Article | Family Business Alliance

SecurAlarm Celebrates 30 Years

Brothers and family business leaders standing next to each other similing.

Brent Van Haren, President and Todd Van Haren, Controller

Family business success is different for every family-run entity. There is no one-size-fits-all approach.

To honor and celebrate our members who have achieved “Milestone” anniversaries, we are sharing insights into their business journeys. In our first highlight, read what second generation leaders, Todd and Brent Van Haren, share as they reflect on the 30th anniversary of SecurAlarm.

About

SecurAlarm is a second-generation, family owned business located in Grand Rapids. They specialize in providing comprehensive commercial security services – from cyber security, building security, and more. They proudly address the risks and concerns of their clients from physical property to business continuity.

Gloria Lubben and Pat Van Haren

Where and how did the family business journey begin?

It began in the heart of another family business. Our father, Pat Van Haren, began his career teaching but quickly realized it wasn’t his passion. He shifted to wiring houses and businesses with his dad who was operating a small electrical business, Van Haren Electric. It quickly grew into a successful electrical contracting business defined by high quality people and installations.

Gloria Lubben joined Pat and his brother, Brian, to launch SecurAlarm Systems, Inc as a subsidiary to Van Haren Electric. At that time, there was a gap in the market for delivering complex solutions with high level quality. They cared enough and believed they could do better in protecting what matters to businesses. This is why we exist today.

Todd Van Haren speaking on an FBA event panel

What’s been most surprising about your family business journey so far?

The generosity of other family businesses and how invested they are in seeing each other succeed. We have learned so much from our fellow FBA members through Peer Groups, events, workshops, and other connections. While each business is different from a family/corporate structure and industry perspective, it’s amazing the similarities and challenges we share.

If you could go back in time, what’s one piece of advice you’d give yourself?

Van Haren Family Photo

Enjoy the time with prior generations. Capture their story and preserve it. It has shaped so many aspects of who we are. While some aspects might not be as favorable as others, try to understand and leverage them.

Also be intentional about including all family members (spouses, siblings, parents, children, etc.) that aren’t directly involved in the business. Family can be a huge strategic advantage and it’s important to keep everyone informed and engaged.

In SecurAlarm’s 30-year history, what do you see as the family business’s most important contribution?

Remaining dedicated to why we exist: We Care, So We Protect. It drives our decisions, how we measure success, and how we serve our community, team, and clients.

We are in a rapidly changing cross section of industries (construction, security, and technology) and we look to our WHY whenever we’re at a crossroads. We engage with empathy and a desire to see our team, clients, and partners succeed. We invest significant energy into making sure whoever we encounter feels cared for by listening, confronting brutal facts, and taking action on whatever is holding us back. Because of this, our team members tell us they are better individuals, spouses, siblings, friends, and leaders. Our clients trust us and lean on us for guidance.

What do you identify as a pivotal change throughout the business’s history?

Over the last year, SecurAlarm has embarked on a business model shift, which we are still in the midst of. We are shifting our focus from products to services because we believe security is so much more than technology and transactional relationships.

We want to align technology, procedure, and training unlike any other security integrator out there. We want to deliver personalized, comprehensive, and strategic plans and solutions to our clients, who we think of as partners. So much change is required, and it will be a long journey, but we know it will allow us to better serve our team and clients for another 100 years. Why the shift? It goes back to our Why, of course! We Care, So We Protect.

All photos are courtesy SecurAlarm.

This feature is part of our Member Anniversary Program. For more information or if you are interested in exploring opportunities to be featured, please email aislinn@fbagr.org.

Family Business Alliance strives to help family businesses with the tools, resources, and connections to help businesses succeed. Learn more about our resources including Leading Forward, Succeeding in Succession, and Navigating Governance that help to advance family business in our community.

Small Business Week Feature: GL Resources

As part of our Small Business Week celebration, we sat down with the family behind GL Resources – George Snyder, Joanie Snyder, and Alan Snyder to learn about their business and what it’s like working together as a small, family-owned business.

Where It All Began

Founded in 1982 by George Snyder, GL Resources is a first-generation family business location in East Grand Rapids. They represent furniture component manufacturers, and sell hardware, including drawer slides, kitchen hardware, hinges, and more. Connecting furniture manufacturers and hardware manufacturers from a variety of industries, GL Resources works with companies of all sizes.

George and Joanie Snyder stumbled into owning their own business by chance. Both had previous careers and were originally from Pittsburg. When a friend needed a representative in West Michigan, the high school sweethearts decided to take the leap and relocate East Grand Rapids. Taking this position laid the foundation for what eventually became GL Resources.

In 1984, George went completely on his own and they incorporated. “We had no plan,” says George, but they were up for the challenge. “Back in the 80s, there were a lot more furniture manufactures here, and there was quite a base in Western Michigan.”

Since the early days, the business has grown in many ways. One progression was adding three additional sales representatives in the early 1990s, all of whom are still with the business today. Together, they cover the Midwest – including Michigan, Indiana, Ohio, Kentucky, Illinois, and Wisconsin.

Working Together

Most recently the family welcomed Alan Snyder, their son, into the business in January 2021. Alan’s focus has been on growing the business and expanding into new product types and creating new partnerships throughout the US. His wife, Nicole, has recently joined the business as well, truly making it a family affair.

Before joining, Alan worked for a few notable local, family-owned corporations, including Steelcase and Bissel as a financial analyst. “I knew it was time for a new opportunity.” It was at that time that George approached him with a job offer. “We’ve been talking, and we might have a job for you at GL Resources.”

Alan notes it was the first time they had discussed him joining the business. “I was very excited about it. Working here was always in the back of my mind, but I wanted to build up other experience and learn from other companies first.” Although the business was not founded on the premise of passing it down, the family expressed that having the second generation involved has given them a transition plan.

“It’s a cool little business, and we felt if we could transition the business with Alan, it could go on another 40 years. If you don’t, it ends.”

Joanie, who serves as President, has been there since the beginning. After having their first child, she officially began working for the business. Beforehand, she had a career as an accountant, so managing the bookkeeping for GL Resources was a natural progression. Initially a spousal-run family business, George and Joanie’s differences also became their strength as owners and partners.

“I came from a very structured business environment,” says Joanie. “So, I tried to bring that structure here, but it took a while for us to figure out how best to do this.” As a “details person,” Joanie is now responsible for many of their organizational processes, formal structures, and general management. Conversely, George is the risk taker, so Joanie’s influence allowed him to focus on sales and vision.

