Family-owned businesses, more than 32 million strong, are the backbone of the U.S. economy. According to a February 2021 research report, family businesses employ over 83 million people in the U.S., and account for 54 percent of total private sector GDP. The survival and growth of these family firms is critical for our country’s economic recovery in 2021 and beyond.
But that survival is by no means guaranteed. Eighty-one percent of family firm owners surveyed by Family Enterprise USA reported suffering financially during the pandemic. This financial hit may intensify the challenges of succession planning and transition that all family companies face. Historically, 30 percent of family-owned companies shut down during the transfer of ownership and management from founders to the second generation. Even if that first transition between generations succeeds, the majority of family firms do not survive beyond the second generation of owners. A Baby Boomer bulge in the number of family business owners currently over 65, combined with a lack of interest among younger family members, will bring even more pressure on planning for a smooth succession between generations.
What strategies will be most helpful to family business owners as they plan for that inevitable succession process? One surprisingly powerful factor in successful multi-generational succession is a well-told and widely shared company origin story. Consider the impact that its origin story has had on the longevity of Highlights Magazine.
Highlights for Children, Inc., the publisher of Highlights Magazine, has expanded to become a global media powerhouse since its founding in 1946 by Garry Cleveland Myers and his wife Caroline Clark Myers. To ensure that Garry and Caroline’s 75-year-old founding story resonates with today’s Highlights employees, partners and subscribers, the details feature prominently on the company’s website in an engaging voice with human interest and a clear statement of values. The story goes like this:
It all started in a two-room office over a car dealership in Honesdale, Pennsylvania.
The year was 1946. After decades as teachers, lecturers, and nationally recognized leaders in education and child development, Garry Cleveland Myers and Caroline Clark Myers created Highlights, a monthly magazine for children ages 6 to 12. They filled it with stories, adventures, brainteasers, and, of course, our beloved Hidden Pictures puzzles. It reflected the Myerses’ philosophy that children become their “best selves” by using their creativity and imagination; developing their reading, thinking, and reasoning skills; and learning to treat others with respect, kindness, and sensitivity.
Kent Johnson, the current CEO of Highlights and the founders’ great-grandson, earned his PhD in physics from Harvard University in preparation for his chosen career in scientific research and development. Kent says candidly that for many years he had “no aspirations to work in the family business.” What changed his mind? In part, the compelling origin story of Highlights, including the commitment and resilience his grandparents demonstrated in the face of financial setbacks, sales challenges and a tragic plane crash that claimed the lives of family members who were slated to become the next generation owners. In the face of all setbacks, family members came together to carry out the founding mission, to “help children become their best selves by publishing content and creating experiences that engage, delight, and foster joyful learning.”
This founding mission, origin story and Highlight’s emphasis on valuing excellence, creativity, teamwork and integrity resonate with employees, helping the company to attract top talent. Its clear sense of purpose and commitment to children has been handed down intact across three generations. The company’s purpose, values and commitment to children builds loyalty in today’s parents who want the best for their own families. And not least, it motivates talented descendants of Gary and Caroline Myers to take their turn at leading the family business.
Family-owned businesses don’t have to have a 75-year history or a global presence to leverage the value of their founding stories. Small local companies will benefit from sharing their origin story, and especially the vision and mission of the founders, with their employees, community and customers. A well-told, widely known story will give their business a human face, increasing customer loyalty and employee retention.
Here are four essential steps to developing a long-lived family business story:
- Be authentic.The best stories are told in the voice of the founder, not in polished public relations phrases. What inspired the founder to create this particular product or service? What were the challenges in getting started? What makes the founder and other family members proud of their company today? What are their goals for the future?
- Talk about setbacks as well as successes.Every company runs up against unexpected problems. Being honest about setbacks, and how the family rallied (and maybe argued) in confronting a crisis, then found a path to survive it, are often the most inspiring elements of the story. Don’t leave them out.
- Share your story with the world.Including a short version of the origin story on the company website is just the starting point. Integrate the story with your mission and value statement so that it’s fundamental to company culture. Use it in recruiting new employees, and in orientation and training. Share it with your suppliers and business partners — and ask about their origin stories to strengthen the partner ties. Be creative in incorporating your story into all types of customer interactions, from advertising to support services to on-location signage.
- Keep the story up to date. Celebrate new chapters in your family business, including innovations in products, services and locations. Share your experiences and challenges during the pandemic, together with gratitude for supportive customers and employees. Recognize every family member who joins the company by incorporating them into your family story.
Written by Mary J. Cronin. Have you read?
Best Hospitality And Hotel Management Schools In The World For 2021.
Best Fashion Schools In The World For 2021.
Best Business Schools In The World For 2021.
Best Medical Schools In The World For 2021.
Follow CEOWORLD magazine on Facebook, Twitter, Instagram, and LinkedIn.
Track Latest News Live on CEOWORLD magazine and get news updates from the United States and around the world. The views expressed are those of the author and are not necessarily those of the CEOWORLD magazine. Follow CEOWORLD magazine on Twitter and Facebook. For media queries, please contact: firstname.lastname@example.org