A lifetime in family
business: What I've learned
Leonard Geiser 57, professor of business and founder
and executive director of the Family Business Program, which he started in 1991,
is retiring after nearly two decades at Goshen College. Geiser has been involved
for 55 years with families that own and operate businesses, starting with his
own familys store.
It is estimated that 85 percent of business units in the United States are owned
and operated by families, including one-third of the Fortune 500 companies.
Perhaps because of his early immersion in what can be an all-encompassing combination
of a personal and professional life, Geiser intended to become a pharmacist,
even though he was coached to do odd jobs as a teenager at the familys
appliance store, which his father started in 1945.
But upon graduating from Goshen College with a business degree, Geiser decided
to join his father in the appliance business an easy decision to
make as he needed to support a family. Attending meetings of the appliance
industry, he began to understand what a wonderful thing it was to
run a family business; he and his wife, Linea (Reimer) 57 would spend
the next 20 years doing just that. Little did he know that another decision
about the family business would lead him to consult, teach, earn a masters
degree in business administration and return to Goshen.
Geiser spent 10 years working under his father. In 1968, the second generation
of family ownership began and his brother-in-law, Wendell Schloneger, purchased
the store. Statistically, only about one-third of family businesses survive
through the second generation and 15 percent are passed along to a third.
We didnt know how special that was, said Geiser. But
we did know we had trouble working together. Geiser wanted growth
requiring more investment and more debt while Schloneger advocated less
personal risk and slower growth. They began to have trouble keeping their family
and company concerns separate.
At that time, no one was paying attention to the dynamics of family and
business systems coming together. The focus was on public companies and growth;
there wasnt the enthusiasm for entrepreneurship there is today,
Geiser said. If there had been, we might have been able to understand
what was happening and have a place to talk about what we were experiencing.
In 1977, Schloneger and Geisers sister Elaine purchased he and Lineas
share of the enterprise. While Geisers father intended Len take over the
business, Len opted out to alleviate the strain on family relationships.
The business celebrated 55 years and two children now are working with him.
Said Geiser, A lot of people think I have too much passion for family
business. Though my experience on the surface doesnt seem to have worked
out for me, in reality it did. I went on to a career in teaching and consulting.
I am very happy with that path.
Geiser and his brother-in-law are friends today very good friends. In
fact, Schloneger was the first member of GCs Family Business Program,
which has served more than 100 family businesses over the past decade.
Family businesses are the backbones of most communities. They have a lot
to offer: values lived out include respect for people, honesty, trust, development
of the individual and service to others, Geiser said.
I have learned in 55 years with family businesses:
My top 10 list From
an Afternoon Sabbatical presentation Feb. 13, 2001, with Rachel Lapp
10. Our problems are not unique
When I was with the National American Retail Dealers Association, I helped people
work out their problems, most of which revolved around how the people who own
and manage businesses relate to one another; what Wendell and I experienced
was not unusual.
9. Even good families have problems.
Just because you have problems in the business doesnt mean you are a bad
8. Leaving the family business is OK.
Families should develop strategies and policies early on that allow family members
to enter and exit the business. Individuals should understand expectations when
they enter the business and also should know that it is OK to leave that
leaving the business doesnt mean leaving the family.
7. Be careful about saying that you are running your
business for your family.
Often our actions communicate something other than Im doing this
for you. Family members can feel they are taking second place if business
becomes the central focus of family life.
I struggled with this when I was a boy. My
dad started the family business when I was 10. Dad worked hard, but was never
home; he was at work before we got up in the morning, would come home to eat
dinner and often go back to work. I had no way of knowing that he was working
for survival. Now I realize I am a lot like that, too. It is hard to balance
love for business and love for family.
6. Family businesses that get everything together have
Strong families see themselves as stewards of the business resource they are
building they have a vision for the future.
5. Plan for transition to another generation.
I could tell lots of stories about senior generations having a hard time turning
over their business. Often, the financial security of a senior generation is
tied up in the business and they are afraid they wont have adequate resources
to meet their retirement expenses. Sometimes it is also hard to choose whom
among the children is to be the leader in the next generation.
4. When you dont know where youre going,
youll end up somewhere maybe where you dont want to be.
You need a dream. A family business, more so than any other kind of business,
needs to have a vision.
Often, mom and dad say they are building the
business for their family and anticipate that their children will take the business
over some day. Children need to know this, and to know whether they are encouraged
to be part of the business or should go off and do something else. The family
has to ask questions like, What is this business going to be like in five
or 10 years? and Who is going to be running the business?
Family must come together and find ways of articulating the visions family members
have for their lives.
I have been doing a survey of Mennonite family
businesses. Sixty-seven percent of respondents said they want the family to
own the business in the future. Eighty-one percent said their family business
currently has no plan or criteria set up for the next leader. Fifty-one percent
said they are going to retire in the next 10 years and only 24 percent have
a strategic plan for their business, including leadership succession. If you
are 10 to 15 years from retiring, planning for succession must begin. This data
indicates there is a lot of work to be done! This is not unique to Mennonite
family businesses it is a snapshot of family businesses today, and lack
of planning is one of the major reasons why family businesses have so much trouble
passing to successor generations.
3. You cant do it alone, so look for help.
In the last 20 years, researchers, consultants and academics have realized family
businesses need special attention. These businesses must survive they
provide vital employment, support community civic affairs, etc. Dont let
inability to talk about important issues leave you locked up. Find persons to
work with who understand and respect family business for guidance and counsel.
2. Succession in a family business is a process, not
This process begins when children are young. Create a complete picture of both
the positive aspects and the challenges. Each family member should be supported
in achieving his or her goals and dreams, whether they participate in the business
or not. Dont wait to start the succession process until the senior generation
reaches their 60s and 70s; they need to take leadership in this process, as
it is hard for children to ask difficult questions about finances and relationships.
It is time to map out:
1. Talk, talk, talk.
- an escape plan and financial arrangement
for family members not involved in the business.
- a management succession plan.
- a financial plan that provides for parents security
- an ownership plan involving the business, fairness
and stock ownership by those in the business and other heirs, etc.
Good communication is critical. Your family must be enabled to talk together
about important personal and family goals and values and how these will be applied
in the business, how the business should grow, the transition plan and when
will it happen and an estate plan.
Said Geiser, As I move into retirement, I have learned some important
things in working with hundreds of people over the past 20 years at Goshen College.
I think one of those things has been how to gracefully retire and move into
a different phase of my life. The Family Business Program will continue under
the very capable leadership of Allon Lefever, in whom I have great confidence.
He will reshape the program to reflect some of his personal strengths and interests,
and just as the successor in a family business, will guide it in meeting the
challenges of an ever-changing business environment.
Geiser intends to continue to do consulting with family
businesses through his firm, Geiser and Associates. Goshen Colleges Family
Business Program will continue to offer workshops and seminars that focus on the
issues Geiser has described, and many others. For more information about the Family
Business Program, call (574) 535-7135 or (800) 807-2110 or e-mail firstname.lastname@example.org.
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