Bringing in the second generation has helped professionalize the business in various ways, as is typical transitioning from the founder’s dream stage.

“Alan has really opened our eyes to be more forward thinking,” shares Joanie. Navigating generational differences when working together is inevitable in family run organizations, but the Snyder family has thoroughly enjoyed working together.

The Importance of Small and Family-Owned Businesses

When asked about the importance of small and family-owned businesses, Alan expressed that statistically, small businesses employ a significant share of the country’s workforce. “I don’t think you realize that coming out of college as a young professional. Not everyone has the opportunity to go work from a family-owned business, but they are everywhere.” While Joanie stated that small businesses are “the backbone of America.” It is no easy feat starting and running a small business, and George explains he is proud that they have remained in business for 42 years.

The family takes pride in their business and its history. Decades ago, Joanie would bring her sons into their office with her while she worked, which wouldn’t have been possible at a corporation. “That’s a unique aspect of small businesses, having the flexibility to do both.” This history creates a special atmosphere within the family business. In reflection, Alan shared: “My mom brought me in, and now my wife is bringing our two-month-old in, and that is special.”

Community Involvement

For many small and family businesses, community is key. When he was first getting started, Alan leaned on resources like the Chamber Roundtables for support. “I was brand new to the sales role, so being with other sales professionals helped.” Being involved with Family Business Alliance and the Chamber has helped with various professional development areas, networking, and learning about other businesses in the community. The Family Business Alliance forums “are great information sources and it’s also great networking.”

“Alan has done a great job branching out, being involved with the Grand Rapids Chamber and Family Business Alliance,” explains George.

Alan has also recently joined a Peer Group. He explains, “I like to hear other people’s perspectives on how they are handling challenges within their businesses and grappling within their families.” For example, Alan has two brothers, one of whom may also be interested in joining the business at some point. “Hearing how they are handling it has been helpful for me to navigate how we should approach that in our family.”

This interview has been edited for length and clarity.

Written by Aislinn Teachout

Succession: Why Logan Roy Was Doomed to Fail

HBO Succession cast seated posing for a serious photo.

Image by HBO

If you are a family business leader, don’t be a Logan Roy.

For the last three years, millions of viewers have tuned into HBO’s hit TV show, Succession waiting for Logan Roy to identify a successor for Waystar Royco. The series magnifies all the complex drama which can plague a family run organization, but after 4 seasons, I do agree with Logan – they are all “idiots,” and Waystar Royco should not be succeeded to any of the family members.

So, why was Logan doomed to fail in succeeding the business to his children? He ignored crucial components and best practices of family business leadership development. As each character develops through the series, viewers are tasked with evaluating them and trying to fit a square peg in a round hole.

We come to understand that Connor has disengaged from the business completely and lives an entitled lifestyle without any sense of obligation to the business or community. He continues to purge his financial resources on an election campaign where he polls at 1%.

Kendall, who appears in season one as the “chosen” son, lacks instinct, confidence, and organizational knowledge. When he appoints himself as CEO after his father’s airborne stroke in the opening scene, it is only then that he learns the organization is $3 billion in debt. He is also plagued with addiction and self-destructive behaviors attributed to his relationship with his father.

Shiv, a politically savvy and competent political consultant, is filled with insecurity. Even when it comes to her judgement on picking a political candidate – the one area she is most qualified for – her expertise was undermined by Logan.

And, finally, Roman, the youngest Roy child, constantly lives up to the “baby of the family” monolith and is enabled by Logan despite being incapable of cultivating relationships, personal or professional. We learn that despite being fired from an entry level role in the family business, he has earned a seat on the board and is eventually hired as Chief Operating Officer.

Kendall Roy from Succession looking serious with the quote "I love you, but you are not serious people," from Logan Roy typed out.

Image from Reddit / turdette_ferguson

Based on this assessment, Logan Roy was right when he said, “You are not serious people.” The children are not capable of taking over his most prized possession, yet in many ways, he set them up for failure. If you are a family business leader, don’t be a Logan Roy.

HBO’s Succession captures many of the stereotypes of family businesses and their heirs, and the series is just one exaggerated example of what not to do. Successful family business leadership transitions take years of careful consideration and planning. They require consistent attention, re-evaluation, communication, and should include a backup plan.

Here are a just a few considerations for family business leaders as they seek to identify their own successor:

Define Leadership Needs of the Organization. Establish a leadership profile based on the opportunities, threats, and weaknesses of the organization. Consider the input from outside advisors, board of directors, and senior level management. What are the skills required to move the organization forward and to serve as the next steward of the organization?
Define and Establish a Path to Leadership. No one starts at the top, even if they share the last name of the Company’s founder. Maybe the family member works through a management training program and experiences various aspects of the business, all these norms can be established through good governance.
Utilize Leadership Development and Assessments Resources. History has demonstrated that the most effective leaders are self-aware. Assessments provide an objective view of the skills and capabilities of each family member. Once the assessment is completed, you have a professional development roadmap. Support individual development by engaging in leadership conferences that are dedicated to the development of family business leadership skills. Create opportunities for transparent and consistent communication through an annual review. Recognize the “perfect leader” does not exist and begin to develop a senior leadership team to support the next generation leader.
Develop Professional Skills Outside the Business. A widely accepted best practice for family business organizations is to establish a governance policy which requires all family members to develop professional skills outside the business. This provides the family member an opportunity to build professional networks, gain organizational operational insight, and create diverse perspectives.
Hire Based on a Job Opening and Alignment. Every Next Generation leader will be scrutinized when they join the business. Family members should be hired based on professional skills and experience to fill a need. Their entry point should be commensurate with the skills and experience they bring to the job and follow employment and market compensation guidelines.
Identify Development Paths within the Organization to Build Confidence. Find opportunities for development within the organization in either roles or special projects. Many organizations rotate family members through departments to learn integral sections of the business. Others can create opportunities with new product lines, innovation projects, and market expansion opportunities. These roles provide learning opportunities for the next generation to develop confidence while also earning respect and credibility with other organizational stakeholders including other leadership, clients, and employees.

If you seek to succeed in succession and transfer your family business to the subsequent generation, investing in leadership development and good family governance are two of the critical components to ensure that your legacy, values, and your organization survive for years to come.

