Fri, Apr 3, 2020
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. Investing: Ray Dalio's Bridgewater scales down European short bets after $3.2bn windfall, Here's what top hedge funds are buying in the coronavirus stock market crash[more]

    Ray Dalio's Bridgewater scales down European short bets after $3.2bn windfall From Financial News: Bridgewater Associates, the world's biggest hedge fund, has retreated from shorting European stocks after making an estimated €2.9bn ($3.2bn), as its founder and co-chairman Ray Dalio c

  2. Bill Ackman writes letter to shareholders on coronavirus[more]

    Pershing Square Holdings (PSH)'s Bill Ackman wrote a letter to investors outlining his insight on the coronavirus pandemic in the United States. He revealed that PSH completed the process of exiting the hedges on 23 March, netting a gross $2.1bn for PSH, after turning 'increasingly positive on equit

  3. New Launches: LGPS Central sets up investment grade bond fund, Leeds Equity Advisors aims to raise $1bn for PE fund, RLI Investors to launch European last-mile logistics fund, DBL Partners IV targets $450m[more]

    LGPS Central sets up investment grade bond fund From IPE: LGPS Central, the asset pooling vehicle for eight local government pension schemes (LGPS) based in England's Midlands, has launched a global investment grade corporate bond fund in order to meet its partner funds' needs. The po

  4. Investing: Marathon sees cheap assets amid dislocation in credit, Deerfield's health care buying spree, It's time to buy shares again, says BlackRock, Credit Suisse, Fed is buying credit ETFs but one hedge fund is shorting them[more]

    Marathon sees cheap assets amid dislocation in credit From Bloomberg: Distressed-investment specialist Marathon Asset Management is buying beaten-up debt amid the greatest dislocation in credit markets since 2008, according to Bruce Richards, co-founder and chief investment officer of the

  5. People: Carlyle picks 2 deputy heads for Japan buyout advisory team, Ex-Kleinwort Hambros adviser takes senior role at multi-family office boutique[more]

    Carlyle picks 2 deputy heads for Japan buyout advisory team From PIonline.com: Takaomi Tomioka and Hiroyuki Otsuka were named deputy heads of the Japan buyout advisory team at Carlyle Group. The positions are new, confirmed a spokeswoman for the New York-based private markets investment g