inventing] something that didn’t exist before. It’s thinking more about what we need to do to continue to evolve to remain relevant. We look at it as a continuous improvement: how to keep adapting, whether it be a product, a process, the way we hire, the way we onboard our team, the way we train, the way we market, the type of equipment we either buy or design. So to us innovation isn’t strictly just outward-facing to a market. It can also be inward-looking. It becomes more a mindset of not being overly comfortable with where we are.

“What’s key isn’t necessarily predicting the future, it’s just embracing the fact that we’re going to have to change to be relevant. We have to embrace a philosophical approach that for us to be relevant, we’re going to have to keep improving the way things move.

“The things that we’re super-comfortable doing are the things we’ve got to poke at and innovate.”

MIke Betts, G5 CEO: “We really focus on being in tune with our customers. We’re viewed as a critical partner to most of our customers from a design and engineering standpoint. Products change over time, and demands change and materials change.

“It just so happens that each generation [of the Betts family] was involved in designing and building products that there was a demand for, where the market had never been addressed. I think it’s partly luck, I think it’s partly happenstance, but I do think it’s ingrained in us based on the leaders before us — what they accomplished, and how their accomplishments helped leapfrog the company forward during their time.

“Knowing what has happened before has been the inspiration, I think, for each generation to [look ahead]. What’s the next innovation? What are we looking to do? How are we diversifying our product line? How are we growing? How is the market changing? What does the future look like for our business? So I think it’s just part of our DNA.”

Copyright 2018 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permission from the publisher. For reprint information, contact


Publisher's Note: Swimming with the sharks

Like 6 million other loyal viewers who watch the television show Shark Tank, I am addicted. Shark Tank features budding entrepreneurs who rapidly pitch their new business ideas to a panel of savvy judges who might be willing to invest their own money. Contestants must have a product or service that can be scaled in size as well as a sound business plan and, usually, a patent on the product or idea.

This entrepreneurial spirit, which is essential in today's disruptive business environment, can also be seen in the family business arena. At our Transitions conferences, we often hear from NextGen and millennial attendees that they want to be part of the family business, but they don't necessarily want to make the family widget. Many have sought the family's backing for a related business idea.

Getting the senior generation's attention can often be frustrating. After hearing stories of young entrepreneurs who resorted to outside funding because their family failed to appreciate their ideas, we developed a special session that will debut at Transitions West 2017 in San Diego, November 1-3. We're calling it "Fam Tank," our own twist on the popular TV show. Hopefully, it will foster entrepreneurship in the family business.

In November, several entrepreneurs will present their ideas that relate in some fashion to their families' businesses. A panel of judges, all experienced in this area, will grill the presenters on their business plan, ROI for the family, financial goals and other criteria. Conference attendees will have an opportunity to comment on each presentation's connection to the family company and on the viability of the presenter's idea.

One example of a new idea backed by the family business is York Athletics, featured in our January/February 2017 issue. Brothers Kyle, Travis, Evan, Tyler and Dylan York proposed to their family a new venture—an Internet-based, direct-to-consumer company selling unique athletic shoes. This venture complemented their parents' retail store, Indian Head Athletics. According to Kyle, all of them agreed that it was essential to preserve "the dynamics of the family business."

Elizabeth Rees, profiled in our September/October 2015 issue and recently on our website, started Chasing Paper, a company that makes easily removable wallpaper. She developed the idea while working at Kubin-Nicholson, her family's printing business. She pitched her idea to the company's board and received an investment of $65,000 and the OK to move forward as a separate division of the family firm. The new venture has made her more passionate about the family business, she said.

At Transitions, no money will change hands, but Fam Tank should demonstrate to family leaders the importance of opening their minds to innovative ideas. Of course, there are risks to any venture, and while family companies are not immune, we hope to provide an opportunity to the next generation of leaders.

Copyright 2017 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permission from the publisher. For reprint information, contact

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March/April 2017 Openers

A PwC survey of 160 stakeholders in U.S. family businesses has concluded that too few family firms are developing formal succession plans, instituting governance structures or planning responses to industry-disrupting scenarios.

In its survey report, the accounting and consulting firm said many respondents appear to be neglecting medium-term strategic planning, which bridges the gap between day-to-day concerns and the family's long-term vision for the business.

Families that have established formal succession planning and strategy planning practices "tend to be better prepared for that middle period," notes Jonathan Flack, leader of PwC's U.S. Family Business Services practice.

Particularly in the founder and second generations, family business leaders are inclined to focus narrowly on immediate tactical decisions; as the saying goes, they spend too much time working in the business and not enough time working on the business.

