In this issue
This year marks the 100th anniversary of the outbreak of the First World War, the most horrific war in human history up to that time. For four long years combatants dug in for indecisive trench warfare and industrialized slaughter that claimed 17 million lives. The optimism and faith in progress that had energized Western civilization before the war gave way to disillusionment and the "lost generation" afterward. Out of the rubble of World War I followed a second global war and then a third Cold one. To this day historians debate the causes.
Should every challenging family business relationship or dynamic be repaired? Some family disputes are not fixable. However, even if an educated guess says they are, could it be that in some circumstances attempts to resolve the underlying issues might actually be detrimental to the family and business?
Sometimes it seems easier to leave the running of the family business to professionals who earned their stripes working in the industry. But the most effective family businesses are those where the family, the board and the management form a true partnership. All three do their part in ensuring that the business strategies are being executed and are part of the important conversations taking place in the boardroom.
Success for a family business cannot be packaged in a neat bundle. There are too many nuances; family dynamics, succession, business revenue and multigenerational financial health all play into the mix. All companies have a web of challenges, but family businesses must balance these complexities and many other elements to capture growth without sacrificing family-oriented goals.
What kind of feedback do you provide to your family and non-family employees? How much of it involves reprimanding or taking corrective actions? How often do you offer praise or encouragement? How often do you express gratitude?
There are many reasons why a family company ceases operations, but one routinely missed by family business boards, CEOs and advisers is the failure to view the family business as an "investment asset" rather than an "operating entity." This often results in disruptive family dynamics over time, since individual shareholders have differing investment objectives and needs. It also exposes families to inappropriate investment concentration and unrecognized "tail" risks, and causes them to incur lower family shareholder realized return with less liquidity.
Italian immigrant Philip Martino, a shoemaker who became a prosthetist, founded United Limb and Brace in Boston in 1914 with two partners. When a number of people suffered amputations after the 2013 Boston Marathon bombing, they turned to the Martino family's company, now called United Prosthetics, for help navigating their future.
Generation of family ownership: Eleventh.
About the company: We're in about 120 countries and distribute mainly through importers and wholesalers. We also have subsidiaries in a few larger countries and our own importers and distributors. We have around 1,200 employees, with 50 of them in the U.S.
Years with the company: Seventeen. I acquired my first title, executive vice president in the U.S., in 2000, and in 2004 I became CEO of that subsidiary. In July 2013 I took over from my father in Austria.