Changing the Narrative

P2830716.jpgThe Smith Family Business Initiative hosted a roundtable led by some of the leading women across family businesses in and around New York as well as students of the Johnson School of Management. The roundtable was designed to celebrate the advancing female leadership in family enterprises as well as discuss compelling issues that continue to plague the journey of capable women leaders aspiring to scale new horizons. The roundtable was a splendid amalgamation of perspectives of women of diverse professional and academic backgrounds, age groups and sensibilities. A plethora of topics were touched upon ranging from implicit glass ceilings in family enterprises, issues around inheritance and mentorship. The overarching intent, however, was to encourage this changed narrative with women increasingly occupying key positions in the C suites of both private as well as public enterprises.

Historically, in many nations around the world, the conversation around inheritance of the family business and often the family fortune was restricted to the male off-springs. The women at the table admitted that their previous generation exhibited some inherent biases towards their male counterparts while they were given the leeway to “explore other professions” often implying a barrier to entry in the family business. This phenomenon gave rise to an implicit glass ceiling at the entry level in family enterprises for women. Many women leaders at the table felt that the gender stereotyping and disapproval is more intense in predominantly male drive industries like manufacturing and construction. The obvious outcome of this bias is the additional liability for women to prove their worth to their parents to earn their rightful seat at the table. The young blood at the table, although agreed with some of these historically derogatory trends, admitted that a wave of change is already underway. Women across the world are out to smash the glass ceiling through perseverance and confidence in every sector.

In many interviews, women are often asked how they manage to maintain a work life balance, but somehow men are never asked this question. Women are burdened with the unnecessary expectations to compromise their professional life to draw a balance in their personal life. But the distinction in family businesses between personal and professional lives is even more blurred so women across the world are using different tactics to counter these expectations. Women are increasing involving their families in conversations about their family businesses, especially when they are the only ones involved in the family enterprise in nuclear families.

Another critical topic discussed at the conference was whether parents can be effective mentors at family business. The unanimous conclusion at the table was to differentiate between parenting and mentoring. While parenting can mean providing general guidance to inheritors in paving their learning curve in a family enterprise, mentoring requires a more structured and objective approach. A commonplace conflict in family businesses is the tug of war between traditional methods of running the business versus the disruptive strategies newer generations bring. It is critical for the next generation women entrepreneurs to embrace some traditions to maintain efficient continuity and mutuality of respect with parents, but it is also critical for them to nurture their own style of working and effective outside mentorship can enable this aspect of small governance in family enterprises.

Overall, the experience of being at the table with successful and engaged women from the family business world was unmatched. Their professional tenacity and yearn to overcome every gender barrier and emerge as leaders worthy of emulation is remarkable. With roundtables like these, schools like Johnson are incubating next generation leaders of family enterprises across the world.

Surabhi Chaturvedi is a 2019 MBA Candidate in the Johnson Graduate School of Management. She represents the second generation in her family’s business, one of the leading Caterpillar dealers in India.

Family Legacy: Privilege or Burden?

P2830846Held in M&T Bank headquarters in New York City, the Women and Family’s Business Roundtable was an intimate session with a group of 30 women in the various stages of their family business – running it, exited in, thinking of entering it and so forth. What united the entire group was the privilege and probably burden, of being part of a business legacy.

The morning opened with welcome remarks from Kimberly Eddleston, ’95, Cornell Family Business Scholar, Professor of Entrepreneurship, D’Amore-McKim School of Business, Northeastern University and Daniela Scur, Postdoctoral research fellow, MIT Sloan School of Management. Both of them touched on the challenges and difficulties that as a female faced in family business succession, and how can one overcome that. Each participant chimed in on their own experiences, and how each of them came into the business in their own way and the extra effort they had to put in, just to prove their capability to manage or run the business.