"Families have always struggled with putting processes and formalized structures in place," Flack says.

For example, 87% of the survey respondents predicted that five years from now they would generate most of their revenues from the same products or services they offer today.

This is generally not a realistic strategy for business longevity, notes Alfred Peguero, PwC's U.S. family business survey leader. "How does that tie into the idea of growth and innovation, meeting clients' demands and needs, and [changing] consumer tastes?" Peguero asks rhetorically. He notes, for example, that companies in the food industry have had to respond to consumers' growing aversion to sugary snacks and preference for products that are free of genetically modified ingredients.

When asked what would drive their growth in the next five years, 83% of the U.S. respondents planned to increase business in their existing markets. Only 43% predicted that growth would come from acquisitions, while just 41% envisioned entry into new sectors, and a mere 26% foresaw their companies diversifying into new countries.

A parallel PwC survey of stakeholders in more than 2,800 family companies from 50 countries found a disconnect between a perceived need for innovation and the development of plans to actually achieve it. Nearly two-thirds (64%) of the global respondents cited the need to continually innovate as the biggest challenge they would face over the next five years, Yet 72% of the global study participants said their companies would have largely the same portfolio in five years, and 53% said diversification was "not important."

"The changing economy, and the way we do business in the world today, is going to put far more pressure on businesses going forward," Flack says. In an environment marked by rapidly changing technology and global competition, innovation is essential, he notes.

Leveraging capabilities

For the 2016 edition of its biennial U.S. survey, PwC conducted telephone and online interviews between May 9 and Aug. 19, 2016. Annual revenues of the companies represented ranged from less than $10 million (7% of respondents) to more than $1 billion (17% of respondents); nearly a third (31%) of the firms generated annual revenues between $100 million and $500 million.

Companies represented in the survey were about equally split between those in the first and second generation and those in the third generation and above (49% and 51%, respectively).

In the vast majority (91%) of the companies represented, the family both owned and managed the business. More than half (54%) the individuals who completed the survey were members of the family that owned the business.

Flack says the family firms that are best positioned for longevity are those that are able to diversify. "A lot of families have certain capabilities that are unique to their business, but they're also unique because they're a family business," he says. However, he notes, many family business leaders "haven't taken the time to step back and say, 'I know that my people are great, I know that my marketing is great, I know that my distribution is great. How else could those capabilities be used to grow?' " Many of the U.S.'s largest family companies, such as S.C. Johnson & Son and Mars Inc., have grown by diversifying beyond their original product line and expanding sales abroad, Flack notes.

As part of the strategic planning process, business leaders must address the possibility of digital disruption in their industry as well as their company's vulnerability to a cyber attack. PwC's findings indicate that family business owners would do well to put such scenario planning higher up on their priority list.

Only about a third (32%) of the U.S. survey participants said they think their business could be hampered by digital disruption in the short term to medium term, and only 45% said they have a strategy that is fit for the digital age.

Similarly, a third (34%) of the U.S. respondents predicted that cyber threats would be a challenge, and less than half said they are prepared to deal with a cyber attack.

"We know that family businesses are typically the slowest adopters of any technology," Flack says. The reason, he says, could be related to long employee tenure at family firms. Although employee loyalty is a positive attribute, low job turnover means fewer opportunities to bring in new hires with a broader set of digital and technological skills.

Flack predicts that next-generation members who are poised to join their family businesses over the next five to 10 years will help bridge the digital skills gap. "I think they will help at the board level, and I think they'll help at the management level," Flack says. "Because they grew up in the digital world and they grew up with technology, we think that they are extremely well equipped to help lead their families through that transition."

Plans for the future

Nearly three-fourths (74%) of respondents said they employ next-generation family members, up from 59% in 2014. But many survey participants did not envision their younger family members at the helm of the company in the future.

Only 41% of respondents to the 2016 survey said their next generation would run as well as own the company in the next five years, compared with 48% of respondents to the 2014 edition of the PwC survey and 52% of the survey population in 2012.

Just 11% of the 2016 survey participants planned to have the next generation own the business with non-family members running it, compared with 26% who envisioned this strategy in 2014. Nearly one-third (30%) of the 2016 respondents said they'd be seeking to sell to an outside party within the next several years, compared with 19% in 2014 and only 12% in 2012.

In previous iterations of PwC's U.S. family business survey, respondents "tended to be much more optimistic" about the prospect of keeping the business in the family, says Peguero. "In this survey, there's an uptick in [the percentage] that would consider selling the family business to a third party." Peguero calls this finding "a little concerning."

