Strategic Planning

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


Family businesses are an antidote to the problems of short-termism

Imagine your daughter coming home from fourth grade one day and, with a defeated look, handing you her midterm report card. She showed such promise in kindergarten. But for the second quarter in a row, she’s received Cs, B-minuses, and even some Ds and Fs.

Her teacher has added a sobering comment for you: “I don’t see things improving anytime soon.”
It’s been a mostly good decade with this kid, but enough is enough. You decide it’s time to disown her. You tell her she needs to find some other family to live with.

Of course, this scenario is ridiculous. But consider an analogous situation. Every quarter, investors in public companies review short-term forecasts and adjust their portfolios accordingly. Sometimes the guidance influences their decisions more than actual earnings reports and business fundamentals do.

In essence, that is what led Jamie Dimon and Warren Buffett to write a June 6 Wall Street Journal commentary, “Short-Termism Is Harming the Economy,” where they called for an end to quarterly earnings-per-share guidance. They warned that “quarterly earnings guidance often leads to an unhealthy focus on short-term profits at the expense of long-term strategy, growth and sustainability.”

Analogously, your daughter with the bad grades would likely begin cram sessions lasting past her bedtime to avoid her parents’ and teacher’s ire. Imagine how those habits would harm her ability to learn over the long term.

A dozen years ago, in the Berkshire Hathaway “Owner’s Manual,” Buffett described the opposite approach: “We hope you instead visualize yourself as a part owner of a business that you expect to stay with indefinitely, much as you might if you owned a farm or apartment house in partnership with members of your family. For our part, we do not view Berkshire shareholders as faceless members of an ever-shifting crowd, but rather as co-venturers who have entrusted their funds to us for what may well turn out to be the remainder of their lives.”

In other words, he wanted to treat investors like family.

Longer time horizons
That’s not to say every investment will be as dependable as Berkshire. The point is that shortsighted decision making will eventually undermine long-term goals.

I run the Tulane Family Business Center, now in its 25th year. During that time, we have worked with 264 family businesses across the Gulf South, and we’ve seen how many of these CEOs have taken the long-term approach that Dimon and Buffett encouraged. In 2010, Buffett told the Wall Street Journal, “Family-owned businesses share our long-term orientation, belief in hard work and a no-nonsense approach and respect for a strong corporate culture. Family businesses and Berkshire Hathaway have a common philosophy and make a good team.” 

The call to end short-termism should resonate with family business owners. There is evidence that family businesses tend to make decisions in pursuit of longer time horizons and that they persist in maintaining a long-term approach, even when pressure for short-term results is high. In a 2012 Ernst & Young study of 280 family businesses, nearly half the respondents said they would invest additional resources in “developing innovation, new products, new technology,” the highest of all priorities listed.

By contrast, a 2015 study of public companies by FCLTGlobal found only half the respondents would make the long-term (and unambiguously better) choice when presented with a major strategic challenge. That’s no surprise, since short-term pressure keeps increasing for executives. Eighty-seven percent report that they’re pressured to demonstrate strong financial performance within at least two years.

Community focus
BlackRock CEO Larry Fink has also addressed short- termism, making an argument that complements Dimon and Buffett’s. In the firm’s 2016 annual report, he wrote, “Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.”

BlackRock manages more than $6 trillion in investments through 401(k) plans, exchange-traded funds and mutual funds, so CEOs worldwide heard the message loud and clear when Fink warned that without a sense of purpose, they “will ultimately lose the license to operate from key stakeholders.”

Recent surveys substantiate Fink’s concerns. Of 33,000 respondents across 28 markets in the 2018 Edelman Trust Barometer, more than three-quarters said they “expect a company’s CEO to be personally visible in sharing its purpose and vision,” and 64% said “CEOs should take the lead on change rather than waiting for government to impose it.”

Howard W. Buffett, Warren Buffett’s grandson, wrote in Harvard Business Review in March, “Profit and purpose are converging.” And as he explains in his new book, Social Value Investing, “the pressing question isn’t whether managers and CEOs should care about advancing society’s goals, but how they do so most effectively.”

Here, too, we have much to learn from family businesses. Facing a rapidly consolidating market, Illycaffè’s CEO, Andrew Illy, told the Financial Times in 2015 that while it was tempting to go public, “We are a family business and we have two things to protect. One is the dream of the founder to offer the greatest coffee in the world and the other is our family name. This requires a long-term vision and cannot be achieved with quarterly results.”