Written by Robin Burns

Get to Know Your Ambassadors: Alex Boelkins

Family Business Alliance Ambassadors are volunteers for FBA who are committed to helping members get the most out of their membership. They are all individuals who have been very involved with the organization and have used resources and programs to help strengthen their businesses and families. Ambassadors are available as a resource to our members for any questions they may have from a member’s perspective.

Alex Boelkins is one of FBA’s committed ambassadors serving the family business community on his own time. Get to know Alex with his answers to our questionnaire below.

How did you first get involved in FBA?

I read an MiBiz article about family business succession and learned about the Family Business Alliance and their presence in West Michigan. It sounded like an intriguing organization, so we reached out to learn more and became FBA members within a few weeks.

Why is FBA important to you?

The FBA provides a safe forum for discussing the unique challenges and opportunities within family businesses.

What has been your favorite FBA event or activity?

I had the opportunity to immediately join a new Peer Group, and it has exceeded my expectations. Meeting monthly with a group of NextGen peers has provided the sounding board and external feedback I’ve been looking for as a young leader in a family business.

Why do you think family businesses are important to West Michigan?

“Family businesses can be capitalism at its best”, and in West Michigan, there are a lot of examples being lived out on a daily basis. If we can build and steward long-lasting, privately held companies, we will continue to enjoy a strong business community that puts people first.

What are some of your favorite hobbies?

I’m a father to three young kids, so I work hard to get them outside as much as possible! Bike riding, canoeing, and camping are all family favorites.

Get to Know Your Membership Engagement Manager: Mary Cline

Why do you think family businesses are important to West Michigan?

Family businesses are the backbone of a vibrant community. Business families are deeply rooted in their communities. This connection facilitates close and long-term relationships all while making a positive impact within their community. Additionally, the family values tend to translate throughout their employees and into the greater community.

Tell us a little about your career/background before FBA.

I am a graduate of Hope College. I started my career working in advertising and marketing and worked in both Chicago and Denver. I took time away from the work force when my 3 sons were born. As they started school, I began to explore my yoga practice and pursued my 200-hour teacher training and then my 500- hour teacher training. I taught at a yoga studio in Redmond, Washington. When I went back to work full-time, it was a yoga student who invited me to interview, and eventually hired me to be the events and communications manager for the not-for-profit where she has served as Executive Director. I moved back to Michigan in 2016 and have worked in events and corporate relations for the Crohn’s and Colitis Foundation and Samaritas.

What do you enjoy most about living in West Michigan?

Some of my favorite memories are my summers spent in Northern Michigan.

What is your favorite (non-work related!) hobby?

I love to practice yoga, ski, both X-country and downhill, play tennis, sail, bike, water ski and float on a tube in a lake.

Tell us a little about your family.

I have 3 sons. Two are attending Purdue University. One is a senior and will move to Cary, NC upon graduation this spring for a job. The second is a freshman in First Year Engineering, he will enter into the Electrical Engineering major next year. My youngest son is a junior at East Grand Rapids HS. He plays Water Polo and swims. I have 2 cats that were feral and starving when I encountered them. I just felt the need to feed them and make them comfortable with human touch. They now rule the home.

Fun Facts about Mary:

Favorite GR Restaurant: San Chez
Favorite TV Show or Movie: Succession
Favorite Book: Pillars of the Earth

Shop Local Family Businesses: West Michigan Holiday Gift Guide 2022

In West Michigan, we are fortunate to have a thriving culture of both locally owned businesses and family-owned businesses that contribute to the vibrancy of our region. Shopping locally helps keep more money right here in our community, strengthening our economy, and you can often find uniquely curated gifts within independently and family-owned business. There is no better time than the holiday season to think twice about where we’re spending our hard-earned dollars! Be sure to support local, family-owned businesses in West Michigan this season. Read on below for a list of ways to support some of FBA’s members – all of which have local, family ownership.

Baker Book House: Head to Baker Book House, a family-owned Christian bookstore for an ample selection of literature and curated gift items.
Baudville: For unique and customized gifts look no further than Baudville. The family-owned business has plenty of personalized gift boxes and customizable products for everyone on your list. Need gifts for employees? Baudville specializes in employee recognition gifting opportunities.
Big O’ Smokehouse: Stop in at Big O’Smokehouse market in Caledonia and pick up some of West Michigan’s best smoked fish products, spreads, jerky, and more! With 5 generations working in the seafood industry, their products will score big at your holiday parties and for the seafood lover.
Eastern Floral: From custom gift baskets, holiday plants and greens, to a curated gift shop, Eastern Floral can be a one-stop shop for gifts for others – and yourself! Consider one of their floral subscriptions or floral design classes for a unique gift.
Ferris Coffee & Nut: Ferris Coffee and Nut has ample gift options that are perfect for hostess gifts, employee gifts, and more. The 95-year-old family business has an assortment of holiday themed treats, gift boxes, and more that make for a delightful present.
Game Room Guys: Check out Game Room Guys’ selection of arcade games, pinball, air hockey, and more for the gamer on your list, or outfit your basement with a new game to keep Christmas night interesting!
Hometown Pharmacy: With over 36 West Michigan locations, Hometown Pharmacy is proud to offer excellent service with prescription maintenance, pharmacy services, and specialized gift departments. Plus, they offer free gift wrapping on purchases over $15!
Koorey Creations: Looking for a one-of-a-kind gift? Consider Koorey Creations’ custom jewelry services. They also offer several artfully crafted jewelry collections with ready-to-wear pieces.
Ludema’s Floral: For over 100 years, Ludema’s has been serving West Michigan’s with their garden and floral offerings. Pick up some beautiful winter arrangements, poinsettias, or give a gift card for the green thumb in your life to shop bulbs or starter plants come Spring.
Meijer: No holiday dinner or stocking is complete without a trip to Meijer!
Schuler Books: Find a special book for everyone on your list at Schuler Books. Don’t miss their curated gift selection!
Shannon Cohen: From inspirational books, to empowering mugs, stationary, and apparel, Shannon Cohen products are sure to be a hit with your holiday gifting.

Check out the family-owned service providers below for additional ways to support local businesses this season!

