In this issue
Although many people have encountered MacLean-Fogg Co.’s products, they probably haven’t noticed them, unless they’ve looked at the hardware that sits atop telephone poles or the parts inside car exhaust systems and transmissions, such as gear blanks and wheel nuts.
On Thursday, July 19, 2018, the family leaders of Vermeer Corporation shifted gears from marking the 70th anniversary of the business to managing a crisis after a tornado struck the company’s Pella, Iowa, headquarters.
When a family experiences a liquidity event, such as the sale of the family business, they may feel as if they’re entering an uncertain phase of life.
The decline of a family business can be heartbreaking. Often the extended family loses much of its fortune and the financial security of future generations is at risk. Why does this happen, and, if you are a family member who is not running the business, how do you prevent the decline? Minority family shareholders as well as controlling owners can learn to identify early warning signs and take steps to implement solutions that will transform risk of decline into success.
As I write this, rumblings of an impending recession are getting louder. In January, Deloitte released a survey of 147 corporate chief financial officers that found 55% expected a U.S. recession by the end of 2020. The CFOs’ optimism about their own companies’ prospects dropped to the lowest level in nearly three years, according to Deloitte’s CFO Signals report. The finance chiefs predicted lower business spending and higher labor costs.
Murray Berstein, founder of Nixon Medical in New Castle, Del., was determined to take the right steps to ensure the future of his medical apparel and linen business when he and his sons hired a consultant in 2002. The consultant began outlining the most effective methods to pass the enterprise to the next generation.
Murray listened intently, his eyes filling with tears.
Our family relationships and our feelings about money bear some interesting similarities. A lifetime of interactions with relatives, especially in a business environment, can create complex relationships with a range of strong emotions. We all have heard siblings talk about their childhood in ways that would make us think they were raised under separate roofs. Each individual is affected in unique ways by their interpretations of childhood events and the inevitable drama of youth.
One of my four granddaughters had her fifth birthday party recently, and as I watched the cousins play together, I realized that one day one of them may become CEO of our family business. When my grandfather was running our family flour company in Kansas City, women were not expected — and definitely not encouraged — to enter the business. Granted, I had a brother and two male cousins, so succession was somewhat guaranteed. Things have certainly changed with respect to women in business since then.
Installing professional governance in the family business helps take personal dynamics out of company decisions and strategic planning. Objective advice from independent board members can help prevent family disputes and ensure decisions are being made in the best interests of the business.