Illy, a third-generation CEO, has said, “This is not only a family business, it’s also a family name, so this is even bigger as a responsibility. I am here with a very strong concern to preserve the legacy of the enormous reputation that we have and to continuously improve that, in order to respect what we inherited from the previous generation and prepare a better company for the next one.… We need to spend the next two decades creating a better society, focusing on renewable energy and wealth in developing countries.”

That may seem bold, but Illy is not alone. According to a 2011 study in the Journal of Business Ethics, family businesses approach their stakeholder relationships differently, taking a more holistic view toward society and future generations. After analyzing 706 companies from 1991 to 2005, researchers found family firms undertook more social initiatives than non-family businesses. The investigators also found that greater family member involvement was correlated with a higher number of social initiatives.

Likewise, in a 2010 study (“Socioemotional Wealth and Corporate Responses to Institutional Pressures: Do Family-Controlled Firms Pollute Less?,” Administrative Science Quarterly), researchers who analyzed 194 US firms that were required to report their emissions found the family-controlled companies had a better environmental performance than their non-family counterparts, “particularly at the local level.” The investigators hypothesized that “at the local level, the distinction among family, society, and business becomes rather blurred.”

Next-generation leadership
As any family business owner will tell you, all of the preceding findings certainly do not mean that pursuing multigenerational strategies will be the easier path. Family businesses face the struggles of family life along with (and often compounded by) the problems of running a successful business.

At Tulane, we have identified NextGen leadership as a key area that demands greater research and analysis. Along with trepwise, a New Orleans-based consulting firm, we have conducted in-depth interviews with over 50 leaders involved with family business and are now surveying more than 100 additional stakeholders about the concerns we have identified. Here are three of our main findings thus far.

1. Most family business owners want better preparation for succession. The family business leaders we surveyed gave an average grade of B- to their confidence in current succession plans. This was also reflected in data elsewhere. In a 2016 study of U.S. family firms, PwC found only 23% had a robust succession plan in place. Of the first- and second-generation firms, 75% stated “ensuring a smooth transition to the next generation is a concern.” It should be. The family businesses we interviewed reported that, on average, it takes 10 years to successfully transition to the NextGen after they join the business as full-time employees.

2. Current leaders are concerned that the NextGen will not be able to keep up with the changes in markets, policy, regulatory environment and technology. But beyond these extrinsic factors that are out of their control, they told us they are most concerned that the next generation has not undergone adequate preparation and leadership development. This also matches national findings. When Deloitte asked family business owners about the most disruptive factors on the horizon, 38% said “changes in family relationships” or “succession,” far exceeding “market disruption” at 20% and “digital disruption” at 6%. In the same 2017 Deloitte study, only 3% of respondents disagreed with the statement “Succession in a family business is a natural point of disruption,” while 73% either fully agreed or somewhat agreed.

3. Simultaneously, NextGen members are concerned that the previous generation will resist the change and innovation necessary to remain competitive. Among our NextGen interviewees, 25% were engaged in entrepreneurial ventures in-house, including a food truck launched under the family’s restaurant brand and a dog-walking company completely unaffiliated with the original family business. This also mirrors broader trends. Deloitte has found that 56% of NextGen leaders will change the company’s strategy once they are at the helm, and a staggering 80% say that their leadership style will be different from that of the previous generation. But change will not come easily. As one NextGen leader told us, “In a meeting, I proposed a massive rebrand. My dad was sitting in the room, and he looked up and said, ‘Who the hell made that decision?’ ” 

That might sound familiar. If so, I am sure you will agree we have work to do. Over the coming years, I hope the Tulane Family Business Center will play a leading role in that effort, through further research, analysis and curriculum development on NextGen leadership.

It will surely be worth it. According to research by FCLTGlobal and McKinsey and Company, “if all public U.S. companies had created jobs at the scale of the long-term-focused organizations in our sample, the country would have generated at least five million more jobs from 2001 and 2015 — and an additional $1 trillion in GDP growth.” These researchers project that short-­termism could cost the American economy another $3 trillion in forgone GDP and job growth by 2025.

To all of us at the Tulane Family Business Center, addressing that is a goal worth pursuing — over the long term.

Rob Lalka is professor of practice at Tulane University’s A.B. Freeman School of Business and executive director of the Albert Lepage Center for Entrepreneurship and Innovation, which is home to the Tulane Family Business Center.

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



The strategic way to do your planning

Family businesses face extra challenges when it comes to strategic planning because they must address family as well as business issues. Too many family firms schedule multiple planning meetings and still end up with a failed plan, because they didn’t approach the process properly. Before you prepare a PowerPoint deck to show your planning team, consider the following questions:

Are all family shareholders on the same page about the mission and vision of the organization? What inspires your family to stay in business together? What are your goals for the enterprise? What are your growth aspirations over the next five years—and what investments are needed to achieve those goals? Under what circumstances would you consider selling the company?

