Click on the picture above to learn the highlights of last Friday’s presentation by Peter M. Johnson on family business governance at the Institute for Family Business at University of the Pacific in Stockton, California.
Peter M. Johnson, Director of the Institute for Family Business at University of the Pacific in Stockton, shares in this interview the value for Family Business to join networking and educational programs, like the ones offered by the Institution he leads, to learn what to do when you don’t know what to do in your family business. Ready to learn and mingle?
How does the Institute for Family Business support family businesses?
With all of our family business, wherever they are we support them through several different ways. First, we offer about five (and as many as ten a year) different programs in different locations. These programs are offered to family members and non-family members who are key employees. With the idea that attending this program with key non-family members or their consultant, everybody is on the same page. They hear the same message and it is easier to start creating a strategy around what a group heard in a program. They will get information for an expert in the field who will speak about challenges as a current or former family business owner, consultant, or a panel.
The other benefit of the program is that it allows family to talk to each other. One of the biggest challenges that I have seen over the years is that families always think they are alone. They think that they have unique challenges and that they are a messed up family and other family businesses are much more professional than they are. So, it is an opportunity for families to get to know each other and learn from each other.
We also have a very large resource library of videos from previous programs, books, articles, consultant information, and a wide variety of family business resources that we can refer our members to. For example if someone inquiries about non-family employee conversations, succession planning or would like a consultant, we have resources that we can refer them to. We will also connect them with other members who for example may be thinking of starting an independent board of directors. They have not done it before, are not sure what the structure would look like, and want to know what the pros and cons are. They will want to know if there is another family who they can speak with that has been through this journey and can provide their experiences.
Is the Institute for Family Business at the University of the Pacific the only one of its kind in the Bay Area?
Why do you think that there are not more institutions supporting family business in the Bay Area?
That is a great question and I think that there are a couple of reasons for it. First, with some families they don’t realize that they are a family business. Some think of a family business as a mom and pop out of their home or small grocery store on the corner. They don’t really think of big family business like Levi-Strauss, Ford, or Wal-Mart. So a lot of families don’t think of themselves as a family business.
The second problem is that many families don’t want to admit that they need help. Generally, the family has a patriarch in charge and they tend to think they don’t need help and there are no issues. They are blinder to some of the problems and will gloss over the issues.
The third problem is that you have to know where to find family businesses. We know that 80% – 90% of businesses in the United States are family owned or controlled. But getting people to recognize that they are a family business and promoting the concept to them is difficult. One thing that I hear people say when they come to our programs is that they didn’t realize that this was available. It is kind of tough because until a family is in crisis, like a succession issue, family members tend to gloss over the resources that might be available to them.
Do you think this type of organization is important for next generation family members of family businesses?
Yes and actually what we see is that Next Generation is more likely to call. They recognize that their family is having issues and the senior generation is blind to the challenges and want to know what they can do. The Next Generation largely sees the value in these programs and is more likely to speak up and say that they are a family business. They recognize that the family is a part of the business and that they are having challenges that go beyond the traditional business challenges. It is critical, especially if the goal is for the Next Generation to take over, for them to develop their leadership skills.
Do you offer leadership development programs for the next generation?
We do. As a matter of fact our programs are not just for one generation, type of business, or industry. We offer informational programs that go into different topics that can be related to any business. So the next generation and senior generation both get something out of the programs.
What is your typical member profile?
There is a wide range. For example, we may have a winery that has 4 or 5 family members and 10 full-time employees. We also have some that have 80 or 100 full-time employees. Almost all of our members are multi-generational and occasionally we will get some from the same generation. They tend to be two –generation with the parents in the business.
Educational and Networking events are a great opportunity not only to learn from the presenter but also from other participants. What is your experience with this kind of events?
Written by Carmen Lence of NextGen Consulting and Coaching LLC. www.nextgenfamilybusiness.com