Would the results have been the same if the survey had been conducted after, rather than before, the presidential election? "I think the sentiment in business before the election was the expectation that growth would be flat," Flack says. Anecdotal evidence based on PwC advisers' conversations with clients combined with an increase in transactions since the election indicates that some U.S. family business leaders are expecting the economy to grow, Flack reports.

Yet concerns about the economy likely were not the only factor behind survey participants' plans for an ownership transition outside the family. Of the 2016 respondents who planned an ownership change within five years, 52% said the new owners would be family members, down sharply from the 74% who had these plans in 2014. In 2012, the percentage was even greater (76%). Notably, the figure was higher (55%) even in 2010—when the nation was still reeling from the "Great Recession"—than it was in 2016.

The current study found that family business leaders were thinking about succession, although they had not formalized their plans. More than two-thirds (68%) said they had a succession plan in place for at least some senior roles. However, only 23% described their succession plan as "robust, documented and communicated," down from 27% in 2014.

"We continue to see [that many] families have not put some more formalized succession planning and formalized strategy planning in place," says Flack.

Nearly 40% of those who completed the survey said professionalizing their business will continue to pose a challenge, whereas only about 20% answered in this way in 2014.

One cause for optimism in the survey findings was family commitment to the business strategy. Almost 70% of those who took the survey said the family and business strategies were completely aligned.

Older firms have more structure

A new feature of PwC's family business survey was a breakdown of results by generational cohort. Responses from survey participants whose companies were in the founder or second generation were compared with findings from those whose companies were in the third generation or older.

For example, leaders of older family firms were more inclined to keep the business in the family. Only 8% of survey participants from third-generation or older companies planning to sell said they would seek outside buyers, compared with half the respondents in the founder or second generation.

Older companies were more likely to grant shares to family members not employed in the business (60% of those in the third generation and older, compared with 42% of the founder and second-generation companies).

The mature firms were better prepared to diversify. Of the older companies that were sustaining double-digit growth, 40% planned to expand to new countries, compared with only 19% of those in the first or second generation. Nearly half the older fast-growth companies planned to expand into new industry sectors in five years, vs. 39% of the rapidly growing younger businesses.

The older companies were more likely to have board members in a position to help them address today's challenges. More than half the respondents from companies in the third generation or older said their boards fully comprehend the threat of digital disruption, whereas only one-third of those in first- or second-generation companies said their boards understand the problem.

Another area requiring a forward-thinking approach is succession. More than one-third of the first- and second-generation firms lack a succession plan, whereas 75% of companies in the third generation and older have some kind of plan. And while about two-thirds (65%) of survey participants from older companies said they think their next generation is being properly evaluated, only 51% of those from companies in the founder or second generation felt that way.

Flack says he and his colleagues will use the survey data to demonstrate to their clients in first- and second-generation companies the practices that more mature family firms have instituted.

"We know that Generation 1 and Generation 2 family businesses don't have a lot of structure," Flack says. "What we try to highlight to them as they transition on to the next generation is that structure is needed: structure in the succession planning, structure in the governance, structure in the strategy. The survey really helps to highlight this point. The data shows what third-, fourth-, and later-generation businesses are doing that the first and second generations are not."

Copyright 2017 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permission from the publisher. For reprint information, contact

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Clean hands and giving hearts

It's almost impossible to walk into a hospital, supermarket or public bathroom without encountering a GOJO product. Though Akron, Ohio-based GOJO Industries Inc. is best known for its Purell brand of hand sanitizer, its owners' mission goes far beyond keeping hands clean. Through a unique broad-based structure called the Kanfer Family Enterprise, the family that owns GOJO has reinvented the classic family business model to create an organization that allows every family member to work in his or her preferred setting, yet still be part of the family business.

GOJO was founded in 1946 by Jerome (Jerry) and Goldie Lippman. Like many American women, Goldie Lippman worked in a factory during World War II, making tires. Her hands were always filthy, and only harsh chemicals could clean them effectively.

Working with a science professor at nearby Kent State University, Jerry Lippman developed an effective but gentle industrial hand cleaner. Under the name GoJer, Jerry made the product in his garage at night and sold it from the trunk of his car by day; Goldie managed the books. Soon they changed the name to GOJO and more innovations followed, including the first portion-control dispenser, which Jerry patented in 1952.

GOJO's customer base expanded to food service and health care, as well as industrial and automotive. The invention of Purell in 1988 was a turning point for the company, although it would be another nine years before Purell hit the consumer market and became a household name. The company today makes a variety of soaps, lotions, wipes and disinfectants for both skin and surfaces.

