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By Larry Sloan Posted 1 year, 9 months, 1 week, 2 days, 7 hours, 48 minutes ago.
Recently, I attended the 20th Reunion of my Kellogg Graduate School of Management class. For those of you unfamiliar, Kellogg is affiliated with Northwestern University and sits on some very bucolic lakefront property in the northern Chicago suburb of Evanston. It was a great opportunity to connect with old acquaintances and learn what folks have been up to. As I suspected, a lot of alums were involved in the usual fields – investment banking, brand management. Several were entrepreneurial and had started their own small companies (one guy is running a company out of San Diego that rents out supplies to trade shows; another runs a cleaning products supply company in Germany). Not surprisingly, no one really knew much about trade associations and questioned how and why I got into the business, but I digress.
The Kellogg faculty is quite prolific. One of the most notable professors is Philip Kotler, the internationally acclaimed marketing guru. I didn’t realize the faculty included a family business expert, John Ward. He recently published a book, Family Business as Paradox. As many SOCMA members are “mom and pops,” I thought this might be of interest to you and others.
According to Ward, “managing both family and business seems a constant challenge. So much so that the term ‘family business’ may be considered an oxymoron, a contradiction within itself…for the family is not usually thought of as a business, and business doesn’t represent the full reality of the family.” Ward writes that the nature of the family business requires a unique approach and not the tactics typically deployed by top executives of publicly traded corporations and other non-family businesses. To balance the emotional needs of family with the capitalist nature of the business is no easy task; Ward walks the reader through a series of examples that address how to satisfy seemingly conflicting interests. He argues that big corporations are certainly not immune to paradoxes – in fact, corporations such as Amazon and Costco wrestle with these types of issues all the time.
Interestingly, “twenty percent of family businesses continue past the 50-year point, compared with the 15 percent of the S&P 500 that survives to the 40-year mark.” Institutional research has shown that family businesses have tended to generate greater profits over time than non-family entities. For those struggling with family business issues, hopefully, reading this book will help you gain new insight to ensure your company is sustainable and will pass down to the next generation.
And speaking of Amazon, you can pick up a copy there (as well as at other fine booksellers nationwide).
Larry Sloan is a guest contributor to Ropella Reports. He is President and Chief Executive Officer at SOCMA.
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