As a consultant to family businesses, my central goal is to bring about a smooth succession from a business, ownership and family perspective. Given that a majority of family businesses do not survive from one generation to the next, it can be complex. Two weeks ago I had the opportunity to witness perhaps the most effective method of bringing about successful succession for a family business: the Family Enterprise Center program at the Kenan-Flagler business school at UNC-Chapel Hill.
Most university-based programs focus on forming an educational and networking hub among local family businesses. The value of these programs is unquestioned considering they are found at universities around the world. However, the program at UNC is different: It focuses exclusively on educating and training the next generation family business member through its family business classes as a part of its regular degree programs.
Let me tell you about my afternoon at UNC. The kickoff was a roundtable luncheon with a family business course alumnus, a select group of undergrad and MBA students enrolled in the family business class, and an entering freshman and his father who runs a prominent fourth-generation family business in Durham. These folks represented third- fourth- and fifth-generation family businesses in industries such as food, drinks, pipes, books, car parts and even a conglomerate, with locations ranging from just down the street to around globe. As each student shares a bit about their family business background with the day’s guest speaker, the center’s two co-founders, Steve Miller and Cooper Biersach, facilitate a lively discussion.
Strategy and psychology
After lunch we adjourned to a classroom where the entire class assembled for the last Family Business class of the semester. After a quick introduction, the guest speaker, Ted Wentz, president of FireCraft and a program alumnus, began. This “guest speaker” was unlike any you have ever seen before. What was singularly unique was that his presentation not only articulated how he applied the teachings of the class to his family’s business, but actually demonstrated them in the class.
You must understand that family businesses are different from other businesses: Business is about being efficient and effective. Family is about mutual, unconditional love. So yes, Ted spoke in depth about business tactics and strategies. But it was his exposé of the emotional and psychological aspects of entering the business his father built that captured everyone’s attention. The truly amazing thing is that every guest speaker is of the same ilk.
The second half of the class was a formal case study discussion about the family business they just heard about. That’s right, instead of reading a case study, the case study comes and presents to the class. It was during this second half of the class when the course explained some best practices of family businesses, tied to the live case study. Student Gabriel Portney put it this way: “The guest speakers are real family business people, so we get the practical insights combined with the theory.” Adjunct professor Steve Miller says this is all by design. “The best way to convey the complexities of family business is to hear it directly from family business leaders and then discuss the main principles and theories.”
Family values matter
Also by design were the three main assignments: create a family tree focusing on family values, develop a strategy for your family business and address a key issue facing your family business. Student Graye Pelletier said this was the perfect method. “It enables the potential family business member to engage and explore the family business, and vice-versa, without overstepping boundaries or making commitments.”
Sending potential family business successors to a university with a family business program such as UNC, while not practical for everyone, is certainly an excellent way to prepare them to effectively enter the family business. But, center director Cooper Biersach said, “the Center has now built up such a strong family business program that applicants are choosing UNC over other schools in part because of the program.” The entering freshman from Durham did.
Henry Hutcheson is a nationally recognized family business speaker, author and consultant in Raleigh. Send questions to email@example.com.