Having no children of their own, Jerry and Goldie Lippman doted on their nephew, Joseph (Joe) Kanfer, the only son of Goldie's sister, Marcella, and her husband, Paul Kanfer. Though Jerry had some distant cousins who worked off and on at GOJO, there was always a sense that GOJO would someday pass to Joe. But Jerry Lippman never pressured his nephew.

"I think I always felt that it was open to me, but it was unstated," Joe says. "It didn't really crystallize till I had to make a decision. I had finished college and I was going to go off to Wall Street, but my mother was dying and I didn't want to leave town, so I started working with Jerry. He said, 'If you want to do this, OK; otherwise, I'm going to sell the business.' I said, 'OK I'm in.' " Joe, now 69, became president of GOJO in 1973 at age 26, and Jerry moved into the role of mentor and philanthropist.

GOJO is the engine of the Kanfer Family Enterprise (KFE), but only Joe and his daughter Marcella Kanfer Rolnick, 44, work at GOJO. Joe is chairman, and Marcella is vice chair. All the other family members—Joe's wife, Pamela; Marcella's husband, Joshua Rolnick; siblings Mamie Kanfer Stewart (34), Ketti Kanfer Zigdon (33) and Jaron Kanfer (30), and their respective spouses—work in the wide range of industries and philanthropies that KFE supports. Their individual ventures include such diverse industries as metal plating and men's apparel, and their philanthropic work covers areas like education and climate change. KFE's organizational structure is highly complex, but its mission is simple: to make the world a better place. Everything in the enterprise, whether for- profit or non-profit, must allow the Kanfers to create meaning and value together as a family.

Marcella—named for Joe's late mother—came up with the idea. "In 2006, I conceived of the notion of an expanded family enterprise when it became apparent that my siblings who were coming of age as adults were unlikely to choose careers within GOJO, but they showed interest in entrepreneurism and/or working with family," she explains.

Joe was thrilled with her plan, which assuaged any disappointment over not bringing the rest of his children into GOJO. All the kids had had summer jobs at GOJO growing up, but only Marcella returned after college.

As Jerry did with him, Joe told his children GOJO was available to them, but he didn't pressure them. "What you do with new facts is create a new situation, and that's how we created KFE," Joe says. Because they do so much as a family outside of GOJO, he says, "It's not like they're disconnected from family work."

KFE has three domains: for-profit ventures, non-profit ventures and philanthropy, and family bonding and infrastructure. Every family member and spouse is involved in some way. The fourth-generation children (ages 1 to 11) are introduced to the family enterprise through age-appropriate games and projects at family retreats held every summer. Marcella Kanfer Rolnick and Joshua Rolnick have four children, Mamie and Justin Stewart have two, and Ketti and Don Zigdon have six—four of whom are quadruplets.

"We created a themed fund in two- to three-year learning cycles on topics we 10 adults choose together to study and determine how we want to make a difference," says Marcella. "Our first cycle was on hunger and poverty. Our current cycle is on global climate change. So, for instance, last summer we visited a family shelter that was home to children their age, and this summer we built solar ovens. We will soon contemplate how to structure opportunities for Gen 4 to opt in to collective family philanthropy."

GOJO: The mother ship

GOJO serves as KFE's financial engine and anchor, as well as a lab of sorts for business practices that could translate to other KFE ventures. GOJO has more than 2,000 employees around the world. Most are in northeast Ohio, where the company has factories in Cuyahoga Falls and Wooster. In 2014, it added three manufacturing facilities in France with the acquisition of Laboratoires Prodene Klint.

In her school days, Marcella worked at GOJO in dispenser assembly, market research, microbiology, quality assurance and library development. After college she participated in the creation of the instant hand sanitizer category in professional markets and in the consumer launch of Purell, worked on the education market development team, and created and led the original Internet development/e-business team. She and Joe today have strategic roles.

Mark Lerner, GOJO's non-family president, is "like a brother to me," Joe says. Lerner has worked with the family for 30 years. "I have found the biggest advantage is a highly collaborative, dialogue-rich, team-based approach to leadership," Lerner says. "This has resulted in better decisions and a great deal of personal growth and fulfillment. The biggest challenges have been maintaining high organizational agility and flexibility to both keep up with the entrepreneurial drive of Joe and Marcella and simultaneously execute current strategies and plans."

Carey Jaros, GOJO's chief strategy officer, also serves as secretary to the board of directors. She moved into the CSO position in May 2016 after 18 months as president of Walnut Ridge Strategic Management Company, which Joe and Marcella founded in 2011 as a family office and management services firm to support the wide-ranging activities of the Kanfer family.