The second session was moderated by Margarita Tsoutsoura, Cornell University, and Stefanie Kasselakis Kyles, Vassilaros & Sons Coffee, and they discussed how in family businesses, the lines between work and family were often blurred. The daily operations and problems at work were often brought up at the family dinner table, as recalled by another participant, Surabhi Chaturvedi, MBA 19’. This allowed the next generation to develop a keen sense of what running a business meant, at a very young age. However, working with family had some drawbacks too, as shared by Stefanie. She mentioned how everyone in her family called her about the business, at all hours, to share their opinions, despite not being directly involved.

During lunch, Niki Russ Federman, from Russ & Daughters shared her own personal story of how she came to enter her family business, started by her grandfather with simply just a pushcart. Everyone’s story is truly different, and hers was one of self-discovery and meandering paths before she finally came back into the business. Russ & Daughters is one of my favorite restaurants in the city, and to hear the legacy and heritage from her perspective is truly like reliving a piece of New York City history. She said – “I’m so glad that my mother had the foresight to save her part of the business so that it gave me an opportunity to return when I wanted to.” That truly left an impression on me, that her mother gave her a chance to come back to the business when Niki was ready. Whether we admit it or not, we truly are products of our families, parents and their efforts.

After lunch, Alvina Lo, Chief Wealth Strategist from Wilmington Trust discussed her experience in advising clients on setting up trusts and foundations. It was truly interesting to hear perspectives from various spectrums: with a structured and formal approach to encourage the next generation (as shared by Kelsey, the 4th generation in her family business); to a more informal way, as told by Chelsey Kingsley, CEO of Kingsley Made, by simply having conversations with her children and instilling in them a sense of ownership through seeing furniture manufactured by the company around Ithaca.

The last session of the afternoon was led by Kimberly Eddleston, Northeastern University and Niki Russ Federman, CEO and Owner, Russ & Daughters, who discussed how female leaders impacted the business differently. It was clear that females had made strides in the corporate environment over the past decade, yet so far from having an equal number of females in the boardroom, and as senior executives. The participants also brought up how being in a family business could possibly be advantageous for females to advance professionally, as opposed to being in the traditional big corporate environment, as being in a smaller environment required each individual to be more flexible with all kinds of roles and allowed individuals to take on more responsibility.

Overall, I found the entire day to be extremely invigorating, and it was really interesting and insightful to hear so many different perspectives on the changing role of females in family businesses today. In Asia, where I’m from, many family businesses still are figuring out their governance structure, and how to successfully transition from one generation to the next. Listening to these women in the roundtable, who manage family and business so well, has been very encouraging, for my own personal journey forward in figuring out how to balance and integrate both professionally, and personally.

Jade Neo is a 2019 MMH Candidate at Cornell University, as well as a 2019 MBA Candidate at CEIBS in China. Her family’s business, Hai Yong Engineering, started by her father, is in the construction and real estate business in Singapore. 

The baton has been passed

P2840752It’s hard to believe that there was a time when Niki Russ Federman, now co-owner of Russ & Daughters, considered walking away from the family business for good. Today, the New York City staple serving bagels, smoked fish and other “Jewish appetizing food” is a beloved brand that includes sit-down restaurants at its historic East Houston location and at the Jewish History Museum in Manhattan, a bakery, a retail counter, and an e-commerce arm, with plans for expansion.

But the business had incredibly humble beginnings—it began as a barrel filled with herring sold on the street by Federman’s great-grandfather and Polish immigrant Joel Russ. As the business evolved to a pushcart, then a wagon and finally, a storefront, Russ knew he needed help. He brought in his three daughters—one of which was Federman’s grandmother—and the family business was born. As the store was passed down from generation to generation, Federman knew she’d one day have to decide whether or not she’d want to continue the tradition, but she delayed making the choice.

“I used to think that if I just do what my grandparents used to do, then that means I somehow failed in this American individualistic ethos that we all have,” Federman said at the TK TK TK. Her father had been running the business since the 70s, but by the early 2000s, he gave her an ultimatum: she had to take over, or he would sell it.

It was a breaking point for Federman, who was still unsure that she wanted to dedicate her life to Russ & Daughters. She applied and was accepted to Yale Business School to buy herself some time, but realized that a business degree wouldn’t solve her internal dilemma and left the school after a semester. By that point, her cousin, Josh Russ Tupper, had expressed interest in running the business and it seemed that Federman finally had a way out.

