2017 FEUSA Family Business Survey

downloadFamily Enterprise USA is a 501 (c)(3) organization dedicated to educating lawmakers and growing public support for family businesses across America. Each year, Family Enterprise USA surveys business owners across the country to learn about their challenges and ensures that their voices are heard on Capitol Hill. The survey is open from February 23 to March 17.

This year, more than any year in the past two decades, family businesses are at the forefront of many discussions in Washington D.C., and legislation impacting them will happen faster than it has in many years. For that reason, it is critical that legislators hear from family businesses more than any other years in the past.

Similar to last year, the 2017 FEUSA survey topics will include:

  • Awareness of the number of jobs created by American family businesses
  • The estate tax’s devastating impact on family businesses
  • Competition and challenges facing family-owned businesses
  • Public economic priorities
  • Philanthropic giving and community involvement of family businesses

They are seeking family business owners who would be willing to contribute to this year’s survey. All participation is confidential and anonymous.

If you would like to participate in the 2017 survey, please click here.

If you like to read the 2016 report, please click here to download it.

What To Do When Your Path In Life Is Chosen For You

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I am a typical twenty-three-year-old who just finished my first year in the workforce. I’m adapting (and sometimes struggling with) post-grad life in solidarity with my peers: I’m learning how to cook, I’ve lost at least 40 percent of my sock collection to the laundry, and I’m trying not to screw anything up at work. But what makes me atypical from my contemporaries, who intend to stay at their current jobs for the next two, maybe three years, is that I intend to keep my first job for the next forty-plus years.

When I arrived at work on my first day in the “real world,” and every day since, it was my name on the door in big, bold letters. I wish I could say this is because I have done something extraordinary this year to bring meaning to that name, but its reputation has been built by many Gersons before me, first by my grandfather and now my father. It’s a lot of weight on a twenty-three-year-old shoulders. An eighty-two-year legacy, more than one hundred dependent workers, and an expectation that it will be my responsibility to care for all of it in the decades to come.

Growing up, this duty was met with a lot less trepidation. If asked what I wanted to be when I grew up, I would joyously reply that I knew I was going to be the CEO of Gerson & Gerson, Inc. Perhaps as a result of a childhood shaped as much by family events as the ups and downs of the fashion industry, the business became an integral part of my identity. With the understanding that the name Gerson had meaning beyond my nuclear family—a reputation for ability, integrity, and honesty—I spent most of my childhood trying to achieve these ideals. With each nomination to the class council, captainship of a sports team, citizenship award, and finally an acceptance to an Ivy League university, I continued to crave validation.

The privilege of having a family business is a double-edged sword. The reputation of the next generation’s perceived entitlement is an insecurity I have combatted my entire life. I have long accepted that I would need to work harder than my peers to receive the same recognition of ability for my roles, especially since I belong to a generation that is largely characterized as entitled and narcissistic. At some point, I realized that the notion that I could be recognized purely on my own merit was unrealistic. The reality is that I am in this very extraordinary professional position due to my name, and not my achievements. The best I can hope for is that by virtue of my competence as a student, as well as my dedication and work ethic, that the people around me will view me as worthy of the entitlement.

I graduated college at twenty-two, armed with a business education and a lifetime of industry knowledge. I entered the firm just one month after graduation. Some might call my inexperience an impediment, but I view my ignorance as an asset. I will never know as much as my predecessors do about the business they currently run, but asking disruptive questions and bringing a fresh perspective is often my most valuable contribution. The freedom to ask any question that might seem otherwise embarrassing, without fear, has allowed me to acquire both an understanding of the industry and a chance to make small improvements along the way.

My education had taught me the practical skills of business planning, and I was fully prepared to leave my mark on the company with grand ideas of modernization and branding. I discovered that I was not only stepping into a business, with its operational and industry challenges, but I was also inheriting a culture: a rich company history that has engendered a culture of dedication and honesty but at the same time, inflexibility and entrenchment in a “way to do things.” When an entity has been building momentum for so long, the slightest change in direction is difficult to achieve. This is exasperating to an energetic, entrepreneurial thinker eager to chart a new course. It is also something I have grown to regard as the most precious asset in our firm. The invaluable passion for protecting and maintaining something we have all worked to build must be met with enormous respect. I learned that effecting change within the company must strike a constant balance between honoring tradition, maintaining the culture, and shifting toward a new vision.