How will objectives be set? Are you seeking input from the people who will do the day-to-day work to carry out the strategic plan? Does your time frame and budget account for real-world constraints?

Are you allocating sufficient resources to meet your objectives? If your goal is to provide products of the highest quality, are you budgeting enough to ensure production of high-end goods? If you want to be seen as trustworthy, are you investing time and money on quality control? If you aim to expand into new markets, does your budget reflect needed steps to appeal to customers in these markets?

Does your plan address disruption? A PwC survey of family businesses in 2016 found that 87% expected to still be earning money from the same products and services in five years. Given the rapidly accelerating rate of technological change, how valid is this assumption? What adjustments would be needed if the economy entered a recession? Do you have an emergency succession plan?

Is your plan based on sound research? Relying solely on your instincts, or advice from your friends, can get you into trouble. Valid surveys provide a reality check, helping you assess whether your product/service offerings are in line with the needs of the marketplace, your price points are appropriate and your marketing strategy will successfully attract new customers.

Is there a plan for developing the capabilities of your family members? Are you educating NextGens so they can become responsible stewards and valued contributors to the enterprise? Think ahead: What family governance structures will be required as the family grows larger?

When will you revisit the plan to assess its effectiveness? Be sure the assessment goes further than just checking boxes to mark the completion of projects. Did the completed projects lead to greater profitability or operating efficiency? If something didn’t get done, what obstacles got in the way?

An independent board—businesspeople who have taken other companies to the stage you are striving to reach—is a great source of guidance as you develop your plan. Their constructive critiques, offered from a perspective of prior experience and objectivity, can help ensure you are neither failing to plan nor planning to fail.

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Long-term thinking

When family firms are compared favorably with non-family companies, a point often cited is family business owners' "patient capital." While many corporations are focused on maximizing shareholder profits quarter to quarter, family business owners are more willing to reinvest in the business for the future.

Long-lasting family firms—those in existence for a century or more—are praised for having the foresight to diversify and reinvent themselves. They exit businesses that are no longer sustainable and enter more fruitful ones. Folkes Holdings, based in the U.K. and South Africa, started in 1697 by making chain mail and swords; today, the company invests in real estate and has holdings in agriculture, tourism and engineering. Menasha Corporation of Neenah, Wis., began as a maker of wooden pails in 1852; over the years, the company evolved into packaging, logistics and marketing.

Too few people recognize that the notion of "family enterprise longevity" extends beyond management of the legacy operating company. Many families continue to own their company although no family member works there. Other families that have sold their businesses remain together as an investor group.

It's important to understand that if you envision your family enterprise lasting a century or more, you must apply long-term thinking not just to your business, but also to your family. That means considering how today's decisions on a range of matters will affect the family in the future. Is it wise to create trust terms that restrict flexibility? Will your estate plan create dissent among your heirs?

Family members will need a whole lot of training if they intend to continue in business together. All owners must know how to read a balance sheet. They must understand concepts such as valuation discounts for business interests. They must know how to keep emotions rooted in family history out of discussions of today's agenda.

Most thriving multigenerational business families have regular family meetings and gatherings to discuss important matters as well as to build connections among cousins who live far from each other. Many of these families have a mission statement, a vision statement and a set of policies governing how potentially sticky situations will be addressed. They regularly review these documents to determine whether revisions are required. They recognize that family values are likely to evolve over time. (Consider the Rockefeller family, who once owned Standard Oil and are now environmentalists.)

None of this is easy. Making it all happen requires a considerable investment of time and money. Some family members who work outside the business will need to use their vacation time to travel to family meetings. Conflict will arise and will need to be managed.

In other words, if you aspire to leave an entrepreneurial legacy that lasts for generations, your work must involve more than building a viable business. You must also build a cohesive family.

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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Planning ahead

In its recently released global survey of family business owners, accounting and consulting firm PwC found that too few of them are establishing structures that can help them meet the challenges of the future. (For a report on the U.S. edition of the PwC study, see the "Openers" section of this issue.)

As the family company passes to the second generation and then to the third and beyond, the business environment will change—and so will the composition of the family. Your management team, with guidance from your board, must consider how new technologies might affect your industry, where in the world your competition will come from and what your future customers will demand.

In addition, your family leaders must anticipate what your family will look like a generation or two from now, what those family members' concerns will be, and how good governance can keep them united in support of the enterprise (even as the enterprise changes to meet the demands of a changing world).

