Why go for an MBA when you are going into your family business anyway?

Recently we concluded our Leaders in Family Enterprise class.  With nearly 40 students enrolled, from 1st generation entrepreneurs to 7th generation legacy businesses, we had an amazing diversity of individuals and backgrounds represented. Students were asked to reflect weekly on each speaker or to encapsulate their thoughts from the entire semester.  I’ve taken a few quotes and words shared, either from class, in papers, or spoken directly to myself.

Specific quotes throughout the semester:  

  • “After going through all of the assigned readings prior to class, I am convinced I now want to quit my family business.”
  • “The weekly speaker … was a force of nature and was just so engaging that I would have stayed an extra hour if I had to.”
  • “I shared with the assistant dean how important this course was and that we need more courses like this; it was immediately applicable and completely different than any other course I have taken thus far at Cornell.” 
  • “After hearing this lecture, I think I AM the Fredo in my family. But a good Fredo.”
  • “I just wanted to take this opportunity to thank you wholeheartedly for having provided me with so much of perspective related to family managed businesses via your course. The lectures were insightful and taught me many important lessons. I look forward to keeping them in mind once I go back to India and take over my family-managed business.” 
  • “I got a lot more out of this course than I expected to, from both the theory and scholarly study of family business, and the real world experiences and examples from the family business owners and operators who presented to the class.“
  • “As a direct result of this class, and the emphasis that so many of the speakers put on firmly setting succession planning, having open and frank conversations with your family and having clear and stated roles within any family business, I plan to set up a meeting with my Aunt over the summer to do exactly that.”

Reflections on family business: 

Why go for an MBA when you are going into your family business anyway?”. I typically go with a joking response of, “oh… this is a vacation for me (insert awkward chuckle… quickly switch to next topic)”. After all, I could hardly relate to the stresses of what most MBA students go thru of balancing studies with recruiting. There is a misconception of people who work in their family businesses that they have it easy, that everything they got or achieved is because of nepotism. I disagree. While they may balance work and school, we balance work and family 24/7- which I think is infinitely more demanding. Some might argue that one has the benefit of leaving the family business but be secure in having an alternative to fall back on if something does not pan out. Very few people understand the nuances of working for your own family business– the pressure in ensuring that it succeeds and that you do the family name proud. If anything, an MBA is most especially crucial to develop us as better, well-rounded team members and leaders because we are not as privy to criticism or feedback as others who work for companies. Additionally, an MBA is beneficial because it gives us the opportunity to shine for our own actions alone.”

“To be honest, on the first day of this class, I was confused. I thought I understood what a family business was, but when we were going around the classroom and everyone was sharing what their family business was, I became a little self-conscious and was not even sure if what my family had would really count.  What my family has is a 400-acre farm in southern New Hampshire, which my great-grandfather purchased in the 1930s.  On the farm, we make maple syrup, grow hay and raise sheep, but the farm has operated and basically break even or at small losses for really its entire existence.  On the farm, we have one full time farmer who basically runs the operations, and I always viewed the farm as more of a hobby for my mother, my uncle and my grandparents for after they retired. There were some tax benefits of operating a farm, and yes I worked on it during summers as a teenager, but I was never quite sure how to classify it.  However, after going through this class, hearing stories about others’ family businesses, and diving deeper into family business studies, I found a heightened appreciation for what my family has been doing for 80 years, and proudly understand the complexity of our family farm.”

I am left thinking how important this course is, especially for those coming from family businesses. Regardless of age, program of study or cultural background, all students shared a common bond of desiring to understand their role within the family and business more fully. Weekly speakers balanced practice and theory and all displayed brutal honesty in telling their own stories as they related to family business.  Thank you to all the speakers who shared their time and talents for this year’s class.

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.

Based on the findings of the 2017 study, which is an aggregate of thoughts and opinions from 186 family-owned businesses, we learned the following:

  • Most family businesses (76%) saw their business revenue grow in 2016 and are confident about the business’ ability to increase revenue each year.
  • The majority (72%) say they plan to hire additional employees in 2017, an increase from 66% in 2016.
  • Business owners share, in their own words, the impact of the regulations on their business. The common themes are around estate taxes costing money, resources and time that they could have put into growing their business.
  • Aside from creating jobs, 92% of business owners pursue civic engagement by sharing their time, talents and resources in their communities.

Please click this link to read the entire 2017 report. For comparison, if you like to also read the 2016 report, please click here to download it.

Flocks, families, and organizations

One of the greatest contributions of Bowen Theory to the understanding of groups (families, organizations, or societies), is the following: the functioning of the individual is governed by the group. Theory also points out that if an individual can raise his functioning in relationship to other group members, others predictably raise their functioning as well, bringing the whole group to a different level. This reciprocal influence represents an aspect of the emotional system at work.

If this postulate is true, this mutual influence between the individual and the group should be observable not only in humans, but in other groups in the natural world. Not surprisingly, scientists that study group behaviors (in humans and non-human groups) have described this phenomena. Among them, Ian Cousin (1) in his account of animal migration says: “If one individual is confused, it can follow others. When its own magnetic sensing or memory is stronger, it in turn becomes influential. So you have ever changing leadership according to the quality of information each individual possesses.”

The dialogue between Bowen Theory and natural science can result in an increased understanding of groups and how to navigate the challenges of being an individual while being part of the group. Discussing differentiation of self and anxiety as two main variables influencing this process contributes to comprehending the mechanism by which this unfolds. The conversation brings new light to important concepts such as leadership.

Michel Kerr (2) nicely summarizes the link between Bowen Theory and learning about groups in the natural world: “Striking parallels exists in the interactions of cells, ants, mammals, families, organizations and communities. Relationships systems at all levels respond to anxiety in predictable ways. Chronic anxiety can transform orderly cooperation into disruptive conflict. The keys to applying this knowledge are fathoming how a system works and one´s part in it. Bowen theory is sufficiently accurate to provide a reliable blueprint for change.”

References:

  1. Explorers. Bio. (n.d.). Retrieved from http://www.nationalgeographic.com/explorers/bios/lain-couzin/
  1. Kerr, M. (2001). From the Editor. Family Systems 5(2), 98-100.

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Dr. Mariana Martinez is faculty at the Bowen Center for the Study of the Family in Washington, DC.

 

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.