How Generational Business Owners Can Be Successful for Years to Come
Family businesses are unique for a number of reasons. Though they are special due to the generational values passed down by relatives, they face challenges other business owners may not have to deal with. In our fourth Families of Worth session, we discussed how crucial philanthropy is for generational business owners. Hyatt Brown, chairman at Brown and Brown, J. Powell Brown, CEO at Brown and Brown, Sharon Sager, CIMA, managing director, private wealth advisor, family office consultant and institutional consultant at UBS, and Jim McCann, chairman at Worth and chairman and founder of 1-800-FLOWERS, shared their thoughts on what makes a family business successful.
Hyatt Brown, who has worked the family business with his son J.Powell Brown, believes in passing down one important value that will make a difference in business and society. “My father was born and reared on a small farm in North Carolina, and he learned in the late 1890s about crop rotation,” Hyatt Brown said. “And one of the things that he always told to me and my older brother who’s dead is that when you get some, you give some back. And so that’s what we’ve done. It’s a little bit like an agricultural background. And so it works. It’s been fun.”
According to a UBS report, “the first key to managing family business transition is to recognize that, as closely connected as they are, the family as a family and the business as a business, have different goals.”
Meanwhile, Sager believes one main element is recognizing how the workforce influences an individual’s perception of themselves. “Work gives young people and everyone, really, but starting with young people, a sense of self-worth,” she explained.
She also elaborated on how working apart from family can be beneficial. “I think particularly, if there’s a family business, and you have the opportunity to work outside, that is really good, because things could be a little less partial to the good or, you know, a family business might be too hard on you,” she said.
She continued, “But I think that every family’s wealth preservation begins with and ends with acknowledging the members, and it speaks volumes to remind the members that they are worth more than a bank account. So I think work gives them that dignity. Although we do think that part of successful family transitions and succession should begin as early as possible with introducing the family members, the children to the family business at a young age.”
In order to make sure a family business can remain successful for years to come, Hyatt Powell thinks knowing who to pass the torch to is crucial. “The most important responsibility for a leader of any organization, and particularly for-profit organization, is that person has to be able to turn the reins over to someone who is better than she or he is. And I was able to do that. It just happened to be Powell,” he said. “And you see, what no one really recognizes is if he hadn’t been the best person for the job, he wouldn’t have got it. And people say, ‘Well, you say that. But that’s baloney.’ It’s not baloney; that’s the way our family has always been. And so that’s different. It’s way different than people that most folks know who have family businesses. And so that’s a reason that maybe some of those family businesses don’t go so well, after the first or second or even third generation. So you have to be able to understand that being respected is more important than being loved if you’re going to be a real leader.”