This edition of Family Business presents the stories of two families who recognized the need for advance planning and, after considering what issues might arise in the future, were proactive in making changes to prevent problems that were foreseeable.

The Lyles family, whose holdings include construction, real estate and agricultural businesses in California, started to focus on strengthening family communication and connection about 10 years before the third generation would pass the baton to the fourth.

The Graeter family—the Cincinnati-based makers of Graeter's ice cream, which is sold in neighborhood stores and in more than 6,000 grocery stores nationwide—realized that they needed to confront questions about the ownership structure in order to ensure a harmonious partnership among the three fourth-generation members. Today, the fourth generation is thinking about how governance might evolve as they bring the fifth generation along. They already have formalized their business operations.

In PwC's analysis of its family business survey, the firm concluded that long-term success depends on family firms' ability to adapt. The most adaptable have leaders who take time from daily operations to envision the future, from both a business and a family standpoint.

Of course, unless you're clairvoyant, you won't be able to predict every circumstance your family business will confront. But some situations can be anticipated (to name a few: the family will grow larger with each generation, stock will be transferred from one generation to the next, some family members will move out of town, not everyone in the family will join the business). The more plans you make to address these challenges, the better equipped you will be to continue as an enterprising family.

"Good succession planning," the PwC survey authors wrote in their report, "involves a series of intentional, well-coordinated, strategic efforts, sustained over time."

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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The challenges of long-term planning in a family business environment

Long-term planning can be a challenge for any company, but family businesses have their own unique set of obstacles when it comes to making plans for the future.

A long-term business plan is both worth the work and critical to continued success. The planning process provides an opportunity for family businesses to become more intentional and principle-driven.

Communication becomes more important (and more difficult) for each succeeding generation, usually because of the growth of the organization. The larger a family business becomes, the more important it is to nurture, protect and direct the culture. This is achieved proactively through well-articulated core values, clear direction about strategy and regular reviews to compare company performance (both financial and non-financial) against agreed-upon standards.

Even if internal or external factors change significantly enough to challenge the relevance or potency of the existing plan, having a well-thought-out plan in place creates the context and stability necessary to navigate the new factors and adapt accordingly.

Critical for sustainable growth

Long-term planning is necessary to protect the family and business assets, both tangible and intangible. Tangible assets are the financial assets of the business as well as real estate, equipment, infrastructure and so on. The intangible assets include intellectual property, loyal human capital and, maybe most important, the unique culture. All these assets have been built over time (usually decades), and their value can be protected and increased through quality long-term planning.

In one third-generation family business, for example, multiple legal entities had been created over the years with assets worth hundreds of millions of dollars, accumulated over many decades. Without careful long-term planning, including estate and governance planning, events such as violation of legal guidelines, risks to the estate and inappropriate taxation could threaten these assets.

Most family businesses have tremendous amounts of experience and wisdom gained through organic growth over decades. Long-term planning helps to document this wisdom from the past and translate it into lessons for the present, to create a more intentional and sustainable future.

Overcoming the challenges

Family conflicts can layer a distinctive set of complications over the long-term planning process. The three most common family challenges are:

• Separating family concerns from business concerns (both are valid, but must be recognized as such and not intermingled).

• Helping family members understand their professional potential and pursue the "best version of themselves" regardless of where they fit on the org chart (making performance and satisfaction more important than rank).

• Professionalizing the business in its approach to talent, strategy and performance.

We recently worked with a client who had family members without current involvement in the business and family members in the business who were underperforming. Establishing three distinct governance bodies helped them separate the concerns and deal with each set of interests more effectively.

The organization began by clarifying and solidifying its management structure. There was a need for more specific role clarity and performance management standards throughout the management team. The focus of the team was on business performance and direction, without getting caught up in specific family concerns.

Next, the family reached outside to build a board of advisers. The role of this group is to review and question management's business plans (short-, medium-, and long-term), to assess organizational performance against the plans and to provide advice to the CEO. (Many families who initially form a board of advisers eventually make the shift to a board of directors. While a board of advisers is a consulting body, a board of directors has voting authority and oversight responsibility.)

Finally, a family council was created. This provided a way to keep family members outside the business informed about the health and performance of the organization, while warding off meddling or special-interest interference in the business. It also provided opportunities for non-business family concerns to be voiced and addressed.

The development of individual family members is often a critical part of the long-term planning process. Family members who aspire to join the company or serve on the board may receive special coaching or development opportunities, often through the family council.