"As a director on the GOJO board, I learned the business top-down from 50,000 feet," Jaros says. "I also had many opportunities to talk to Joe and Marcella one-on-one about the business, to hear the 'kitchen table' stories about Jerry and Goldie, about some of the great successes and biggest lessons learned." Jaros says her understanding of how GOJO fits into the broader context of KFE brings important perspective to her role at the company.

"I always feel like I have a voice at the table, and the expectation is that I will speak up if I have an idea or a concern," Jaros says.

"I suppose we face the typical challenges of family companies with respect to generational transitions, but I feel like we are doing all of the work we need to do," Jaros says, "including having an intentionally built, multigenerational family and non-family leadership team, to ensure GOJO continues to deliver outstanding value to all of our stakeholders for many, many years to come."

Michael Moran, Walnut Ridge's managing partner, says the family office is "committed to pursuing not only the family's financial goals, but also their human and culture goals."

Mental models provide a framework to guide company stakeholders. The GOJO Alignment Model incorporates the company's Purpose, Vision, Values, Critical Success Factors, Strategy, Process, Structure and Competencies. The GOJO Alignment Model, found in every conference room and accessible via the company intranet, is constantly reinforced, says Lerner. "At every one of our quarterly stakeholders' meetings, we discuss our GOJO Purpose and provide a story from customers about the lives we touch," Lerner says. The GOJO Purpose—"Saving lives and making life better through well-being solutions"—is the "north star," Lerner says.

Company leaders must "walk the talk," Lerner says. "In many meetings, we bring the GOJO Purpose, Vision and Values into the conversation to help frame decision criteria," he says.

Family businesses beyond GOJO

Though Marcella's siblings opted not to join GOJO after college, KFE is an investor in each of their respective ventures. But they also must invest their personal capital along with the KFE funding, says Marcella—and their chosen venture can't run counter to KFE's core values, Joe notes.

One KFE investment venture is Meeteor, a tech startup run by Mamie Kanfer Stewart. Inspired by GOJO's practices, Meeteor helps companies spend less time in unproductive meetings. Mamie's husband, R. Justin Stewart, manages family real estate properties: residences in Chatauqua and Brooklyn, N.Y., as well as a small office in Brooklyn. In addition, he founded and runs Blue Cube Properties, which does small-scale, multifamily, green real estate development in Brooklyn. The family enterprise also has co-invested in Blue Cube.

"I appreciate how KFE includes more than just business," says Mamie Stewart. "The three domains [business, philanthropy and family infrastructure] allow each person in the family to connect in ways that are meaningful to him or her. Personally, during the past 10 or so years, I've managed one of our foundations, co-led family culture building, and then started my own business. I've moved fluidly through the KFE framework, which has allowed me to explore and find what works best for me.

"It also allows us to build relationships with each other that are based on different types of engagement. We can talk about business, philanthropy, values, legacy and more, which enables us to learn about each other, inspire one another, and bring our full selves to the table."

Ketti Zigdon (née Kanfer) is a stay-at-home mother. Her husband, Don, together with the Kanfer family and a friend, created an investment group called KBZ Partners in 2013, looking for companies poised for growth. KBZ invested in Lake City Plating, an Ohio-based metal finishing company whose plating technology enhances parts used in the automotive and electrical utility industries. In addition to being an investor in the company, Don Zigdon is its controller. Ketti, meanwhile, serves as secretary of the Lippman-Kanfer Family Foundation, one of KFE's philanthropic arms.

The youngest sibling, Jaron Kanfer, and his wife, Sara, run a men's apparel company called UNKNWN. The family co-invested with NBA basketball legend and Akron native LeBron James to create a new fashion brand. Based in Florida and with a strong online presence, UNKNWN offers sneakers, modern streetwear and designer apparel.

With family members living in Ohio, New York and Florida, technology plays a critical role in running KFE. Though the family frequently gathers in person for meetings and retreats, day-to-day interaction occurs via telecommunication.

Joe Kanfer, meanwhile, is a venture investor in (non-KFE) biotech startups in both the United States and Israel. Pamela Kanfer, a teacher, is involved with KFE's education-based philanthropies. She also serves, in Marcella's words, as "a thoughtful and astute sounding board for my father as he contemplates business strategy. Pam played a key role in convincing my father to launch Purell in the retail market for consumers."

Marcella's husband, Joshua, a journalist and blogger, has been engaged in Democratic politics for many years.

"We are evolving our approach across KFE to improve our effectiveness as we grow, so we are investing time in planning our path and strategy that will set the table for what we want to accomplish in the future with multiple generations," Moran says.

