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 family’s 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 family’s 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 master’s 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 didn’t 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 wasn’t 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 Geiser’s sister Elaine purchased he and Linea’s share of the enterprise. While Geiser’s 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 doesn’t 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 GC’s 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.

What 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 to us.
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 doesn’t mean you are a bad family!
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 doesn’t 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 “I’m 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 tremendous power.
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 won’t 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 don’t know where you’re going, you’ll end up somewhere – maybe where you don’t 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 can’t 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. Don’t 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 an event.
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. Don’t 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:

• 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 and retirement.
• an ownership plan involving the business, fairness and stock ownership by those in the business and other heirs, etc.

Return to June Bulletin contents
Commencement rites by Rachel Lapp
“Fling yourself…but, darling, don’t drop!” by President Shirley H. Showalter
Senior profiles: Ryan Kolb, Andrea Troyer, Joel Jimenez, Lora Nafziger, Greg Stahly, Melody Bennett, Deana Landis, Alicia Montoya and Rachel Glick
How Julia Kasdorf changed my life by Daniel Shank Cruz
Mennonite by choice by Joni S. Sancken ’98
Allon H. Lefever by Ryan Miller

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