Catered Creations: Hosting the holiday party? Get in touch with Catered Creations for all of your catering needs.
Curtis Cleaners: Skip the laundry and opt for dry cleaning services before and after your holiday parties with Curtis Cleaners. The family-owned business has locations throughout West Michigan.
Evergreen Sprinkling: Give yourself the gift of less stress this winter and opt for Evergreen Springling’s residential and commercial snow removal services. (North Holland Only)
Holland Litho: For beautiful stationery and great customer service, consider Holland Litho Printing Service for any of your holiday cards or other printed materials.
Wonderland Tire Company: Need new tires before the lake effect starts? Check out Wonderland Tire Company for all your tire needs and routine car maintenance services like oil changes and alignments.

Did we miss an FBA business? Email us (fba@fbagr.org) to be added to this list!

Key Questions for West Michigan Family Businesses

1. What are our core family values and how do they impact our success?

Family values are defined as the underlying beliefs, principles, and ambitions of the family. A shared value system can unite family members and provide a framework for relationships with customers, employees, and the community. Values serve as a compass to help organizations navigate difficult decisions, drive practices and policies, and distinguish itself from non-family run organizations. How do you best understand and identify your family values? Look back at your family business history. Identify pivotal points in the organization and define the value characteristics that best define how your family responded.

2. How do we deal with inherent conflicts?

All family businesses inevitably will experience conflict. Family run organizations operate in three spheres – ownership, business, and family. This is widely described as an intersecting three circle model, and the intersection of the three spheres is where you encounter common conflicts. Some issues that create the most tension include the direction of the business, roles and responsibilities of family members, and compensation. Having family business advisors, outside council, or more formal governance structures can help to navigate and minimize conflicts.

3. What governance systems do we have in place?

Many family business organizations begin with a founder whose entrepreneurial vision launches and builds the business. They prefer an independent operating style and full control over decisions and direction of the organization. As the founder looks to engage the next generation and families begin to expand, there is the need for a more formalized governance structure. Governance structures assist in developing family relationships, support effective decision making, and strengthen accountability of all stakeholders. Board of Directors, Ownership Agreements, Family Meetings, Family Councils, Family Foundation and Family Office are some common examples of systems that are available as the family grows and ownership becomes more complex.

4. Do we have clear compensation and equity arrangements?

Unsurprisingly compensation and equity are often the most contentious issues in a family business. What are the expectations of the family members (active and non-active)? What is fair? What is equitable? Family organizations should have well-defined job descriptions, compensation packages, and promotion criteria for both family and non-family members. Some organizations separate equity and profit structures to ensure that the distribution of profits to family members is documented and fairly distributed to avoid additional controversy. Equitable is not necessarily equal for many family run organizations.

5. What are the obstacles facing family businesses today?

All businesses are currently challenged with talent and retention issues as well as implementing growth and innovation strategies. Family Businesses are also challenged with unique obstacles concentrating in areas of family leadership and ownership. In a recent survey of family businesses in West Michigan, leaders identified they are most concerned with properly preparing the next generation, adapting governance strategies, and implementing their family values. In terms of ownership challenges, they are looking for information and resources on shareholder responsibility, evaluating equity, and shareholder agreements.

6. Do we have a business succession plan?

If you do not have a plan, you’re not alone. According to a recent study by PWC, only 34% of family run organizations have a robust, documented, and communicated plan in place. Succession plans should incorporate all aspects of a family business including ownership, governance, and leadership. Succession planning is a long journey and often includes defining when family members may work in the business, how profits should be distributed, who may serve on the board, preparing future leadership, and other matters such as taxes, liability, estate planning, ownership stakes, and voting rights. From planning to transition, succession implementation can be a seven-to-ten-year process.

7. How am I engaging the Next Generation?

As they say, “All the flowers of all of the tomorrows are in the seeds of today.” Successful succession planning begins long before the next generation can determine their future career choices. Engagement for family run business should include education, communication, and collaboration. Formal and informal education should include sharing and documenting family history and family values. Whether at the kitchen table or a more formal family meeting – these are key opportunities to share information. Families should also explore digital communication vehicles (websites, social sites, or newsletters) to build and connect family members. Finally, creating collaborative opportunities around a project or charitable giving provides tangible experiences to build relationships, reinforce values and cultivate engagement.

8. Do I participate in the family business community and take advantage of resources?

While every family business is different, many share the same operating challenges. Connecting with and learning from other family business organizations while developing a confidential and supportive peer network is a great way to tackle these dynamics. Sustaining a family business is a journey, but you don’t have to do it alone. Family Business Alliance seeks to help family organizations in West Michigan thrive by creating connections, navigating governance, and elevating leadership for over 165 member organizations. Learn more about how we want to help your family organization at fbagr.org.

EPIC Awards: Family Owned Business of the Year

As part of our mission to advance family business, we are excited to announce a new collaboration with the Grand Rapids Business Chamber.

Since 2010, The Grand Rapids Chamber’s EPIC Awards have recognized the amazing organizations that are building this thriving community and supporting our region through EPIC (Entrepreneurial, Progressive, Innovative, and Collaborative) proportions. This year, Family Business Alliance teamed up with the Chamber to establish a category exclusively for family business organizations to engage and be honored for their efforts and innovation.

We are all aware that family run organizations positively impact our community and economy, so we are excited that an FBA member will have the opportunity to be recognized as the Family-Owned Business of the Year!

The award will be given to a family business that is either a Family Business Alliance Member or Grand Rapids Chamber member and exhibits the criteria below:

EPIC Organizational Awards Criteria:

Has a growth mindset and supports/demonstrates equitable entrepreneurship throughout the organization’s services and programs
Creates an organizational culture that is progressive – not afraid to put new ideas into practice and has an intentional focus on belonging and inclusion
Seeks out innovative opportunities to be creative in their designated industry and community by leveraging the organization’s diversity
Gives back to the larger community and is actively collaborative with other organizations and initiatives to create a thriving West Michigan for all

As an organization, you can either nominate yourself, or be nominated by anyone from outside of your organization. To nominate a deserving organization, complete the nomination form. Nominations close on Thursday, August 4th. After all applications are reviewed by an independent Chamber Peer Selection Committee, finalists are notified. Award recipients are announced the night of the event, keeping finalists and attendees on the edge of their seats.

We are thrilled to be able to formally acknowledge the positive impact that family businesses make in our community. Happy Nominating!

Timeline:

August 12th: Nominations Close
September 5th: 3 Finalists are chosen & contacted
October 4th: Finalist Reception
October 19th: EPIC Awards Gala

For more information, please visit the EPIC Awards page or email Aislinn Teachout, FBA Marketing & Events Coordinator, at aislinn@fbagr.org or Megan Steenwyk, Business Services Manager, at megan@grandrapids.org.