But it was this very shift in responsibility that awakened something. “I left the business, and I left business school. I was hiding out in New Haven, Connecticut. And at this point, because there were no expectations on me,I was able to look at the business with a fresh set of eyes. I began to realize that this is a tremendous gift to be part of a lineage like this. Small businesses are disappearing, and there’s such a loss of character as a result,” she said.

By 2006, Federman was back in the family business as co-owner, alongside Tupper. Together, the two have been unstoppable, expanding the business across multiple locations and formats. Their latest endeavor? An 18,000-foot space for Russ & Daughters at the Brooklyn Navy Yard, featuring a sit-down restaurant, retail counter, and shipping business. “I love what we’re doing today,” she said. “I love the way in which it forces me to live in the past, present, and future all at the same time. The baton has been passed.”

We’re Not Done Yet

P2840828On September 27, attendees of the Women and Family’s Business Roundtable gathered for dinner at Russ and Daughters Café in New York City. The women were mostly members of or were affiliated with family businesses. Dinner conversation ranged from growing up female in a patriarchal society to the Kavanaugh hearing that occurred that day, topics that foreshadowed the tone of the next day.

The roundtable opened with a session on glass ceilings and gender stereotypes. Daniela Scur discussed key points of her research – that families were more likely to keep family businesses if there was at least one son and that daughters are more likely to be CEO’s if there are no sons. The attendees weighed in on the roots of these findings. There were countries where it is illegal for women to inherit businesses, adding a concrete layer to the glass ceiling. The session ended with the conclusion that management should start from home and society will naturally follow.

The second session on “When Work is Family and Family is Work” started with a discussion on work life balance. Most of the women in the room grew up with parents who brought a business mindset into parenting. This mindset continues with them today as they go about their careers. The table then discussed ways to navigate the workspace given the blurred line between family and business. Some tips shared were:

  • Work outside the family business first to gain gravitas and a sense of best practices.
  • Study something related to your family’s business to carve out a space for yourself.
  • Do not call your parents mom or dad, instead use their names or initials.

Niki Russ Federman of Russ & Daughters shared her own story over lunch. Niki narrated the story of humble immigrant beginnings to the creation of a store that anchored a sense of history in a city where the only constant is change. She discussed her journey into leadership that had to balance history and tradition with innovation and relevance. This brought about Russ & Daughters Café, new stores, an online store, and bakery.

Alvina Lo and Kaleen Allyn moderated the third session on parents as effective mentors. The group dove into a discussion on the differences and norms between mentoring and parenting. It was shared that mothers are normally tougher on daughters and that fathers normally underestimate daughters. The parents in the room weighed in on the importance of highlighting the mother’s career to normalize it among the children. It was also important for parents to include daughters in discussing the business and making small decision from a young age to grow a sense of ownership.

The final session was a presentation on Realizing Impact of Female CEO’s and Executives by Kimberly Eddleston. She discussed that women leaders extract more synergistic environments that emphasize people and relationships over status and money. It was also mentioned that people tend to associate classically masculine traits with leadership but prefer classically feminine traits in their leaders. This brought about opinions over gender normative language.

Through the day, the room remained united in its frustration and determination to create a world where women could be powerful without the implications of today’s society. I left with the words “we’re not done yet” in my head.

Kelsey Cheng is a 2020 MBA Candidate at Cornell University and an active member in her family’s business, Bounty Fresh Food, Inc. in Malaysia. 

Erin Kelly joins the Smith Family Business Initiative as Assistant Director

Erin Kelly headshot

We welcome Erin Kelly to the Smith Family Business Initiative as our new Assistant Director. Erin will focus on expanding the campus presence of SFBI and related student activities, both at the undergraduate and graduate level, as well as strengthening many of our outreach programs.