Ironically, the legacy that I initially found so daunting has become the most comforting part of this journey. I arrived eager to prove myself and my abilities, spent so long focused on combating an impostor complex, and finally found something much greater. Being third generation to a company is not only my journey; it is the story of the past two generations, the people who work for and with Gerson & Gerson, who have become part of our family along the way, and hopefully the generations who come after me. Letting go of my ego and allowing myself to serve the company and the people connected to this legacy is both my greatest challenge and my most powerful motivation.

My love and dedication to Gerson & Gerson are what has helped me to gain credibility within the firm, to push myself to accept this position at a young age, and to be part of the 13 percent of third generation family businesses that succeed. I strongly subscribe to the notion of following your passions as a means for success, as belonging to a family business goes far beyond seeking financial gain. There are endless ways to work toward particular interests within the company; focusing on branding and innovation in small markets is where I have found my satiation for an entrepreneurial and fast-paced environment. Beyond personal interests, it is also the opportunity to work in a place that is worth fighting to protect. Where a business is more than just business, it is family. I will continue to carry on the Gerson legacy, out of necessity, drive, and passion for this eighty-two-year journey.

Millennials like me were raised in a world where we were constantly told, “chart your own course.” But sometimes you don’t get to choose your own path. Sometimes it is chosen for you, for better or for worse, by your name, a circumstance, or a series of events. It is up to you to decide what you want to do with it, and how to grasp what is both an extraordinary opportunity and an extraordinary challenge.

Jessica Gerson is a 2015 graduate of Cornell University, where she earned a B.S. from the Dyson School of Applied Economics and Management. She is the third generation of her family business, Gerson & Gerson, Inc., which she joined after graduation. Gerson & Gerson, Inc. is a leading design house and manufacturer of children’s clothing and is most known for its brand of girls’ dresses, Bonnie Jean. The company is celebrating its eighty-second year of bringing the joy and beauty of a new dress to girls around the world. Within the company, Jessica focuses on bringing innovation to small markets. She is an advocate for family business, and you can learn about Gerson & Gerson, Inc. at www.Gersonandgerson.com

This excerpt was borrowed with permission from the book 3 Billion Under 30 and its author, Jared Kleinert.

It’s About Identity…

During the 2016 Global Emerging Leaders in Family Enterprise program, we invited Sharna Goldseker of 21/64 to help us explore “Family, Wealth and Values.” In closing, she shared this, which has continued to resonate with me.

“I used to believe the important things for the next generation to learn were how to manage money or to be entrepreneurial in business. Ultimately what I learned is it’s about identity; considering upon whose shoulders am I standing, what is my legacy? And then adding in, who am I, what do I value? Then adding those two elements together to consider what can I do to think about making a difference in the world, to make change? Those are the components of identity and the important building blocks to learn in order to live with purpose.”

Sharna Goldseker, Executive Director, 21/64

Registration for the 2017 Global Emerging Leaders in Family Enterprise program is now open.

An Interview with Holly Isdale (’86) on Cyber Safe Families

Cornell Family Business Scholar Holly Isdale (’86) recently shared her insights on “Cyber Safe Families” based on the work she has done with many businesses. Originally shared on The Practitioner on September 28, 2016. She is interviewed here by Lanie Jordan, formerly of Wilkes University.

Access the podcast here. Cyber Safe Families

About the contributors

Holly IsdaleHolly Isdale is a tax attorney by training and has spent the last two decades advising wealthy families on estate, financial and investment matters. Holly founded Wealthaven in 2010 to serve as an outsourced, full service, family office for some families and handle strategic projects as needed for other clients. Holly received her B.A., cum laude, from Cornell University in 1986 and her J.D. from Boston University School of Law in 1990. She is a noted speaker on a wide variety of topics around investment and financial planning, digital death, gamification, and the importance of playtime. She has been widely quoted in the financial and mainstream media. Holly can be reached at holly.isdale@wealthaven.com.