Why Won’t My Parents Retire and Let Me Run the Family Business

If you have spent your career preparing to take over the family business, it can be frustrating to wait for the senior generation to decide that they are ready to retire. It also may be hard to understand why mom or dad chooses to keep putting in the long hours and would rather deal with the challenges of the business instead of retiring and enjoying life.

For the next generation, the waiting is even more difficult if your parents have not created a succession plan. This causes great uncertainty regarding the role each person should be preparing for and how a successor will be chosen if a parent passes away without a plan.

Sometimes the wait exists because the parents may still enjoy running the business. They likely are in no hurry to let go of a company to which they have devoted their lives. Or, parents may not wish to deal with the complex emotions, the fear of the unknown or the hard feelings associated with choosing successors. These issues and others can create barriers to planning for a transfer of the business to the next generation.

If you want to help your parents focus on succession, it is important to understand the issues behind their reluctance to do this planning and understand the strategies for addressing them (warning: it might take years). Below are some common issues that our succession planning attorneys, working with the family’s other professionals, help families overcome to begin preparing for ownership transition and creating a succession plan.

Coping With Reasons Why Parents Won’t Leave the Business

1. They are uncertain about how they can be financially secure away from the business.
This one is huge, and succession will not be addressed if this concern is present. However, many options exist to solve this problem, and your wealth advisors and your attorney can certainly help you find one that is right for your family.

Common approaches include taking higher pay for a few years and saving it, selling a portion of the equity back to the business or to other family members, creating deferred compensation arrangements, or retaining assets to lease back to the operating business.

2. Their identity is tied to the business.

A parent may be able to identify a new role for themselves that is related to the business such as: Chair of the Board, consultant, informal advisor, trainer/mentor, representative to industry associations or other related groups, etc.
Depending on interests and skillsets, a parent can develop a new role relating to a family foundation, family investments, family governance, next-generation education, or a family office.

3. They worry that their life will lack purpose without the business to run.

After they have devoted decades to building a business, it may be hard for them to see that they could have an important purpose elsewhere.

Help them realize that as they transition the business to someone else, they can use their lifetime of experience to benefit others. Examples of new ventures could include starting a consulting firm, speaking on business or motivational topics, serving on boards of other companies or nonprofits, leading philanthropic organizations, teaching business classes at a college, working with local business associations or business startup programs, or coaching students in business/entrepreneur programs such as Junior Achievement or DECA.

4. They believe successors are not ready to run the business.
Find out what their specific concerns are and take steps to alleviate these concerns.

Seek opportunities to demonstrate the ability to succeed, including rotations through all functional areas of the company.
Engage in learning and development such as an executive MBA program, leadership courses, mentorship plans, connections with other business leaders, and working with consultants or mentors from other businesses.

5. They believe that they are irreplaceable.
Some of the strategies mentioned above can help with this concern too. However, this one may be difficult to address without outside help.

Make sure the senior generation gets exposed to the skills and successes of next-generation family members and a well-functioning management team.
Identify friends or business acquaintances who have successfully transitioned their business and who might be helpful examples or resources.
Consider meetings with former owners of multigenerational businesses now managed by the next generation. This could provide an understanding of the issues they faced during the process and help gather best practices.

6. They are avoiding hard feelings that will occur in the family when a successor is chosen.
This is where a good succession planning attorney or advisor can help your family design a plan that creates a win-win situation for the members of both generations.

You may need to enlist additional help to move your parents to realize that if they want to ensure the continued success of the company after they are gone, they need to make decisions now that will make that happen. Help them see that it is bad for the business and for the family to have the children fighting for company control while working through their grief after a parent’s death.

7. They equate retirement with a decline in health or even impending death.
Everyone has heard a story about someone who died soon after retirement, and even though this is rarely the case, some people still equate retirement with the end of an active, healthy life.

If you have solved issues #2 and #3 above, this may cease to be a worry for them, since they will be plenty busy. But if this worry still exists, there are plenty of resources and professionals to help you work through this issue.

8. They fear losing their prestige in the community (the business leader and/or the spouse).

This is tough to deal with, although having the leader continue working in a new role in the business, foundation or family office – one that still provides opportunities for networking, speaking engagements and social visibility – could certainly help.
Finding a board position or a leadership position in another organization, such as a nonprofit or industry organization, can also help with this.

Family Business Alliance, devoted to advancing family business organizations for multi-generational success, designs its programming, resources, and events to meet the needs of its members at these distinct stages. Currently, the Family Business Alliance represents nearly 170 member organizations throughout West Michigan and offers the opportunity to create connections, elevate leadership, and navigate governance. To receive more complimentary resources, connect with us online at Family Business Alliance.

This article is reprinted with permission from Warner Norcross + Judd LLP and author Bruce Young. This article is not intended as legal advice. For additional information, please contact Bruce Young at byoung@wnj.com

Understanding the Key Transitions in the Family Business Life Cycle

Understanding the key transitions in your family business in relation to the family business life cycle can help you navigate the unique operating challenges of leading and succeeding in a family business. With the help of Family-Owned Business Institute of Grand Valley State University and adaptations of several online resources[1], The Family Business Alliance has established a Family Business Continuum to help family businesses in West Michigan understand the distinct axes of the family business model and improve the opportunity for multi-generational success.

The Family Business Continuum Axes are defined as:

Ownership

The Family Ownership Axis identifies the key and controlling stakeholder(s) and is not linked to a specific generation. In many cases, the first stage of ownership is established based on a Founder’s Dream. The succession to the next generation can be either identified as a “New” Founder’s Dream or a Sibling Partnership. In a sibling partnership, the siblings jointly own the shares of the business, however, leadership may be singled out to a primary member. As the family and business operations grow, ownership models may evolve to a Cousin Consortium which includes extended family through multiple generations or may evolve to a model which includes Distant Relatives.