Erin Kelly, BFA, MS

Erin is originally from the Central New York region and joined the Cornell community in 2006 when she returned to the area after several years living and working in Manhattan. Her time at Cornell includes both contract and endowed positions, an invited rotation with Organizational Development, two years of service with Cornell CARES, and three years chairing the CALS Core Values Awards Committee. Erin has been with the Johnson School since 2016 where she most recently served as Academic Manager of the Executive MBA Metro NY program there.

Prior to entering into higher education, Erin worked for a series of family-owned businesses ranging from small and local to multi-faceted and globally-proportioned. This experience resulted in practical familiarity with the unique business complexities relevant to students, owners, and stakeholders associated with family enterprise. Erin’s firsthand experience with family business dynamics, twelve years at Cornell, and a Master of Adult Education translates into a distinct mix of creative thinking, administrative experience, technical expertise, and practical knowledge. Already familiar with the Smith Family Business Initiative (SFBI), Erin embraced the opportunity to use her uniquely applicable talents and experience to contribute to the innovative work being done by SBFI to provide family businesses with resources vital to both their immediate and long-term success.

Erin received her BFA from Syracuse University and an MS from Elmira College. Erin enjoys traveling, meeting new people, listening to their stories, and learning about them. She has three children and resides with her family in Cortland, New York.

Notes from the Family Innovations Summit

Written by Pierre duPont

cornell-2018-0523-0105Thanks to Daniel Van Der Vliet and Cornell’s Smith Family Business Initiative for a stellar event earlier this week. This was a day of private discussions between family-owned businesses of all types and sizes – from some of the largest in the world with 20-50 family members to some small and with only two or three family members.

Across all the sessions, I heard one overriding message: communicate with your family about your business and understand your family’s views and needs – now. Do it openly and as soon as possible, as the business starts and grows, and even if the business is large or it appears to be too late to start such communications. And do this whether you think your family (and the business) needs it or not.

Another message seen clearly: many families with successful businesses have visible and not-so-visible dysfunction, and that dysfunction can create nearly-insurmountable hurdles for continued success or a leadership transition to the next generation. And yet, dysfunction CAN be overcome as we heard several times.

In one case (all will remain anonymous given the incredible amount of openness, and even raw emotional pain, expressed by some of the participants) we heard of several older generations of the leaders in a family-business who appeared to want to limit the continuing success of the company – the next-gen leader overcame this across ten or twenty years through perseverance, many creative ideas, standing ground when faced with strong family pressure, and even by walking away to force the family’s approval of the desired business-change. The result? A household-name business expanding in new directions and generating new levels of success, to the benefit of the whole family.

In another case, we learned of a family faced with discord amongst the older leaders at the top of a large and prominent global company. The discord was clearly hurting the business, so the next-gen came together as a whole to drive leadership changes and new family-control-mechanisms which proved to be the right steps for all generations and for the business itself.

We learned of family-communication done well, too. There were several examples of 20-something and 30-something children who were given leadership roles in their family businesses, and who then rose to the challenges of evolving markets and changing technologies – with appropriate guidance from their parents to the youngers, and from the youngers to their parents.

And we heard an illuminating example of a very prominent family where the elder-generation cousins who lead the business meet regularly to have their business arguments and ‘family squabbles’ behind closed doors, rather than in the public view.

Tactical advice was given by two family-leaders regarding how to strengthen multi-gen families and their businesses, and how to head-off or repair the dysfunction that can arise: engage external family-business advisors/consultants/therapists early, whether or not you think you need to do so today. I was pleased to hear this said several times, confirming the value such external and independent advisors can have – partly that value arises because such advisors have no ‘horse in the race’ (and be sure to look closely for that – sometimes there are hidden agendas and unclear profit-opportunities for external advisors), and partly it arises because the better advisors have seen and learned from many situations.

Contact Daniel if you are a family business who might like to participate in future events like this week’s. And even if you don’t want to participate, I am sure Daniel will welcome calls (as do I 🙂 from family-business owners (whether you are the older generation or a younger generation) to talk confidentially about successes and challenges and failures – lessons can be identified and shared, and paths-forward found, just by talking it through with a suitable outsider.

Pierre duPont is an advisor, entrepreneur, investor, partner and business owner.