Taking the leap
What should your business be doing differently? How might technology change in the next five years, and how would those changes affect you? What might happen in your markets that would invalidate your business plan? Who will be your next wave of competitors? Should you diversify your holdings? Have you considered all potential growth opportunities? Do you have the right personnel to manage these changes?
When is the last time your leadership team sat down and considered these questions?
Longtime readers of this magazine have seen many articles warning that complacency is a deadly sin. Industries that have made families wealthy for generations are disappearing. With survival on the line, it's essential to think about what the future might hold and plan to adjust accordingly.
This often requires families in business to take a leap of faith—to break from familiar business models and venture into terra incognita. This issue features several examples of business families who made such a leap. As these varied family stories indicate, a plunge into new territory can take a number of different forms.
• Kubin-Nicholson, a Milwaukee printing company that had operated exclusively in business-to-business markets as a printer of large-format advertising, entered the business-to-consumer space with the launch of Chasing Paper. The new venture, launched by young third-generation member Elizabeth Rees, makes removable wallpaper and has moved the family business into interior design. Among Rees's challenges, she tells reporter Hedda Schupak, was the need to overcome resistance from the company's old-school employees.
• Several family ownership groups have bucked convention and installed a non-family member as chairman of the company. These families have recognized that the company can best achieve its strategic goals with an experienced executive with no blood ties to the founder in the chairman's seat. As Dave Donelson points out in his report, an independent chair can help effect changes that are needed to move the business forward but that can raise sensitive issues within the family, such as replacing family members who hold executive positions.
• Some families, after a no-holds-barred assessment of strengths, weaknesses, opportunities and threats (commonly known as a "SWOT analysis"), decide to leap out of the family business by selling it—to a strategic or financial buyer, or to the management team or to employees through an ESOP. A report from Columbia Business School and U.S. Trust, discussed in the Openers section of this issue, found that business owners who were the most satisfied with the results of a sale were those who prepared well in advance.
As I have noted many times before, selling a company need not signal an end to the family's shared business activity. Take our cover story subjects, David Merage and his family, profiled by Deanne Stone. After the sale of Chef America Inc., they became investors in the food and beverage industry, as well as active philanthropists, continuing the family's impressive legacy of success.
As the examples in this issue show, it's very important to look before you leap—but, if the timing is right, put aside your fears and take the plunge.
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