Keys to success

The challenges of long-term planning can be overcome with an objective and proactive talent management strategy, assessing those inside as well as outside the family who are the best fit for key positions. The talent management strategy should include the following:

• Clarification of roles in the family and the business.

• A dynamic performance management system that focuses on leaders as coaches.

• A way to measure performance.

• Professional development that is specific to the business and key positions within it.

• Cleanup of sensitive governance issues involving family members and key staff who have been with the business for decades.

Leaders must also hunt for waste that may result from the tendency to keep doing things the way they have always been done. Improvements can be achieved through process mapping, identification of bottlenecks and redundancy, and overall systems thinking.

Innovation is essential for long-term business sustainability. Business models, markets, organizational structures, product mix and distribution channels should be reviewed with an eye toward developing strong, executable innovation strategies.

It is important to focus on getting better, not on being perfect. Some will get bogged down in creating the "perfect plan" and will never get around to making changes. Others, who are anxious to start implementing, will be bored, disengaged or hostile during the planning process. Part of the leadership challenge is to help people organize around their strengths and neutralize their weaknesses.

Contents of the long-term plan

A long-term plan should include a clear statement of the company's mission, vision, values and objectives. What do we want our company to be known for in the marketplace in ten years? How do we want our employees to describe their experience in ten years?

The plan should include an analysis of strengths and weaknesses in the organization's current leadership capacities, strategies, market position, performance, financial standing, legal integrity and governance effectiveness.

Third, the plan should contain an overview of the external threats and opportunities in the marketplace, including societal and marketplace trends, a competitive analysis, a description of the company's brand or reputation, and a review of current and potential strategic partnerships.

Finally, it should include an operating plan, with detailed forecasts. The size of the business and the challenges it faces will determine how complex the plan should be.

In the more proactive cases, there is a calendar for annual and long-term planning, enabling the team to schedule the work that must be done throughout the year to review current progress and prepare for future planning.

There is a window of time for completing an initial long-term plan, which varies from business to business. If the planning process is drawn out too long, the organization gets "planning fatigue" and loses interest and commitment. On the other hand, if the planning process is not comprehensive enough, the plan will not reflect team members' day-to-day reality, also resulting in a loss of interest and commitment. Understanding these factors and the energy of those involved is one of the key success factors.

Sources of help

Companies may find that the long-term planning process is more work than they can do themselves, because family relationships get in the way, an objective assessment is needed or the scope of the project is simply too broad.

Professionals who can assist in the process include a business strategy adviser who can facilitate conversations with company leaders, an estate attorney well versed in managing complex family holdings and an accountant experienced in long-term planning.

Getting the family on board begins with a full commitment to the process from the top of the organization. Engagement is then built throughout the company by seeking input and including team members' insights, concerns and recommendations when appropriate.

Keep it up

Long-term plans should be reviewed regularly. Management guru Peter Drucker often commented that one change in external factors could suddenly render the best long-term plan irrelevant or off-track. The review should also assess whether agreed-upon changes have been executed and track effectiveness in delivering the desired results.

Conducting regular reviews provides a great opportunity for business leaders to learn how their decisions are playing out. This information will be essential for the development of long- and short-term plans going forward.

Ron Price is CEO of Price Associates, a global leadership performance firm ( He is the author of five books, including The Complete Leader: Everything You Need to Become a High-Performing Leader.

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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A fresh new start

The theme of the Transitions West 2012 conference, which took place in November and was sponsored by Family Business and Stetson University, was “Ownership, Management and Entrepreneurship: Building Family Legacies.” Conference sessions focused on three important ways to build for the future: (1) Develop a comprehensive governance plan; (2) Establish a family council to foster collaboration among the extended family; and (3) Teach financial literacy to your next-generation members, and encourage them to be entrepreneurial.

January is an appropriate time to start planning. The new year brings new opportunities, new goals and, perhaps, a new vision. As one family CEO put it, “An organization’s ultimate purpose is to aim for immortality, to create a community that will last not only through your lifetime, but that of your grandchildren.” If your company has already developed a mission statement and a vision statement, take these documents out of the drawer, dust them off and renew your commitment to the family values—or, if necessary, revise the text. If you have not formulated these statements, sit down with your family members and outline what is important in your lives, your business and your community.

Think about how you will bring the next generation aboard. Do you have a family employment policy, and have you structured a comprehensive shareholders’ agreement? Have you given thought to mentoring the next generation? Now is the time to consider how you will prepare your young people for leadership and teach them about wealth management and values.

