The journey of A Family Business is often depicted as a unique blend of personal and professional realms, where familial bonds intertwine with entrepreneurial ambitions. This distinctive combination presents both unparalleled opportunities and intricate challenges. My own understanding of a family business began when I was just 19, during a somewhat dramatic “family meeting” in the basement of our home in Bangor, Maine. My father, an engineer, gathered us to unveil his plans to leave his current partnership and launch a new venture, “The Fitch Company.” The name felt a bit formal for a family affair, but the underlying message was clear: this was a pivotal moment for our family’s trajectory.
Looking back, this experience resonates deeply with the conversations and insights shared at the recent Tugboat Institute Summit in Sun Valley, Idaho. Surrounded by over 100 Evergreen business owners, I listened intently as speakers illuminated the multifaceted realities of running a family business. It became evident that these enterprises operate within a fascinating set of paradoxes. They require a strong sense of individual leadership and vision, yet simultaneously depend on robust family support and understanding. The pursuit of building an enduring, or Evergreen, business demands immense dedication, prompting the crucial question posed by Tugboat founder Dave Whorton: “Why build an Evergreen business if you do not foster an Evergreen family?” This encapsulates the symbiotic relationship between the business and the family – one cannot thrive without the other. A leader needs the backing and comprehension of their family, while also nurturing the growth and appreciation of the business within the next generation.
Support within a family business extends beyond mere agreement; it can manifest in unexpected forms, even as constructive opposition. Photographer John Keatley recounted a formative experience where his parents, in a moment of pragmatic concern, advised him to abandon his burgeoning photography career for business school. Although he initially heeded their advice, a chance encounter and encouraging words from a local pharmacy manager about his developed film spurred him to reconsider the very next day. Despite his reversal, his parents’ guidance instilled in him a crucial respect for the business aspects of his artistic passion. This anecdote underscores that family support isn’t always about unconditional endorsement, but rather about providing grounded counsel, even if it challenges one’s immediate path.
Sometimes, fostering the growth of a family business necessitates radical changes, even dismantling long-held traditions. Robert Pasin, CEO of Radio Flyer, the iconic wagon company founded by his grandfather Antonio in 1923, faced this very dilemma. Antonio, a cabinet-maker by training, prioritized efficient manufacturing processes. However, Robert recognized the unsustainable nature of competing with lower-cost Asian manufacturers. He strategically shifted the company’s focus to design, branding, and the power of imagination. This transition, while requiring the painful decision to close the Chicago factory in 2004, ultimately revitalized Radio Flyer. Today, the company attracts top-tier designers and marketers, ensuring that Radio Flyer wagons, tricycles, and scooters remain cherished staples of American childhood. This example highlights the critical need for a family business to adapt and evolve, even if it means diverging from established operational norms.
The statistics surrounding family businesses are stark: a significant majority either dissolve or are sold before reaching the second or third generation. Succession is a major hurdle. Spencer Burke, an executive at St. Louis Trust and lecturer at Olin School of Business, offers valuable insights into the longevity of multigenerational Evergreen families. He observes that these successful businesses maintain “equity ownership…controlled by a single person or entity that has a very long life.” Burke terms this “good hygiene,” emphasizing the importance of protecting the business from external financial pressures. He notes that later generations often strategically streamline ownership and management, proactively buying out dissenting voices and recruiting highly skilled external professionals to manage daily operations. This “embrace of professional management at every level” is crucial for navigating the complexities of modern business and ensuring sustained success for a family business.
Beyond internal family dynamics and professionalization, external support networks are invaluable for family business owners. The Tugboat Institute Summit itself serves as such a community, fostering a sense of camaraderie and shared experience. Interactions with fellow entrepreneurs like author Bo Burlingham, bicycle-maker Ross Evans, and logistician Tim Barrett, among others, create a feeling of brotherhood and sisterhood. Similarly, engaging with business scholars like Calvin Tsay and Mac Harman provides access to expert insights and peer-to-peer learning. This supportive community offers a vital sounding board and source of encouragement, essential for navigating the often-isolating challenges of leading a family business.
The deep connection between family and business was a recurring theme throughout the summit. A poignant example arose in a conversation with Paul S. Mears III, who grapples with the future leadership of his Orlando-based transportation firm, founded by his grandfather in the 1930s. Paul, now running the company with his brother, employs over 3,500 people and faces fierce competition from ride-sharing giants like Uber and Lyft. While currently in his prime, he is already contemplating the immense pressures his successor will inherit. The weight of legacy is palpable as he reflects on his lineage: “My grandfather was the senior Paul Mears, my father was Paul Jr., and I’m Paul the third. My 20-year-old son is Paul Mears IV.” This generational continuity presents both a profound opportunity and a daunting challenge, not just for his son, but also for his three daughters. Paul III is preparing for the complex conversations about succession that lie ahead, a testament to the long-term vision inherent in a family business.
In contrast, my own father made a different succession choice. He wisely transferred ownership of his engineering firm not to his children, but to a talented young engineer whom he trusted and admired – someone who subsequently became a valuable mentor to me. Despite this non-traditional path, the entrepreneurial spirit and values of a family business clearly influenced my own career trajectory. When I decided to name my content-marketing firm FitchInk, the decision was a nod to my father’s legacy. My wife and daughter’s unwavering support for this choice, symbolized by their immediate and heartfelt embrace, mirrored the very essence of family backing that underpins the enduring strength of a family business.
In conclusion, navigating the landscape of a family business requires a delicate balance. It demands entrepreneurial drive tempered with family considerations, a willingness to adapt and professionalize while honoring core values, and a recognition of the vital role of both internal family support and external community networks. The stories of Evergreen businesses and their leaders offer valuable lessons for any family seeking to build a lasting legacy that extends beyond generations.