Leadership

The Leadership Axis defines the experience and engagement of family leadership in the business. Stages include Leading the Business where control is either one primary family leader or shared among siblings. The family leader(s) oversee all strategy and operations. In Joining the Business, a potential successor(s) is introduced to build professional experience, operational experience, and industry knowledge. At this stage, the business often

implements professionalization of roles and formal processes are developed. As the next generation has its own visions and often a strong desire to introduce more strategic thinking, they assume mid-level management roles, defined as Working Together. This leadership expansion phase is often linked with restructuring and may include the development of a board of directors, family governance policies, and family council meetings. Leadership succession can span more than a decade as a succession plan is created and implemented. Each generation transitions to new roles both internally and externally as they Pass the Baton. The family may also sell or expand to different markets and the family business may evolve to a Family Office.

Business

The Business Axis characterizes the stages of a business as it strives to move from a Start Up to Growth and Formalization, defined as the company leaving the niche market and entering a more competitive and larger arena. Often, organizations engage in strategic planning with outside professionals to meet organizational objectives to achieve Maturity and Stabilization. In this stage, the business focuses on the development of organizational talent and seeks to create a flexible framework to take advantage of market opportunities and manage threats. At Regeneration, the key stakeholders face a strategic choice for further growth and maturity. If reinvention is not prioritized, these businesses have a heightened risk of decline.

Understand your organization on the Family Business Continuum and download complimentary resources available through the Family Business Alliance. Serving over 165 members, Family Business Alliance seeks to advance family business in West Michigan. Together we, create connections, navigate governance, and elevate leadership.

[1] Sources: Ivan Lansberg, Succeeding Generations; Thwart Magazine, Family Business Life Cycle; Forbes How to Use the Family Business Life Cycle to Personalize your Family Office.

The Family Constitution: A Foundation for Family Alignment

Changing Disagreement into Dialogue: How to Manage Conflicts and Enhance Communication

Building Trust in Sibling and Cousin Partnerships: Moving from Partners of Chance to Partners of Choice

Your 7-Step Plan for Creating Chaos in Your Family Business

This article was originally published by Warner Norcross + Judd and has been republished with consent.

William Lentine

Most business owners know that proper succession planning can help keep their business running strong into the next generation. They understand the importance of creating a plan to prepare heirs and key employees to run the business when it is time. But sometimes owners are busy and fail to plan for the future of their business in a timely manner.

Executing an unplanned transition when the family business leader becomes incapacitated or passes can be painful for the family (at an already difficult time) and potentially damaging for the business. Families in this situation often engage Warner to help them create a path forward for the business.

We think it makes sense to offer some lessons learned by these families as a resource for current business owners. Instead of offering a typical “best practices” list, we took a different approach. Here are some “worst practices” that will surely wreak chaos in your family business after you pass – from families who have experienced an unplanned business transition

7 Ways to Create Chaos in the Family Business After Your Death

Don’t document your good intentions. Think about succession planning for years, but don’t document any of your thoughts or planning ideas for the family. Or, to make it really interesting, keep jotting down ideas on various notepads, napkins or sticky notes over the years, creating obvious contradictions between the ideas.
Leave business ownership to your family but without a skilled operator in charge of it. This spreads chaos over the widest possible range after your death, affecting family members, employees, customers, suppliers and professional advisors when the battle lines are drawn between children and possibly your spouse as they wrestle for control of the company while dealing with their grief.
Pick one winner. Leave both the business equity and control to one child that seems reasonably responsible and ask them to do the “right” thing for their siblings and remaining parent. For maximum family strife, the “responsible” child should be married to a spouse who is greedy or difficult to deal with.
Don’t do any estate or tax planning. This way your heirs will not only struggle with the above issues but will also inherit a huge tax bill that they were not expecting and will have to cover by taking out loans or by selling the business.
Micro-manage future leaders. Allowing your children or other key employees to manage portions of the business will allow a leader or group of leaders to naturally emerge, whereas micro-managing those heirs and other key employees in their current positions will ensure that they won’t learn how to lead, make decisions or accept responsibility.
Don’t discuss the future of the family business. Avoiding these conversations ensures that you won’t know whether your heirs or current managers actually want to run the business and allows you to create a pressing sense of obligation for the next generation to work in or run the business. Even better, this sense of obligation can create next generation business leaders who are resentful or who lack the passion that you brought to running the business.
Keep your professional advisors under wraps. Failure to introduce your professional team to your children can create havoc for your business because neither of these groups will be prepared to handle the inevitable difficult discussions that ensue during a transition. Plus, your children will not know and may not trust your attorney, CPA, investment advisor or other professional advisors, adding even more obstacles to this transition.

Having No Plan Can Also Cause Chaos in Your Business

Naturally, we wouldn’t expect you to do any of the things on this list on purpose to cause disruption and bad feelings in your family. But sometimes, not planning for the future can have the same impact on your family as if you had intentionally tried to cause chaos, leaving loved ones in a less than desirable position down the road should something happen to you.

Many of the steps involved in successfully transitioning a family business can take years, even decades to complete, so it is better to start planning sooner rather than later. Contact your Warner attorney or Bill Lentine at wlentine@wnj.com or at 248.784.5061 to begin planning for the eventual transition or sale of your family business.

Originally published by Warner Norcross + Judd.

Why Won’t My Parents Retire and Let Me Run the Family Business?

This article was originally published by Warner Norcross + Judd and has been republished with consent.

Bruce Young
Partner, Warner Norcross + Judd

Coping With Reasons Why Parents Won’t Leave the Business

1.They are uncertain about how they can be financially secure away from the business.
This one is huge, and succession will not be addressed if this concern is present. However, many options exist to solve this problem, and your wealth advisors and your attorney can certainly help you find one that is right for your family.

- Common approaches include taking higher pay for a few years and saving it, selling a portion of the equity back to the business or to other family members, creating deferred compensation arrangements, or retaining assets to lease back to the operating business.

2. Their identity is tied to the business.

- A parent may be able to identify a new role for themselves that is related to the business such as: Chair of the Board, consultant, informal advisor, trainer/mentor, representative to industry associations or other related groups, etc.
- Depending on interests and skill sets, a parent can develop a new role relating to a family foundation, family investments, family governance, next-generation education or a family office.

3. They worry that their life will lack purpose without the business to run.
After they have devoted decades to building a business, it may be hard for them to see that they could have an important purpose elsewhere.

- Help them realize that as they transition the business to someone else, they can use their lifetime of experience to benefit others. Examples of new ventures could include starting a consulting firm, speaking on business or motivational topics, serving on boards of other companies or nonprofits, leading philanthropic organizations, teaching business classes at a college, working with local business associations or business startup programs, or coaching students in business/entrepreneur programs such as Junior Achievement or DECA.