Another suggestion put forth at the conference was to produce a family history. Writing down the family story helps future generations understand how the company was built, who was involved and what the underlying values are.

Several owners of large family firms described their leadership programs for next-generation members, including internships, summer “family camp” experiences, one-on-one mentoring and junior board membership.

Arne Boudewyn, managing director—family education and governance at Abbot Downing, said the two most difficult issues for family businesses are “resolving conflicts among family members who are in the business, and formulating a succession plan.” A key word here is plan, and the sooner the better. Family councils, among other governance structures, provide a forum for families to discuss leadership criteria and the succession process.

The new year is the perfect time to renew your commitment to your family business. My recommendation is that you resolve to develop or refine your family governance plans. This will help you to more smoothly navigate the challenges that lie ahead.









Copyright 2013 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permssion from the publisher. For reprint information, contact

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An intelligent way to approach risk management

The pain and shock of the recession has made many family business owners wish they’d better assessed the risks they took in boom times. Too many business leaders accepted risk unnecessarily or without adequate compensation simply because they did not consciously address it.

A new way of thinking about risk will be particularly important as the economy recovers. Companies that had cut costs or deferred spending will be seeking to take on new debt or invest in hiring, facilities, equipment or business acquisitions—all decisions that entail risk. An approach we call “AS-IS” can help a business to manage risk more carefully and profitably.

Thinking about risk management

Family business leaders should actively assess risk management in three contexts:

1. Members of the company’s board of directors or advisers should require executives to report on risk management at regular board meetings. Larger boards may set up a committee to work with executives on risk management and give presentations to the full board or family council. The board should press the executives to make risk management a high priority.

2. The executive team should hold regular meetings to address risks. The team should be prepared at any time to report to the board the risks the business faces and how the executives are addressing them. All executives and managers should be trained to think about risk management in a manner consistent with the interests of the owners, as communicated by the board. Family business executives should understand the investors’ level of risk tolerance and make business decisions accordingly. People’s attitude toward risk changes over the years, and the founder’s risk tolerance might be very different from that of later-generation owners.

3. Whenever a large project or transaction is under consideration, the board and executives should confer specifically about those particular risks. This sounds obvious, but many high-profile business mistakes have been caused by a board’s failure to adequately understand the executives’ approach to risk management before approving a transaction. Keep in mind that declining to pursue a transaction may also entail risks that a board must understand and assess.

Six categories of risk

To use the AS-IS approach to risk management, begin by organizing your thoughts and discussions about risk into broad categories based on the core management disciplines:

• Business structure: Owner liability, governance mechanisms, acquisitions, facility projects and exit strategies.

• Marketing and sales: Promotions, existing and new products or services, existing and expanding territories. External demographic changes can create, increase or reduce market risks.

• Operations: How products or services are produced and delivered.

• Information: Communication technology, data storage and retrieval.

• Personnel: Hiring/firing, compensation, succession planning.

• Financial: Distribution of profits, capital contributions, debt and equity. External macroeconomic risk factors can include changes in international trade, inflation and interest rates.

Then systematically consider the risks under each category. For example, under the category of “Personnel,” the business may have risks that include loss of the CEO, employee injury, employee theft, health care costs and retirement plan liability.

In thinking about specific risks, remember that these management disciplines can be affected by external forces, including:

• Regulation: Industry-specific standards, labor laws and taxation.

• Technology: Developments or events affecting communications, data storage and retrieval, product production, and shipping and distribution.

• Management innovation: New business models.

• Acts of God: weather, accidents, terrorism, illnesses and war.

Levels of risk

When you have identified the various risks under each category, assess the probability and consequence for each risk. Risk managers of the family’s financial portfolio quantify probability and consequences in all manner of permutations, but simply coding each probability and each consequence as High, Medium or Low will be helpful. For example, the risk of losing an employee for a day because of a cold has a high probability—in fact, it is almost a certainty—but the consequence is low. In contrast, the probability that a lethal flu epidemic would decimate your workforce is low, but the consequence would be high. Risks that are rated as high probability/high consequence should receive the most immediate and aggressive attention.

The four ways to address risk

After you have identified each risk and assessed its probability and consequences, you can determine how to address it. This is where the “AS-IS” acronym applies. When thinking about how to address risk, consider four different options: Accept, Share, Insure or Shed. The best approach may involve a combination of options. The acronym is contradictory, in a way, because you should always be proactive about risk management and never take a literal “as is” approach.

