We are a Tribe

 

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Sabrina Fung Co, MBA ’18

Applying Corporate Best Practices to Family Businesses

 

Cornell University’s Smith Family Business Initiative hosted its first roundtable discussion on family conflict in partnership with the Hult International Business School in San Francisco last April 5, 2018. With the theme of “Conflict: From the Inside Out”, the roundtable discussed how family businesses differ from traditional corporations, and how to adapt corporate practices into family business settings.

What makes family businesses and its conflicts different?

A family business can range from your mom-and-pop stores to big multinationals (SC Johnson, for example). Ideally, a family business is at its core, a business. In practice, however, it is not.

Conflicts within a family business are more common, extreme, and intractable. There are a lot of factors as to why this is, but we focused on two—interdependency and lack of common language and bond.

Interdependency. As Doug Baumoel, one of the roundtable facilitators emphasized, families running businesses have more interdependency with each other and the business. Family members within the business are interdependent on both fronts—the family unit and the business unit. Therefore, conflicts can cross lines and get personal quickly.

Lack of common language and bond. As families grow bigger, there tends to be a lack of common language and emotional ties to the business. This may be especially true for 3rd and subsequent generations as they see the wealth but not necessarily understand where the wealth came from. A common language and bond can be formed by investing in resources that focus on the family’s learning and development about the business’ background.

Corporate practices into the family business

“The best practices for your family business has not been written yet”

 No family business is alike. While a family organization can apply best practices as much as they can, they face organizational politics unique to their own family dynamics. Therefore it is important to adopt best practices that can fit into how your own constraints.

I worked in my family business for five years before coming to Johnson. Based on my experiences, I chose two scenarios that could get… “delicate” with some advice on how to overcome it.

 Scenario 1: Giving feedback

Giving feedback to a supervisor or subordinate can already get awkward. Can you imagine if you had to give feedback to a family member?!

“Hey (insert parent, aunt, uncle, sibling, cousin), you tend to take over during meetings. I think you should step back and allow others to share their ideas. I’ll see you for Sunday dinner!”

I don’t think so.

If family members are already hesitant to give feedback, employees may be even more hesitant due to the repercussions they can face.

Solution: While having non-family supervisors, an independent board of directors help evaluate performance; they may not have their ears to the ground. To get a more well-rounded evaluation, implementing an anonymous 360-degree feedback system can incorporate subordinates’ and colleagues’ feedback.

 Scenario 2: Initiating Change

When your boss or supervisor has known you since birth, it gets hard to be taken seriously. Furthermore, they may already be resistant to change because it can signal the need of letting go of their ‘baby’ a.k.a. family business.

Solution: It may not come as a surprise that research on 100-year-old family businesses show that change is usually initiated by the younger generation.

While initiating change may be easy, getting buy-in from the older generation can be tedious. The facilitators suggest building allies and accounting for intergenerational cultural differences to help bridge the gap.

Allies can be in the form of family or non-family members. The important thing is they understand the business’ history from a different point-of-view than yours. These allies can help you to build a better context of the situation. A non-family member also has a different relationship than what you have with your boss (most likely your elder family member) and you can gain insight on their communication preferences in a professional setting.

Intergenerational cultural differences can be found in 8 scales—communication, evaluation, persuasion, leadership, decision-making, trust, disagreements, schedules. For example, an older generation may follow a hierarchical leadership style. A younger family member may be influenced by a Western education and prefer a more democratic process for decision-making.

Sabrina Fung Co, MBA ’18, is a third generation member of her family’s business, Manly Plastics, in the Philippines. Sabrina is also the immediate past president of the Cornell Family Business Club

2018 Family Business Club officers elected

The conclusion of each calendar year also brings a transition in leadership with the Family Business Club . Under the leadership of co-Presidents Sabrina Fung Co and Aradhana Rae Gupta, Treasurer Kevin Kang and Vice President Ben Rashbaum, the club saw remarkable growth over the past year under their consistent leadership. Thank you, Sabrina, Aradhana, Kevin, and Ben. In 2018, we welcome the following slate of officers:

  • Adriano Campos, President
  • Ryan Limb, Executive Vice President of Student Engagement
  • Ben Rashbaum, Executive Vice President of Special Programs
  • Andres Ramirez, Treasurer
  • Christina Chen, Communications Chair
  • Gustavo M. Camargos, Vice President of Special Events

 

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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.

Developing the Next Gen

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The Family Business Consulting Group has compiled a helpful list of recent articles aimed at development of the next generation. Shared here are their 10 top articles written by their team:

  1. Introducing Teens and Young Adults to the Family Enterprise
  2. Family Champions: Energy for Success
  3. Vaccinating with Values: Family Business Antidotes to “Affluenza”
  4. Developing Next-Generation Leaders in Family Business
  5. Empowering the Next Generation with the Future
  6. The 80/20 Rule: Balancing Ownership and Management Responsibilities
  7. Achieving Balance: Individual Rights and Family Interests
  8. Passing the Baby: The 8 Must Haves of Successful Continuity Planning
  9. Enabling Incompetence Among Family Employees: Good Intentions Gone Awry
  10. Next Generation Development with a Mentor Team

The Value of a Family Business MBA

Contributed by Christopher Pletcher, Cornell MBA ’16

Over two years ago, I made the decision to pursue a career working with my father-in-law in the family business, an industrial coatings application and testing company. At the same time, I enrolled in the two-year MBA program at the Johnson School at Cornell, knowing that I would be joining the company shortly thereafter. With graduation approaching this weekend, I’ve taken some time to reflect on how this decision to join the family business has impacted me over the course of my degree.

There were three amazing opportunities that came about because I had the foresight of the business in which I would be working after business school. These three areas were especially noteworthy due to their foundational influence on my personal development during school. Each provided a new perspective on the decision I had made.

  1. Focused Academic Interest: Having the knowledge of the industry, company, and role I would be entering after business school allowed me to custom tailor my schoolwork to fit my interests to best prepare me for the next chapter. I focused on finance and strategy, the two areas I thought would be most impactful since I would be heading into a leadership role which would help chart out the next decade of the company’s future.
  2. Immediate Real-World Application: I also found that I could immediately apply the concepts I was learning to a real-world scenario in nearly every class. During my two years, I completed half a dozen projects that contributed to the company, ranging from pricing to strategy to marketing. I (and the company) had the added value of my classmates’ input, as most of these were group projects.
  3. Family Business Resources (SFBI): Having a formal resource center to draw on for how to approach family business governance, managerial best practices, leading research, and networking support was a true advantage. The inaugural Cornell Family Business Conference and the Lectures in Family Enterprise class provided incredible insights into the unique relationships between scores of families and their businesses.

While my MBA program is coming to a close, I am excited to begin the next chapter of life, working within the family business. The educational focus, immediate application, and additional resources I experienced during my program were true bonuses which made my program all the more rewarding and useful. I hope you may also experience the value of a family business MBA!

Christopher Pletcher was President of the Johnson Family Business Club from 2014-2015. As President he helped grow the club to over 100 members, launched the CEO Speaker Series and insured a smooth succession to the current club officers.