4. They believe successors are not ready to run the business.
Find out what their specific concerns are and take steps to alleviate these concerns.

- Seek opportunities to demonstrate the ability to succeed, including rotations through all functional areas of the company.
- Engage in learning and development such as an executive MBA program, leadership courses, mentorship plans, connections with other business leaders, and working with consultants or mentors from other businesses.

5. They believe that they are irreplaceable.
Some of the strategies mentioned above can help with this concern too. However, this one may be difficult to address without outside help.

- Make sure the senior generation gets exposed to the skills and successes of next-generation family members and a well-functioning management team.
- Identify friends or business acquaintances who have successfully transitioned their business who might be helpful examples or resources.
- Consider meetings with former owners of multigenerational businesses now managed by the next generation. This could provide understanding of the issues they faced during the process and help gather best practices.

- You may need to enlist additional help to move your parents to realize that if they want to ensure the continued success of the company after they are gone, they need to make decisions now that will make that happen. Help them see that it is bad for the business and for the family to have the children fighting for company control while working through their grief after a parent’s death.

- If you have solved issues #2 and #3 above, this may cease to be a worry for them, since they will be plenty busy. But if this worry still exists, there are plenty of resources and professionals to help you work through this issue.

8. They fear losing their prestige in the community (the business leader and/or the spouse).

- This is tough to deal with, although having the leader continue working in a new role in the business, foundation or family office – one that still provides opportunities for networking, speaking engagements and social visibility – could certainly help.
- Finding a board position or a leadership position in another organization, such as a nonprofit or industry organization, can also help with this.

If you are in a waiting situation that appears to have no end in sight, perhaps it is time to engage someone to help you have conversations about the future of the business. Our succession and estate planning attorneys can often facilitate these conversations and help families start planning for a successful business future. If you have questions related to succession planning or transferring the ownership or control of a family business, please contact your Warner attorney or contact Bruce Young at byoung@wnj.com or 616.752.2144.

Originally published by Warner Norcross + Judd.

Exit Planning Series – Are you Ready to Make an Ownership Transition?

This article was written and originally published by the DWH and has been republished with consent.

DWH and Adamy Valuation began a series called “Tactical Tuesdays” in 2020 in response to the impact of the COVID-19 pandemic on our clients and business partners. The goal of “Tactical Tuesdays” was to provide up-to-date information that would allow leaders to make tactical decisions to run their business. As COVID (hopefully) winds down, the Tactical Tuesdays focus is shifting to address longer-term issues. Over the next several weeks, DWH and Adamy will be publishing a series of blog posts around exit planning for business owners.

A transition of company ownership, whether internal or external, is a complex process. Before attempting to sell a business, owners should make sure they are ready. This means determining their desired outcome, developing transition thinking, understanding options, and assembling a solid advisory team.

Determine Your Desired Outcome

For an owner to successfully transition ownership of their company, they must first understand their desired outcome. Outcome considerations include:

For family-owned businesses, is there a desire to keep the business in the family?
Does the owner want to retire, stay involved in the business, or do something else entirely?
What is the desired timing for a transition?
How prepared is the management team or the successor generation to take over the business?
What is the merger and acquisition (“M&A”) environment in the industry?
How much does the owner expect to make?

The desired outcomes will drive the preparation and structure of a transition and transaction.

Develop Transition Thinking

Transition thinking involves two main ideas:

The role of an owner – Owners should focus on maximizing the value of the business through optimizing cash flow, minimizing risk, and putting the best possible leaders in place to run the business. The owner should discontinue any activities that do not maximize the value of the business.
Understand what creates value – Business owners should understand how investors value their business and what actions they can take to increase the value. Investors are interested in the strength and sustainability of the company’s future cash flows. Investors will also adjust the amount they are willing to pay based on the risks a business faces, such as expiring customer contracts or high turnover in key positions.

Understand Transaction Options

There are many options available to owners and we will cover this topic in a future blog post.

Assemble a Solid Advisory Team

Owners must have an experienced team of advisors to support them through the transition and transaction. Steve Whitteberry of Invictus M&A says, “Owners should invest the time to find qualified advisors including M&A attorneys, CPAs with transaction experience, and an experienced investment banker. A strong team is a key to a successful transaction.” Members of this team include:

Succession/Transition Advisor – This advisor supports the business owner by developing a transition plan, which includes the identification of opportunities to maximize the business’ value, and then helps facilitate execution of the plan.

M & A Attorney – Transactions can have a significant amount of legal complexity, so engage with an attorney that specializes in M&A activity in your industry and can support your team throughout the process.

Certified Public Accountant (CPA) – Many owners do not consider the impact of taxes on the proceeds from a transaction until it is too late. Have a CPA with M&A experience get involved early in the process.

Wealth Advisor – The wealth advisor works with the owner to develop a plan for managing the proceeds of the sale to achieve ownership goals.

Estate Attorney – In conjunction with the wealth advisor and CPA, an estate attorney can help an owner and their family setup a structure that minimizes taxes and protects wealth for the current and future generations. (We will cover estate planning in-depth in a future article.)

Investment Banker – The investment banker will help prepare offering documents, bring the company to market, vet potential buyers, and guide the company through the sale process.

Valuation Advisor – Many transactions fall apart due to misalignment in the purchase price. The valuation advisor provides owners with a comprehensive valuation of their company based on the company’s performance, asset valuation, and/or market comparisons. (We will cover business valuation methods in next week’s article.)

Key Takeaways

Determine the desired outcome of a transition.
Cultivate a mindset of transition thinking from an owner’s point of view; focus on maximizing the value of the business.
Owners should understand the value of their business and the ways to maximize it; increased cash flow and minimized risks.
Owners should have an experienced team of advisors to assist in the transition.

Additional Reading

Transition Before Transaction in Family Business – DWH | The Importance of Transition Before Transaction | Blog Post (dwhcorp.com)
Value Driver One – Value Driver One: Higher Profits and Cash Flow | (adamyvaluation.com)
Value Driver Two – Value Driver Two: Lower Risk | (adamyvaluation.com)
Value Driver Three – Value Driver Three: Higher Growth Potential | (adamyvaluation.com)
Strategic Planning and Value Creation – Webinar: Tactical Tuesdays | (adamyvaluation.com)

Written By:

Ben Borisch, COO, Partner, DWH
bborisch@dwhcorp.com

Monica King, CEO, Managing Partner, DWH mking@dwhcorp.com

Schupan & Sons: A West-Michigan Story of Family Business Resilience

This article was written and originally published by the Seidman Business Review and has been republished with consent.