Come on in!

KFE has no prerequisites for family members who want to join. But there's no free ride, either: KFE will be a co-investor—not the sole investor—in the siblings' and in-laws' various ventures.

"We believe in giving family members the opportunity to learn on the job as long as they have skin in the game," says Marcella. "In addition to their functional roles, we give them a seat at the governance table as well, helping them develop the ability to think about the business holistically."

Joe is a proponent of learning on the job. "My uncle allowed me to take an awful lot of responsibility at an early age, so I never had this kind of rigidity that you read about elsewhere, where you've got to go work elsewhere first to prove yourself or you have to start at the bottom and work your way up," Joe says. "My uncle's idea was more to put you in a little over your head, and you learn by trial and error.

"I made tons of mistakes," Joe acknowledges. "I was very aggressive in trying new things, and in retrospect some were not very good or successful. I think that's true of most entrepreneurs. If they knew how hard it would be or the risk levels, they wouldn't have done it, and you read more about the successes than the failures. I worked hard and stayed with it and, frankly, I got lucky. And my uncle, to his credit, would say it was a blessing in disguise when I screwed up. I'd ask why and he'd say, 'It could have been worse.' "

Giving back

Philanthropy is the second of KFE's three domains. "Since 1966, when Goldie and Jerry founded Jerome Lippman Family Foundation, our family has been passionately committed to contributing to the betterment of the world and doing so collaboratively rather than individually," says Marcella. But in true KFE fashion, there's also a mechanism—through matching funds—that allows individual family members to contribute to causes they're individually passionate about.

"It's about getting people to follow their own passion, not roping them into my passion," says Joe.

The original Jerome Lippman Family Foundation focused primarily on Akron-based Jewish organizations, especially schools. In the 1990s, the foundation refined its mission with a special emphasis on lifelong Jewish education, helping people in communities at risk, and fostering high performance and innovation in Jewish non-profit organizations. In 2000, the foundation name was changed to the Lippman Kanfer Family Foundation (LKFF). Today, its purpose is to "repair and enrich the world through thriving communities."

After Jerry's death in 2005 at age 92 (Goldie died in 1972), the foundation sought to build on his legacy and incorporate the family's diverse philanthropic interests as the third generation became involved. In 2013, the family launched a sister foundation, the Lippman Kanfer Foundation for Living Torah (LKFLT), which supports Jewish organizations devoted to human rights, social justice and Jewish life.

While the emphasis of both foundations is on Jewish life, compatible non-Jewish organizations also benefit from LKFF funding, such as the Sargent Shriver National Center on Poverty Law, the New York City Coalition Against Hunger and Neighbors Together, a social-service agency in Brooklyn.

All family members serve on the board of either one or both foundations. At LKFF, Joe Kanfer is the founding director. Pamela Kanfer, whose background is in education, is chair. Ketti Zigdon is secretary, and siblings Marcella, Mamie and Jaron are directors. The siblings' spouses also are directors. At LKFLT, Marcella, Mamie, Joseph, Pamela and Joshua are founding directors.

Apart from the KFE foundations, GOJO as a company gives to the Akron community. 

Family bonding and infrastructure

KFE's third domain is family togetherness. The family holds multiple retreats and meetings for its businesses and foundations. There is an annual adult retreat to review the for-profit domain; the family's 10 adults get together to evaluate KFE's business and investment status, performance and plans, as well as other relevant topics such as estate planning. Both of the philanthropic foundations also have annual summer retreats, and there are board meetings and working sessions throughout the year in which only those family members who are involved with that particular segment participate.

"Our family does not see boundaries," Marcella says. Freedom from the constraints of a traditional hierarchy enables the family members to follow their individual passions and to create meaning and value together, Marcella and Joe say.

Hedda T. Schupak is an editor and analyst specializing in fine jewelry and luxury retailing.

Copyright 2016 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permission from the publisher. For reprint information, contact

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Darn That Dream

Terry and Regina Locklear started a sock business in a textile mill in their hometown of Fort Payne, Ala., in 1991. They named their company Emi-G Knitting, after their daughters, Emily and Gina. Emi-G makes white sport socks for volume customers that in the company's heyday included Russell Athletic. Regina, 68, does the accounting, and Terry, 71, runs the rest of the operation.

Both daughters had worked and played in the mill as children, and Terry and Regina always hoped that one or both would take an interest in the business. Terry even included a third office when he and Regina remodeled the mill in 1996. But Emily, now 33, was busy raising a family in Nashville, Tenn. Gina, who lived with her lawyer husband in Birmingham, Ala., an hour and a half away, had gotten her real estate license at age 25 and was selling homes.

