In this issue
Some women who have taken over a business from their fathers never even expected to work in the family company, let alone become the CEO. Yet once they took the helm, those daughters discovered that they have the right skills, experience and values to guide their companies through the transition to the next generation and beyond.
At a conference table in the sleek, contemporary headquarters of Friedman Realty Group, a real estate investment and management firm in Gibbsboro, N.J., Brian K. Friedman and his son, David, are reflecting on issues that have taken center stage for them: analyzing risk, their business future and structure, as well as continuity, succession planning and exit strategies.
Most family business owners have heard these statistics: 30% of family businesses make it to the second generation and only 13% make it to the third generation. This often-repeated statement, which is widely accepted as fact, actually is wrong.
Ever wonder if there might be a secret sauce that, if poured on family members, would make them easier to get along with? Or maybe a specially formulated epoxy that could repair broken family relationships? Many families are searching for something akin to great-great-grandma's secret lasagna recipe—the one that had the ability to bring everyone together from near and far, even if only for one joyous evening.
In 1955, Herald Smith lost his management job with a trucking company and decided to strike out on his own.
His son John M. Smith was 6 years old at the time. "That was scary, particularly as a young child," John says. "But when my father started to work again, things immediately went back to normal. My dad got started with no money and no credit, and he made a success of it the first year. I had no feel for the kind of risks he was taking."
No matter how big or how small a family company is, its leaders can benefit from the perspective of experienced independent directors. Joseph H. Astrachan has been serving in that role since 1997, when he joined his first board.
This spring, I lost my dear 95-year-old father, Paul Uhlmann Jr., the second-generation patriarch of my family business in Kansas City. He was an amazing and quite beloved husband, father and grandfather. Words used by the community to describe my father all had overlapping themes—true gentleman, quick-witted, intelligent, elegant, kind and cultured. He was considered a renaissance man and was known for creating clever poems and songs for his friends and family to commemorate special occasions.
Have you put business transition on your family meeting agenda? All too often, succession plans are not slated for intergenerational discussion.