Your Family Business (Beyond 2019)

New year goals-web

It doesn’t take a crystal ball. But it does take planning. Here’s how you get started.

Like a fair number of Home Furnishings Association members, one of our consultants is on the board of his country club. His club, like many around the country, has come face to face with the realities of the new normal economy and the question of how to serve the changing needs of a new generation of club members. His committee has been charged with defining (redefining?) who they are as a club and what they envision for the club over the next 25 years. In short, they’re developing a strategic plan for how to stay in business for another generation or two and for how to be as successful in the future as they have been in the past.

The club is faced with plenty of challenges:

The club has largely been run by older golf members who are very set in their ways and don’t like change.

These older golf members are often financially comfortable. That means modest dues increases or assessments aren’t likely to trouble them all that much. The same increase in dues or assessments might not be received so well by younger members with growing families.
Older members won’t be around forever, so clubs need to find ways to attract new members.

There’s just one problem. This is 2019 — not 1999. What difference is there in a generation, you might ask? In today’s world, where the nuclear family is the dominant focus, the time commitment required to play golf, much less be good at it, is a barrier that precludes young families from joining and utilizing club facilities as previous generations had done.

Whereas past generations considered it a mark of success and prestige to join a country club, societal norms have changed. Today, country clubs can be viewed by some as snobbish and elitist. There were slightly more than 5,000 member-owned, full-service golf and country clubs in the late 1990s. In 2010, about 4,100 were still around. Today, there are about 3,900.

Country clubs carry considerable legacy costs, including golf courses, aging buildings and physical plants, meeting spaces, bars and restaurants, banquet facilities, etc.

Many private clubs are afflicted with a form of schizophrenia and will need to decide their core missions going forward: Are we a golf club? Tennis club? Pool and swim club? A social club? A family and fitness club?

Establishing a new vision and determining the solutions to these challenges will help the club define what its offerings to members and potential members will look like going forward.

While we were discussing the challenges of country club management, we also blundered into the subject of church management. Our consultant said, “If you don’t have young kids in your church, the church is one step away from the grave.”

Bruce Stanley, president/CEO of the Methodist Home for Children, put it a different way: “Sixty, 40, 20 is a dangerous predictor. If 60 percent of your people have been Christians for 40 years and part of that church for 20 years, change will be almost impossible to effect.” The discussions of challenges facing country clubs and churches brought me back to my favorite subject — your retail furniture store.

If setting a strategy for a country club or a church is so challenging — and it is! — why is that any different from running and planning for the future of a family owned home furnishings business? If a family business has older leaders who are set in their ways and don’t like change, and who are financially comfortable, if the family business has legacy costs in terms of aging buildings, physical assets and people, and if the family business is afflicted by a form of schizophrenia in determining its mission for the future, how is that any different from your church or your country club? Are not the afflictions of a mature business populated by aging people crying out for the same kind of reflection and reinvention our consultant and his committee are putting into his club?

A few years ago, a third-generation family business executive — we’ll call him Stan — called wondering how he and his cousins were going to achieve the same kind of success their parents and grandparents had enjoyed. We talked for an hour or so, and we settled on a solution: The family business should undertake a vigorous round of strategic planning to define what it stood for, its purpose and mission, and what business they were in, so they could set goals and develop long-range plans. He was excited! His dad, again like many of our readers, was on the board of directors of the local bank and was jazzed about the recent successful strategic plan the board had put in place. Stan saw the parallel and thought it would resonate. It didn’t! Dad loved the strategic planning process and the plan the bank had developed, but he saw no reason why the family business should do anything of the kind. He didn’t see the parallels at all! Stan was flabbergasted, to say the least.

If it makes sense to peer into the future and do long-range planning at your country club, at your church or at your bank, why doesn’t it make sense to do the very same on behalf of your family business? In 2019, your store deserves the same tender loving care in redefining and reinventing itself to serve different customers and constituencies in a different future.

Start by carving out some time — at least a half day per month in the beginning — to bring together family and key employees to talk about the future. It might sound nebulous and “touchy-feely,” but the first thing you’ll need to establish is your vision for what the family business should look like when you’re finished with it in 25 or 35 more years. What’s the purpose of your business? What parts of the business bring you the most joy? How are you uniquely able to serve your customers, and what makes you different from every other furniture retailer in town? What are you better at than the competition, and at what are they better than you?

You don’t necessarily need a four-page agenda for starting these discussions; you just need to block out the one crucial ingredient that family business leaders never seem to have enough of: time.

Get the conversation started, have someone in the group take notes to make sure you capture important information and revelations, and get back together regularly to build on what you’ve accomplished. Eventually, you might want to bring in an outside facilitator to help you take your informal conversations to a higher level and build out the specific plans you’ll need to achieve the goals your team has envisioned.

About the Author

Wayne Rivers
Wayne Rivers is president of The Family Business Institute. He has appeared on The Today Show, CNN, CNBC and is an expert panelist for The Wall Street Journal. He can be reached at wayne.rivers@familybusinessinstitute.com.