"I was interested in working at Emi-G when I graduated from college in 2002, but the business was dying, to be honest," says Gina, 36. There was nothing there for me." Although the hosiery industry has been a major employer in DeKalb County, Ala., where Fort Payne is the county seat, other local sock businesses, overtaken by foreign competition, gave up.

In 2008, as Terry and Regina were struggling through the financial crisis, Gina approached them with a radical idea: She wanted to manufacture a different kind of sock at the mill. While her parents continued with Emi-G, she would produce small batches of trendy, organic cotton socks in a variety of patterns and colors.

"After witnessing all the mills closing around us due to outsourcing and not knowing what the future held for my family's business, I thought I could help," Gina says. "It's been a roller coaster for the last 15 or 16 years. I knew a lot of people who lost their jobs." Gina had been following an organic and "green" lifestyle for years, and organic cotton socks were a natural next step. She was inspired to start her own brand. If it was successful, her family wouldn't have to worry about the possibility of clients they'd had for years outsourcing. "I also wanted to be able to tell the story of our family business, and also what once was Fort Payne's sock story, through our socks," she adds.

"I went to my father first," Gina says. "He's the idea person, and if I was to get anyone excited about this, it would be him. Organic cotton in a textile was a fairly new idea back then, and not many people were doing it—and still aren't. I also had to convince my parents that it made sense to start our own brand rather than only make socks for other people." She saw it as the future of the company.

Major commitment

Gina's college degree is in business and she had worked in retail at Banana Republic in college and at a ski shop afterward, even doing some buying. But was that experience enough to dive into this new venture with confidence? "I was pretty skeptical at first," Terry says. "Gina had introduced us to organic eating several years ago, but I knew this would be a big commitment on her part." Both he and Regina were interested, however. "It was something we wanted to look at, and if it was worth pursuing, we were all about it," he notes.

His daughter won him over. "Gina's really smart; I thought she could do it," says Terry. In 2009, after a year of planning, she started Zkano. The name comes from a Native American word that loosely translates as "a state of being good," Gina says. The brand's slogan, "Be Good. Feel Good," relates to the name.

"I couldn't believe how much research she did on organic cotton that year," her mother remembers. "She spent hours and hours learning about it." The entrepreneur trademarked her Zkano logo and was off and running.

Zkano operates under (or "Does Business As") the name Emi-G Knitting, which has made the administrative side of the operation easier. While Gina refers to Zkano and Little River Sock Mill, another sock company she started, as her babies, she also says her parents are very much a part of her two brands. Her mother handles Zkano's books and prints the shipping labels for online orders; her father takes shipments to UPS daily.

Being able to piggyback on Emi-G's infrastructure has helped Gina. "Three years after we started Zkano we got a few new milling machines with different needle counts for the new socks, and we spent a little on marketing," she says, "but we really haven't had to make a huge investment."

After starting out online with Zkano, Gina wanted to shoot for a few boutiques, so in 2013 she launched Little River Sock Mill. "I named this company for the Little River Canyon Preserve that's in our backyard, and we liked 'Sock Mill' because it screams, 'Hey, we make our own socks,' which makes us different," Gina says.

Little River offers more sophisticated—and slightly more subdued—designs than Zkano's bright stripes and colors. Prices for both brands range from $13 to $30.

The three Locklears do most of the work themselves. The three sock companies share a staff that numbers between 25 and 30, depending on how busy Emi-G is, and rely heavily on the plant manager, who had to learn about making organic socks along with the Locklears. Most of the manufacturing process is automated but, understandably, making colorful socks with patterns and stripes is far different from making all-white ones.

Three days a week Gina stays at her parents' house; the other two she works from home in Birmingham. Gina says she doesn't mind staying in her old bedroom; in fact, she reports that she likes it. "A lot of people think it's weird, but it's not," she says.

Gina never lived at home after college, and her mother redid her room when she left, so it's not as if the décor is frozen in time from high school. During the companies' fall busy season, she doesn't get home until 7 or 8 p.m. many nights.

The businesswoman finds that exercise helps reduce the stress of entrepreneurship. In addition to yoga, cardio exercises and strength training, she'll wind down after work with a half-hour swim in her parents' backyard pool if the weather permits.

Zkano and Little River have turned "a small profit," which is not enough to carry the mill, Gina says. When sales increase significantly, she and her parents will need a formal financial arrangement, she acknowledges.