Accept: You can accept a risk, but you should do so knowingly and make sure you are being fully compensated for it. For example, a new employee with little experience will be paid less than a new employee with a more complete résumé. The lower payroll cost compensates the business for the risk of hiring an unproven commodity. This is also why a lender will demand a higher interest rate for a riskier loan or a life insurance carrier will demand a higher premium for an older insured person. Notice that in each of these examples the compensation for risk is realized immediately, at least in part, through lower costs paid or higher prices received.

Share: You can share risk with another party. For example, when joint venture partners jointly and severally guarantee debt, they are sharing the risk of default. Even when one party indemnifies the other party against a particular risk, a form of risk sharing is involved because the indemnification is only as sound as the ability of the indemnifying party to make good on it.

Risk sharing should be a central focus of contract review when agreements are being negotiated. Many contract provisions that appear to be technical or mere boilerplate may significantly affect the allocation of risk among the parties. For each transaction or contractual relationship, understand how risk is allocated among the parties and assess each party’s ability to bear its share of the risk.

Insure: You can commercially insure against a risk, but you should use insurance intelligently. Understand the risks you are insuring and all the terms of the coverage you are purchasing. In particular, an insurance contract should not contain coverage the business does not need or exclusions that impair the effectiveness of the coverage when applied to the business’s unique circumstances.

Also, do not use insurance to patch over poor business practices. For example, consider how better hiring protocols, employee supervision and data controls may reduce the risk of employee theft, rather than just insuring over it.

Shed: You can “shed” some risk, often by improving or changing business operations. For example, to shed the risk that one of your delivery drivers might drive drunk, you could require breathalyzer tests before every trip. Or to mitigate the risks of injuries on the job, you could ask your insurers to provide a safety assessment.

With respect to a particular project or transaction, you can shed risk through contract provisions, such as a waiver of claims or liability, or by deciding not to proceed with the project or transaction. Note, however, that sometimes the project or transaction itself is necessary in order to shed risk, such as when a business purchases a key vendor to reduce the risk of supply shortages.

Bringing it all together

The AS-IS approach to risk management breaks down elements of the business and its operations that are necessarily interrelated. Any one risk may require a combination of accepting, sharing, insuring or shedding. Furthermore, sometimes the AS-IS options that are used can create or increase other risks or costs.

It takes courageous leadership to create a single table of all the risks you face, but the AS-IS approach provides a framework that enables family business directors and executives to analyze and discuss risk, and to make informed decisions.

Derrick Van Mell is principal of Van Mell Associates LLC in Madison, Wis., a firm that focuses on business and project planning ( Gregory Monday is a partner with Foley & Lardner LLP in Madison, Wis., and a member of the firm’s Transactional & Securities Practice. He also is an adjunct professor at the University of Wisconsin Law School, and co-chair of an American Bar Association subcommittee on Governance of Private and Family Controlled Companies (







Copyright 2012 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permssion from the publisher. For reprint information, contact

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Philanthropy is good business

Many successful family businesses are rooted in strong personal values. In their book Family Business Values, authors Craig Aronoff and John Ward write, “Family values are instrumental in helping to shape future generations….. Shared family values also contribute to tangible success such as inspiring performance, supporting long-term vision and shaping a business’s response to a crisis.”

Philanthropy is a way to demonstrate and extend family values and position both the company and the family as thoughtful leaders in the community. Giving back and being a good corporate citizen can create a “feel good” moment for the family and potentially garner positive public relations for the business. But this will happen only if family members remember that a company’s philanthropy is a business decision first and foremost, not an extension of family members’ personal interests or passions of family members. Corporate philanthropy must have its own process and strategy, defined and driven by the board or whoever makes the major business decisions in the company.

Kelin Gersick, a preeminent consultant to family firms and family foundations, points out that when it comes to philanthropy there are three distinct streams of activity:

• Personal giving. The individuals and branches in the family give to organizations or issues of particular importance to them.

• Collaborative family philanthropy. This often takes the form of a family foundation and requires a degree of consensus among family members (or those members who want to participate as a family).

• Corporate philanthropy. A family-controlled business supports specific causes or organizations with funds or other forms of philanthropy.

“Of course, there may be some overlap wherein some of the same causes are supported,” says Gersick, “but good governance requires honoring the differentiation between business and family structure, no matter how many family members are in the company.”

Gersick, who is the lead author of Generation to Generation: Life Cycles of the Family Business and Generations of Giving: Leadership and Continuity in Family Foundations, notes, “All the principles of good corporate governance practice that make for good business apply to philanthropy. What is most important is to remember that no matter how much value a family places on charitable giving and good citizenship, when it’s the company’s philanthropy it is funded by the company’s operating revenues and therefore must reflect the values of the company.”

