Why I Friggin’ Love Family Owned Businesses
Did you know that the greatest part of America’s wealth lies with family-owned businesses? Family firms comprise 80 to 90 percent of all business enterprises in North America!
I love working for family owned businesses because I can sense the commitment, drive and purpose that formed the foundation. What truly drives many family businesses is the sense of connection and identity the owners and their family members feel with the business.
Here’s the naked truth, though. More than 30% of all family-owned businesses survive into the second generation, however that means almost 70% didn’t make it. As the business moves to the next generation only 12% will still be viable into the third generation, with only 3% of all family businesses operating at the fourth-generation level and beyond.
I have worked with over 100 family-owned businesses in the last 30 years to prepare the second and third generation succession. It is my passion and purpose to keep the family owned businesses healthy and to structure them to have the “yes” factor for the succeeding generation.
My very first client, Arizona Shoe Corporation in 1983, was in that transition from father, Jack Goot to son, Bob and they just did not see eye to eye. The way they handled the divide was to give Bob the 20 “concept” shoe stores to run, like Capezio, Joyce Selby, Florsheim and Rockport and Jack got to keep his 8 men’s and women’s Goot Fashion Shoe stores operating the way he had always done.
As an objective observer I realized I had an advantage. Both men were so busy being “right” about how they wanted things to be done, I saw that their staff had gone “deaf.”
I saw an opening to turn the organization on its head by asking to meet with each store team without the owners and they agreed. In a very safe environment I asked each team what their dreams, goals and wishes were. They were ecstatic. I wrote down every response word for word on flip chart pages. We easily filled up 8 pages of ideas and you could feel the energy in the room. They were super-charged, they were unified and they all shared the same dreams. It was transformational for them to hear each other and to realize they all wanted similar things.
As the second part of the process, I asked them what the obstacles were and in every group they said “Jack and Bob.” Then I asked what they really saw as obstacles and it was a very short list, “the rest we can do if we are together going toward a common goal.”
Then we laid out the priorities and they were all the same in all 28 stores.
- Create a common goal that we all want – Done. They all wanted 100% sales increase and they were all on commission. I was IN!
- Create a structure for training, operations, communication, evaluation, etc. so we know how to hold each other accountable. That was my job.
- Reward, recognize and celebrate the results so we all win! That was done through Leadership training.
Without going into tremendous detail, Arizona Shoe Corporation literally had a 100% sales increase that year. How did they do that? Well, during the dreams, goals and wishes sessions, the teams all saw that they could create much deeper, lasting relationships with the “Snow Birds” who wintered in Arizona and then went back to their Midwest homes. They kept in close touch and sent shoes on approval (way before the Internet) and the sales skyrocketed! The following year, with our new collaborative culture and ability to systematize, we devised new customer relationship strategies and increased sales another 100%! As you can imagine, the “divide” between Jack and Bob simply melted away. They were in awe and saw their roles completely differently. Structure gave them freedom and took the family dynamic out of play.
One of my most memorable moments was when Bob affectionately pulled me aside and told me, “If you want to see the Top, look at the Bottom.” We all learned that together. May you rest in peace my dear friends, colleagues and mentors Jack and Bob Goot.
By the way, I was written up in “Footwear News” and credited for assisting in the 100% sales results for two years in a row. Within months I had the footwear industry, apparel, accessories and several of the major retail corporations wanting to be my clients. For 30 years I have used the same principles with one stipulation. They have to get off of their high horse and want to embrace change from the ground up. “If you want to see the Top; look at the Bottom.” (I have been known to “fire” clients who are not on board with this approach.)
I want to share 3 tips for you that will make a huge difference.
- Create a Vision with your team. Your culture is a product of your collective team and cannot be dictated.
- Structure your training, operations, communication, evaluations, etc. so the team knows what “good” looks like so that you know how to hold each other accountable. You need to identify very specific behaviors, so there is no room for interpretation. (My company has very specific processes for this that will give you support. It does require a set of skills to define behavior, and it really helps if an outsider takes a gentle look inside of your organization to create boundaries.)
- Create a culture based on trust. We highly suggest “Ground Rules for Work & Life.” Everyone from the owners to the front line, needs to embrace what “good” looks like and to “walk their talk.” There can be no excuses, reasons and justifications for why you did not behave within the “bumper rails” on your bowling lane.
Okay, maybe I had beginners “luck” but I must tell you that these exact strategies have transformed hundreds of businesses and touched thousands of lives every year ever since. Can you imagine how much profit this culture creates? It’s crazy!
It is my passion and commitment to create workplaces where people can’t wait to come to work every day. And my favorite clients are family owned businesses.
My company has your back because you can access me directly if you have any obstacles or stumbling blocks that present themselves during the journey. We are on a mission to support ALL family-owned businesses in our beloved country and all over the world. You can count on us.
To learn how we can support yours, check out our website. Also, we have a rare opportunity for you to join us for a 2 Day Leadership Immersion Experience in Santa Monica, CA. During this workshop you’ll learn the skills and tools that transformed the Arizona Shoe Company. To register, visit us at profitivityinc/event-registration.