In this issue
Near the beginning of Roy Goodman’s interview for the position of chief financial officer at Luck Companies in 2008, CEO Charlie Luck posed a surprising question. “Most CEOs ask you about some of your functional capabilities,” Goodman says. “One of his first questions was, ‘Tell me about your leadership.’”
The question made Goodman, a finance professional who felt he had reached a plateau in his career, pause. He told Luck that he wondered why “many of the people I have worked with in my career would run through walls for me—and many wouldn’t.”
Family businesses have been the backbone of the American economy for years. Entrepreneurs entered industries with low barriers and grew prosperous enterprises through ambition and perseverance. But the start of the 21st century saw the sale of many family-owned businesses as second- and third-generation owners chose to monetize their investments. The family companies that remained found themselves competing against companies where sales growth and EBITDA, rather than family values and long-term profitability, were the overriding goals.
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.
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.”
After Facebook’s blockbuster IPO filing, the business press overflowed with articles about the value of social networks. Lamentably, not enough attention is being paid to the value of social capital.
Wikipedia defines social capital as a sociological concept that “refers to the value of social relations and the role of cooperation and confidence to get collective or economic results.” In other words, your organization’s financial performance is affected (a) by the way that people in the organization treat others and (b) by the organization’s involvement in the community.
Father-Daughter Succession in Family Business: A Cross-Cultural Perspective
Edited by Daphne Halkias, Paul W. Thurman, Celina Smith and Robert S. Nason
Gower Publishing, 2011
311 pp., $119.95
Also available as an e-book
Generation of family ownership: Fifth.
Company size: We have distributors in 40 states (and indirectly in all states except Alaska and Hawaii), and in ten foreign countries.
Number of employees: 12. We outsource manufacturing and distribution to other companies and work with brokers. Every day we have hundreds of people working with us. In some ways we’re virtual, but we own our brands.
I need some help in setting up our company with new owners (four siblings) since my dad’s passing. I don’t know where to start. Can you counsel me on the changes that need to happen after a transfer of shares to the next generation?
Last month, my husband and I blew into Chicago for the wedding of the son of one of my dear friends from college. While we were visiting, we strolled around the city taking in the natural beauty of the lake as well as the wonderful cultural institutions that dot the landscape. Chicago is an exciting, engaging city, which benefits from the many family businesses that form the backbone of the business community.