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Making a Family Business Work for Generations

by Julie Anne Russell |March 12, 2019

Family businesses can adapt and change with the times, or they can falter on common stumbling blocks.

One such potential pitfall: when the reins are handed down.

"I've seen a lot of conflict between next-generation talent and first-generation stubbornness," says Jeffrey S. Davis, chairman and founder of Mage, a Newton, MA, consulting firm that works with family businesses. "That becomes a very big distraction."

The imperative, Davis says, is to not let these business issues morph into emotional issues within the family. Here are some tips to avoid those rifts and make a business work across multiple generations.

Joe was wise enough not to push the issue as his sons, Brian and his twin Mark, pursued careers in other fields. "He always told us, you'll go out and learn your way before you ever come back," Brian recalls. "It was a really important piece of advice."

Years later, when Brian and his wife wanted to move out of New York City to raise a family, he decided to leave behind a successful career in advertising to return to work with his father. Now, nearly two decades later, Brian and his brother Mark — the third generation of the Nicholson family business — are majority owners of Red Jacket Orchards. What's more, the brothers have pushed the company to seven-fold growth by expanding what was mainly a retail and wholesale fruit business into a fruit juice and beverage company.

a woman and a man stand together over a work table while looking at a laptop

Welcome next-generation skill sets

Another benefit of gathering work experience outside the family businesses is that those new skills — and potentially best practices learned in other fields — can be applicable to the business, and help it grow stronger.

"In general, people should start in an area of business need and an area where you have skills, and build from there," Davis says. "No matter who you are, you should build from success."

Case in point: Twenty-something siblings Maggie and Matt McCarron both chose to work with their mother, Katie, at Portland Pet Food Company, an Oregon-based business Katie founded four years ago. Maggie, an actress, uses her voice-over ability and knowledge of the film industry to develop the company's video content. "I started to see my own place within the company and what I could offer," says Maggie.

Matt joined Katie at the outset of the business when she was selling at farmers markets. His interest in science and nutrition — he's currently in medical school — lends itself to the development of the Portland Pet Food's natural dog food and treats.

"Their lives are still evolving," says Katie, "but it's really nice that we've been able to fit the pieces together, and use everyone's qualities and capabilities to make the company grow."

Evolution isn't optional

While fruit remains firmly a part of Red Jacket's DNA, its expansion from a roadside stand to a juice company is the type of future-focused planning that helps companies withstand the test of time. "We stand on the shoulders of our father and grandparents," Brian Nicholson says.

The traditions of the past are important, but according to Davis, history does not keep you in business. "Focus on what the market wants," he adds. "Evolve your offering and your history to meet [its] current demands."

It's a sentiment echoed by Janet Webster Jones, owner of Source Booksellers in Detroit, MI. "When people ask me about business, I tell them that the business will let you know what to do," she says. "A lot of things will tell you what the marketplace really wants you to be."

Jones' business has certainly evolved: She began as a book vendor, opened up her brick-and-mortar store in a shared space with other entrepreneurs in 2002, and then, in 2013, opened her store in its own space. The business has been shared with the second generation from the beginning. Janet's daughter Alyson started working part-time alongside her mother and is now a full-time employee. Another daughter, who is a professor, contributes with ideas for marketing, connections to authors and suggestions for titles the store should offer.

And, while Alyson has learned a great deal from her mom — including how to build out their distinctive niche of non-fiction titles — Janet points out that she has been a student, too, learning 21st-century marketing tools from her daughter. "I'm not the most social media savvy person, and she's helped me to appreciate the use of it for people to know about what's going on here at the store," Janet says. "I've learned a lot from Alyson."

As Davis points out, when those in charge keep an open mind to their kids' ideas it's a boon to family businesses — both in growing the business and keeping relationships strong.

Julie Anne Russell

is based in Brooklyn, NY, and writes on all types of businesses, from thriving family companies to entrepreneurial ventures.

The content reflects the view of the author of the article and does not necessarily reflect the views of Citi or its employees, and we do not guarantee the accuracy or completeness of the information presented in the article.