Blommer Chocolate now produces more than 500 million pounds of chocolate and cocoa products a year, with factories under third-generation leadership in Philadelphia, Chicago and outside San Francisco. “We have always felt that we were relatively small, but that is not true,” observes Rick Blommer, Joe’s son and a Blommer vice president. “It is difficult to go from an intuitive business that we can run on the back of an envelope, to seeing ourselves as a big company. Thus, we have focused our efforts on the need to have intentional management—management that is clear about its intentions, plans and goals.”
 | | BLOMMER FAMILY photo: (left to right) Peter Blommer, COO; Joseph Blommer,
President; Rick Blommer, VP; Henry “Hank” Blommer, Chairman & CEO; Tori
Blommer-O’Malley, VP; Steve Blommer, VP; Peter Drake, VP, sales & marketing. |
The five members of Blommer’s third generation involved in the company had to stop thinking of themselves merely as individuals moving up the ranks and instead see themselves as a management team. They now come from all over the country to meet quarterly. Hank’s daughter, Tori, who runs the company’s plant in San Francisco, says, “The responsibility is on our shoulders to come up with a plan for the future that we will present to [Hank and Joe].”
Rick says each member of the third-generation team participates in a so-called 360-degree assessment, in which peers, subordinates and supervisors rate an individual on a variety of competencies. They then share the results and seek ways to improve performance. “We [also] talk about our Code of Conduct, communicating about what has been working and what has not,” Rick adds. “We had to begin to look at it as one company, not a bunch of separate fiefdoms. We have been able to learn how to face issues directly with the person concerned, and to be able to talk to each other.”The Blommers and the Mitchells have learned similar lessons about the importance of connecting the third generation to work together. The Mitchells emphasize the importance of mutual trust and respect. “We are all partners, respect each others’ positions and have open, honest communication,” Bob Mitchell says. Tori Blommer-O’Malley says her family found it best to “talk about issues openly and directly. We got issues on the table and learned to talk to each other.”
While the second generation can often muddle along without hard-and-fast rules regarding family business governance, successful third-generation businesses often find these structures crucial to success. The members of the second generation often grew up in one household, where parental guidance was near at hand. The third generation, by contrast, often consists of several separate families, raised with different philosophies and expectations, each of which may view the business quite differently.
One of the factors that differentiates third-generation families who succeed in maintaining a unified family, as well as a successful business, from those that fail is their ability to agree on clear boundaries between the two, argues Bork, an advisor who has worked with more than 400 families. They do this by creating structures that separate the business of business from the business of the family, and by creating clear agreements that define the goals, rules, expectations and interactions between the two, and structures to oversee their interaction.
The central structure is typically a board of directors, which oversees the business, family office or the family enterprise’s holding company. The second generation usually has a simple board, with family members involved in the business acting as directors. But because the third generation may not have the same expertise or drive as the first or second, the board becomes more important. To look after the health of the business, family boards often take on one or more independent directors, much like their public company counterparts (although they are not required to do so). They also tend to limit the number of family members to a handful of those who are active and qualified. Some families have representatives from each family branch on the board, while other families elect two or three representatives.
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