Launching a corporate philanthropy program

Corporate philanthropy should advance the company’s business interests while at the same time substantiating its image as a caring member of the community, a good corporate citizen and an enterprise that’s committed to making a difference in the world. If implemented correctly, the philanthropic efforts can yield increased market penetration and brand recognition as well as higher customer approval ratings. The initiative also can create good will among employees, leading to greater retention and empowerment, and make the company more attractive to prospective employees.

A corporate philanthropy program is no different from any other departmental activity. It needs clear directives, an action plan, clear measurement criteria and a budget.

Here are some tips on initiating an effective corporate philanthropy program:

1. Decide where to “house” the program. The marketing or public relations departments are often assigned to manage the program when philanthropy is tied to brands or market penetration. Sometimes philanthropy falls to human resources or the executive offices.

2. Assign management and staff to support implementation. It’s also important to create a succession plan to ensure the sustainability and continuity of the program.

3. Assign a committee to define goals. Senior management or the ownership group (and/or the chair of the board of directors if there is one) should be represented on the committee to signal support for the program from the top. In addition, the committee should include the manager of the department overseeing the program. Rank-and-file employees should be represented on the committee to help achieve staff buy-in. If the program is not housed in the marketing or PR department, these entities should be represented.

4. Create a charitable mission. The mission should tie in with your company’s products or services or represent the greatest needs in the communities you serve. Having a focus for the program avoids a scattershot approach to philanthropy and provides a baseline for measuring the return on investment.

5. Determine the parameters of the program. What is its purpose? (Examples: increased brand recognition, stronger relationships with local communities, better employee relations.) What is the focus? (Examples: regions where your products are sold, populations that reflect your customer base.)

6. Determine the extent of resources available for the program. What is the company’s financial tolerance? Can it afford to make cash contributions as its primary charitable activity or underwrite in-kind or pro bono services? Would donations of products, or a fully supported employee volunteer program, be possible? Many companies opt for more than one form of contribution, such as employees’ time as well as corporate dollars. If your company plans to match employee donations, make sure to set a ceiling.

7. Make sure there are clear and measurable parameters for pro bono or volunteer work. Can employees choose the organization or cause they want to work with? If so, how many hours will be the company pay for? Have a procedure in place to track and report volunteer time.

8. Solicit suggestions from employees. Seeking employee input involves them early on in the program design. This is particularly important if the company decides to support organizations or causes that align with its markets, products or services.

9. Incorporate the philanthropic activities into the company’s marketing materials, website and employee information. This kind of visibility reinforces accountability and creates good internal and external PR that reflects the “heart” of the company. If there is an annual report, include the outcomes of the company’s philanthropy. The annual report can also include profiles of the organizations or causes that the company supports so that all stakeholders are aware of this aspect of the business.

10. Document everything! Neal Barnett, a partner in the law firm of Sills, Charboneau & Barnett in Troy, Mich., points out that there are tax benefits for a company’s philanthropic activities so it’s critically important to have a paper trail for tax purposes. According to Barnett, “If pro bono or volunteer time is underwritten by the company, then it’s important to track the hours donated. Use the total hourly rate for employees, not just base salary. The cost of products donated is the wholesale price, not the market price.”

11. Make sure the organizations you support are properly vetted. Thorough due diligence reduces problems later on. Make sure you know whether each group’s Form 990s (IRS forms for tax-exempt organizations) are current, and whether their missions align with your company’s mission.

12. Annually evaluate the program’s viability and impact. Should you be considering other organizations or issue areas where there is more immediate need? Have your company’s markets or demographics changed?

Finally, a few things you should not do:

Don’t initiate a philanthropic program solely to offset negative publicity or to detract from legal issues. It will only call more attention to the problems.

Don’t treat your philanthropic program as a short-term investment. It takes time to see the results of the effort.

Don’t transfer assets to a foundation or charity to protect them from third-party claims. This not only is fraudulent but also can expose the company to litigation.

Giving has many benefits

In a family enterprise—particularly in a multigenerational family business—the company is often a dominant aspect of the family’s identity. Adding a philanthropic track to the enterprise not only creates a significant return on investment in terms of the company’s relationship with its customers and employees, but also can reaffirm the core values of the family.

A well-designed philanthropic program can strengthen family bonds and help the company achieve its business objectives. Best of all, it helps to make the world a better place.

Susan Winer is senior vice president and one of the founders of Strategic Philanthropy Ltd., a global philanthropic advisory practice based in Chicago (







Copyright 2012 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permssion from the publisher. For reprint information, contact


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