Starting on the right foot

Revenue may indeed balloon. After editors from Martha Stewart Living magazine saw Little River socks at a trade show, in 2015 the magazine presented her with a Made in America award for that brand. "I still get goosebumps when I think about it," Gina says.

Three years ago, Gina partnered with men's fashion designer Billy Reid, also a native Alabaman. "That was another happy moment," she says. In addition, an actor on the TV show Veep wears Zkano socks, and in April Gina was featured on the front page of the New York Times' "Thursday Styles" section. After that article appeared, "I had the biggest jump in sales ever on the website," she says. "People also wrote just to say 'good luck,' and I was overwhelmed by the support." She had been answering emails herself up to that point, but that month she hired an assistant to handle customer service and business inquiries.

Emi-G also received a lot of interest after the Times profiled Gina, though many of those inquiries were irrelevant. "A lot of people don't understand we're high-volume," Terry says.

Talk to the three Locklears, and it's obvious that their solid relationship is a major factor in the smooth operation of the new ventures. Some family business members freely admit that tempers fly at work, and that boisterous disagreements are not uncommon. But Gina says there is none of that at her family's mill. "The most that happens is that if things get crazy, once in a while we might snap at each other. I not only love my parents, I like them, too. My dad's my mentor," she explains.

Terry says he taught his daughter how to calculate costs and margins, as well as how to manage people, and Gina has learned more than a few things on her own. "I knew when we started we needed to go to trade shows, but I didn't know which ones," she says. "That's how Zkano ended up being an online business. With Little River, we worked with a showroom in Los Angeles and sales reps who go to trade shows for us."

Regina advises family business leaders to take next-generation members' entrepreneurial visions seriously. "The young generation has bright ideas; try to approach them on their level," she says.

"Gina keeps us pumped up; we're having fun every day," Terry says. "It's really interesting to have a new twist on something we've been doing; she keeps us hopping."

Regina says she and Terry don't plan on retiring as long as their health is good. And they're confident that when they do step down, the sock business will be in good hands with their daughter.

Patricia Olsen is a freelance business writer whose work has appeared in the New York Times, Continental, Harvard Business Review online and other publications.

Copyright 2016 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permission from the publisher. For reprint information, contact

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Thinking different

In 1997—before the iPhone, iPad, iPod, MacBook or Apple Watch—the company then known as Apple Computer Inc. unveiled a new advertising slogan: "Think different." Founder Steve Jobs had recently returned to Apple after an 11-year absence following his forced resignation from the company, which was struggling to regain its prestige. The tag line signaled that Apple had recovered its creative mojo. Many observers interpreted it as a salvo against IBM's slogan, "Think."

In this issue, we shine the spotlight on two families who are thinking different. Internationally recognized golfer Greg Norman could have sat at home and waited for his agent to call with celebrity endorsement offers. Instead, Norman thought outside the Wheaties box. His Great White Shark Enterprises, where his son, daughter and son-in-law now work alongside him, has blossomed into a global holding company with interests in a variety of industries. As reporter Dave Donelson notes in his profile of Great White Shark, Norman receives equity stakes in companies whose products he endorses rather than just accepting a check in return for the use of his name. The golfer has a long-term vision for his family enterprise—he is talking about a 200-year plan—and is taking steps to build a company that won't fizzle out after his name recognition has faded.

The Leonard family, profiled by Deanne Stone, owned L&H Packing, a meat-packing company in San Antonio, Texas, for nearly a half-century. After struggling to survive for several years amid a drought that devastated the region's cattle population, the family made the decision to close L&H last year. But shuttering the legacy business didn't put an end to the family's entrepreneurial activity. The Leonards also owned and operated two sister companies: Surlean Foods, which makes custom food products for chain restaurants, and New Earth Soils & Compost, an organics recycling company. Today, Leonard Holding Company is the parent company for Surlean, New Earth and the family's investment interests. Well before circumstances forced the closure of their original company, the Leonard family had diversified from their initial line of business. Closing L&H Packing, though an emotional decision, enabled the family to put all of their energies into their profitable ventures.

A 2011 study of family enterprises by researchers Thomas Zellweger, Robert Nason and Mattias Nordqvist found that a small percentage (10.6%) controlled only one business; in fact, more than a fifth (21.3%) controlled five or more companies. Over the history of these families' business activity, their main industry shifted an average of 2.1 times. The key to their ability to stay in business was their adaptability, as well as their success at transmitting their entrepreneurial spirit to the next generation.

Keeping a business afloat from day to day involves sound thinking. But sustaining an enterprise through multiple generations requires something more. The key to business longevity is thinking different.

Copyright 2015 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permission from the publisher. For reprint information, contact

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