Mon, Jul 26, 2021
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Horizons: Family Office & Investor Magazine

Mitzi Perdue: How to Make Your Family Business Last Across the Generations

Monday, March 04, 2019

Mitzi Perdue identified the failure to develop the right family culture as the main reason why family businesses fall apart and shares five practical tips to develop and maintain such a culture.

Mitzi Perdue is the daughter of Ernest Henderson, the man who built the Sheraton hotels from one hotel to more than 400 during his lifetime and was the first hotel chain to be listed on the New York Stock Exchange in 1947. She is also the wife of Frank Perdue whose promotion of the Perdue brand through high-profile advertising resulted in creating the first well-known brand of chicken in the U.S. While Frank is now recognized as a visionary – branding his Perdue Farm chickens with his own name and being the first to put a name tag on them – Mitzi says that as much as she admired him for his success in business, she admired him even more for his success as a family man. Mitzi is also a businesswoman in her own right. She started the family wine grape business, now one of the larger suppliers of wine grapes in California.

Mitzi likes nothing better than to share insider tips for successful family businesses. The Hendersons started their Henderson Estate Company in 1840 and her Perdue family started in 1920 in the poultry business. These two families have a combined tradition of 278 years of staying together as a family.

You may be familiar with the statistic that 70% of family businesses don’t make it to the second generation. The big question is: how can you beat these odds?

Family members need to learn some basic cultural attitudes. They need to know that they’re part of something bigger than themselves, and that they can’t always be right. They need to learn that being a member of a family business sometimes requires sacrifice.

The biggest reason that business families’ fall apart is that the family hasn’t developed the kind of culture that supports keeping the family business in the family. Families that leave this to chance rarely make it to the next generation.

So, how do you create this kind of culture?

Know your family stories. We are the stories we tell ourselves, and high- functioning families have heard their family stories over and over again. How much does your extended family know about where the family business came from and what made it what it is today? How much do they understand the sacrifices, efforts and tenacity that went into making the family business you have today? Do they know stories about family members putting the good of the family ahead of their own interests? Be intentional about telling these stories. The more stories, legends, myths, and parables, the ber your family’s culture and the more likely your family business is to endure.

Take family vacations. Your family vacation could be five people or 100 people, but whether it’s a large group or a small one, having aunts and uncles and cousins spending time together greatly increases the chances of building a family business that lasts. A vacation means time set aside to share experiences and to get to know and appreciate each other and to embed the family’s values. It’s a time for all branches and all generations to build the shared stories and memories that lead to trust and caring. This is especially important if family members are geographically dispersed, because it allows extended members to get to know each other.

Subsidize a family vacation after you’re gone.

All too often when the patriarch or matriarch passes on, family members stop seeing each other. Maybe for the first few years, they’re together at major holidays, such as Thanksgiving. And later on, maybe they get together for weddings. But gradually, there’s nothing left and family members have superficial relationships – or no relationship at all. A highly effective antidote to this is to leave money in your will to pay for a yearly get-together. Some families’ subsidize an annual dinner while others pay for a nice vacation. Either way, having an endowed yearly meal or vacation can keep families together across the centuries. Ideally, there’s even money budgeted for baby-sitters and child-friendly activities. Endowed family get-togethers can be a highly effective tool for helping the family continue across the generations.

Write a family newsletter. In a geo- graphically dispersed family, a newsletter can play a huge role in helping the family to maintain a b and vibrant culture. Include in it interviews with the older family members or employees about the early days and some of the company’s struggles. Maybe interview the matriarch or patriarch on such issues as why it’s good to be public, or why our family should never wash its dirty linen in public, or why it’s a terrible thing to be “addicted to being right.” The news- letter can also help people catch up on family news – maybe someone became an Eagle Scout, got into the college of his or her choice, or got a promotion. It’s also excellent for recording weddings, births, or in the case of an engaged couple, telling the story of how they met. Other topics for your newsletter can include what’s going on in the company, including significant milestones. Make it short, ideally no longer than one or two pages. You want people to read it, and unfortunately, there’s an inverse connection between how long it is and how many people will read it. If it’s limited to one page, your family members are more likely to read it when they get it, as opposed to putting it aside for later and then never getting to it.

Get help if you need it. Fortunately, there’s a whole new ecosystem of family advisors who can help. There’s no such thing as a family business that doesn’t have conflict, and when there’s a serious family conflict, the pain from it can permeate every hour of every day.

Family members need to learn that being a member of a family business sometimes requires sacrifice.

Not to mention that it can blow up the whole family, and with it the family business. So, just as you’d get medical help if you if you had alarming chest pains, don’t put off getting professional help if a conflict in the family is getting out of hand. If you Google “family business advisors” you’ll get more than 45,000 hits in half of a second. Or if you have a financial advisor, he or she is likely to be able to refer you to a professional trained in family business relationships.

Family harmony is so important, that anything you can do to nurture it is a wise investment. Many families don’t stay intact over the generations. This is likely to happen when a family leaves its culture to chance. The good news is, planning is something you can do, and even better, the implementation can be enjoyable and fulfilling.


 
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. SPACs: SPAC merger with space firm Momentus threatened by SEC fine, Altus Power to merge with SPAC created by CBRE in $1.58bn deal, 10 best cheap SPACs to buy according to Reddit, A-Rod's slam SPAC is in merger talks with Italy's Panini group, How to conjure a $20bn fortune using a SPAC[more]

    SPAC merger with space firm Momentus threatened by SEC fine From Bloomberg: A blank-check company's acquisition of space-cargo firm Momentus Inc. has been dealt a serious blow by the U.S. Securities and Exchange Commission, which accused both entities of misleading shareholders just we

  2. PE/VC: Private credit: The $1tn "new 40" opportunity[more]

    From Institutional Investor: The private debt asset class has provided investors with an attractive combination of high cash yield and floating rate returns coupled with low volatility and loss rates, while modernizing portfolios. Private credit is on a roll. Investors love the strong cash yie

  3. Distressed-debt funds get no love as credit problems disappear[more]

    From Bloomberg: Private debt investors are turning away from distressed funds amid shrinking opportunities to profit from troubled companies. Investors were less keen to put their money to work in funds that target distressed credits in the past quarter than a year ago, according to a poll of

  4. Investing: Cathie Wood's Ark Invest abandons Chinese tech stocks amid regulatory crackdown[more]

    From Business Insider: Cathie Wood's Ark Invest has slashed its exposure to Chinese tech stocks amid an ongoing regulatory crackdown, according to Ark's daily trading updates. Ark's flagship Disruptive Innovation ETF has seen its exposure to Chinese stocks fall to less than 1% from a high of 8

  5. SPACs: SEC abruptly kills Ackman's controversial SPAC plans, Bill Ackman rejigs Universal deal after regulators probe SPAC plan, SPAC-ing the Southeast Asia story, SPAC deals will rebound for remainder of 2021[more]

    SEC abruptly kills Ackman's controversial SPAC plans From Institutional Investor: The Securities and Exchange Commission has killed Bill Ackman's special purpose acquisition company's complicated plan to invest in Universal Music Group. On Monday, his SPAC, Pershing Square Tontin