Lanie Jordan, FFI Fellow, is the former executive director of of the Sidhu School of Business at Wilkes University and a member of The Practitioner editorial committee

Announcing the Cornell Family Business Fellows and Scholars

The Smith Family Business Initiative is pleased to announce our first cohort of the Cornell Family Business Fellows and Scholars. The SFBI Faculty Fellows represent current Cornell faculty members engaged in research or collaborative projects related to family enterprise. The Academic and Practitioner Scholars are faculty members and practitioners from beyond the Cornell ecosystem. The selection of these scholars recognizes their breadth of experience, knowledge and understanding of family business, family dynamics and business success. Collectively, these individuals are helping to create curriculum, programs and opportunities for our students, alumni and network of global family-owned enterprises.

For a complete listing of the Smith Family Business Initiative Fellows and Scholars, including individual biographies, please visit the SFBI Fellows and Scholars webpage.

 

The Biggest Threat To Family Businesses?

ropesAt Cornell’s second annual Families in Business Conference, we were excited to hear from Cornell alumnus and founding partner of Continuity Family Business Consulting Doug Baumoel (’78). Doug discussed his book, Deconstructing Conflict: Understanding Family Business, Shared Wealth and Power, as well as participated in a panel on cybersecurity threats to the structure of a family business. Below, Doug shares his insights:

“Family businesses get a raw deal. Often viewed as the poor cousin to ‘real’ businesses, most everyone I meet has a story of the disastrous end of a family business – replete with the family war over the business. Researchers point out that most family businesses ‘fail’ to pass to the next generation. With all these strikes against them, you would be justified in thinking that family business is dysfunctional business.

The truth is that family businesses are not dysfunctional; they’re just different. 

The family business system is the oldest and most widely employed type of business.  When compared to non-family enterprise, the family business is actually more robust. (After all, fully 80% of the Fortune 500 companies are no longer around). They face the same risks as other businesses, answer to the same market forces and still need good business plans and ample capital. And because many family businesses are small businesses that have an inherently higher failure rate due to thin capitalization, statistics against them may seem over-weighted.

So why do we single out family firms for their failure rate?

Just because a family business ‘fails’ to transition to the next generation doesn’t mean that it has indeed ‘failed’.  Many family businesses do not make it to the next generation for good reason.  Like their non-family owned counterparts, they may have been sold for a good price, enabling the family to redeploy their assets in new and creative ways.

Not surprising, however, the biggest threat unique to family business is poorly managed conflict.  These struggles stem from the high degree of interdependence among family stakeholders that is inherent in family businesses. With family members potentially active in so many roles (such as employee, shareholder, director), overlapping and competing interests abound.  The potential for conflict is woven into the very fabric of the family business.

What makes stakeholder conflict even more of a threat to the family business is that when conflict arises, it is rarely a simple dispute over something simple and negotiable. Roles in a family business often connect strongly to identity or sense of self. A stakeholder may believe that he/she was groomed for the top-slot at the firm or that ownership in the family business is an essential part of who they are. If these roles are threatened, stakeholders will go to great lengths to defend them.

Recently, Cornell and the Smith Family Business Initiative held their annual Cornell Families in Business conference.  I was honored to be a sponsor and moderator of a panel on the Implications of Trust, Fraud and Cybersecurity for Family Business.  While all businesses face these threats, they take on a whole new dimension when coupled with family stakeholders.  In addition to security threats from outside the company, family businesses are subject to security threats from the inside; from family members fighting over control, position and wealth.  When family members feel that their role in the business is threatened they routinely snoop on each other’s email and hack into each other’s computers in an attempt to further their own agenda.  The panel explored both common and unique security threats that family businesses face and the panelists provided helpful tips, such as the use of Password Vaults, on how these threats can be managed.

Understanding the nature of conflict in family business and developing the ability to avoid, manage and recover from conflict is often the most important factor in achieving family business success. “