Ana C. Gonzalez L., Ph.D., Assistant Professor, Department of Management and Director of the Family Owned Business Institute

COVID-19 has hit us all hard, individuals and organizations alike but with very different implications. Family businesses are no exception, of course. A survey conducted by the advisory firm Banyan Global found that even though family businesses are as concerned and focused as everyone on the short-term, having working capital and facing revenue decreases, they are not concerned in the long run about the overall health of their business (Liberti, 2020). This could be interpreted as arrogance, but it is not that at all. It is more confidence that, despite the uncertainty that the pandemic has brought to the world, family businesses have survived more than one crisis throughout their existence, and they have the resources and capabilities to manage and even thrive beyond the crisis. In other words, they are resilient.

Resilience is understood as “the reservoir of individual and family resources that cushions the family firm against disruptions and is characterized by individual and collective creativity used to solve problems and get work done.” (Brewton et al. 2010, p.156) Family business resilience has three main characteristics: 1) adaptive capacity, which refers to the ability to minimize the impact of environmental shocks; 2) strategic renewal, i.e. the ability to find opportunities despite the circumstances and materialize them into innovative solutions, and 3) appropriation capacity, associated with the use of past experiences and tacit knowledge to handle the post-crisis period (Mzid et al., 2019).

At the Family Owned Business Institute (FOBI)¹, in the early weeks after the lockdown, we interviewed John Barry, President of the Aluminum and Plastic Sales Division at Schupan & Sons, a West Michigan family business to learn if the company had deployed any of these characteristics and to ask about his perspective on the future. Schupan & Sons operates in the recycling industry, though not exclusively collecting and disposal. The company is vertically integrated with manufacturing operations and trading divisions. With over 700 employees, the family business is led by a second generation member, Marc Schupan, and both second and third generations are active in the business. Barry is a third generation company leader.

Adaptive Capacity
When the lockdown started, Schupan remained open as it was considered essential, even though the largest revenue producing division, the Beverage Recycling Division, was shut down by the governor as a contagion preventive measure. They applied early to the Paycheck Protection Plan (PPP) program and received a loan to protect employee jobs, and everyone was sent home with pay. Even though they work in an independent and decentralized way across five states, the leadership team (CEO and division presidents) met weekly for updates and spoke daily, as needed, to support each other and more importantly, to support customers. Barry mentioned that engagement with customers occurred as never before. In his own words, “We’re connecting customers with other customers. Sometimes we hear one customer saying I can only go 90%, but I don’t have the other 10%, and you’re able to connect them.” When asked why they were doing that, his answer was blunt: “If our customers don’t do well, neither do we.” In synthesis, they supported each other and customers and looked for resources available to deal with the emergency. They were able to pivot without firing employees due to the pandemic nor did they have a COVID-19 outbreak.

Strategic Renewal
When asked if the pandemic has triggered new ventures, Barry proudly nodded. This is the story: “A CRNA² came up with the idea of adding an additional layer of protection when intubating a patient. It’s a process that involves many aspirations, so the risks are higher for health professionals. The nurse contacted a mechanical engineer who’s also a friend of mine for help in the design, and my friend – the engineer – asked me if we could donate the material to build a few for the hospital. I said yes, then asked if they needed a hand manufacturing them, and he said, yes!” Therefore, they reconfigured the machines, and Schupan manufactured the 20 units they asked for as a gift. Then Barry added, “When they came to pick them up, only three could fit in his car.” Thus, they redesigned a collapsible unit. Barry negotiated with the nurse and his friend to patent and add the product to Schupan’s portfolio³. This new product has significant sales potential since the demand for these types of supplies has only increased through the pandemic. Sales of the product were increasing at the time of the interview. Moreover, the product was recently referenced in the Cleveland Clinic Journal of Medicine for intubation procedures (Chahar, Dugar and Marciniak, 2020). Having the flexibility to decide, reconfigure, and create is an example that illustrates a common family business strategic renewal capacity.

Appropriation capacity
Family businesses are known for their capacity to transfer not only the business across generations but also intangible resources, such as knowledge. This tacit knowledge refers to “the knowledge that is bound up in the activity and effort that produced it.” (Horvath, 1999, p. ix) The transmission of this knowledge is very common in family businesses (Gonzalez et al., 2011), and its use provides evidence of appropriation capacity. At Schupan, Barry mentioned that they have learned over time that diversification is a “must-do”, and this pandemic was proof of that. When the Beverage Recycling unit was unable to operate, they knew they could rely on the other divisions for sustaining revenue. Barry added that he knew there was going to be a contraction in demand for his division at some point because of the economic downturn, but he had confidence that the other divisions could “hold the storm.”

In addition, Barry reflected on the company’s commitment to customer service, which has been a hallmark since its beginnings. Customer support in service of value creation without exception and diversification to reduce risk, have been key tenets of the business during both good and bad times. This commitment reflects Schupan’s appropriation capacity.

About the future after/with COVID-19
Regarding the future, Barry mentioned that there is still a lot of uncertainty to plan for both next quarter and beyond. He continues to foresee a contraction in demand, and the Schupan leadership team is preparing for a “very tough two following years.” He did not deny his concerns with this outlook but confirmed that they are ready to deal with the crisis. They are focusing on efficiency, working capital, and on taking care of customers and employees. These principles should keep the company solid and strong for the long run. In this particular case, Schupan is confident that it has the resources and capabilities necessary to face environmental shocks. While not the only example in the region, Schupan & Sons is a good testament to West Michigan’s family business resilience.

¹ The Family Owned Business Institute (FOBI) is an academic center at Grand Valley State University Seidman College of Business that champions and serves family businesses through scholarship, education and advocacy. For more information visit gvsu.edu/fobi.
² Certified Registered Nurse Anesthetist
³ For more information visit: https://aero-guards.com/why-aeroguard/

References
Liberti, J.M. (2020, September). Family Businesses Are Experiencing the COVID-19 Crisis in Unique Ways. KELLOGG INSIGHT. https://insight.kellogg.northwestern.edu/article/family-businesses-experiencing-COVID-19-crisis
Brewton, K. E., Danes, S. M., Stafford, K., & Haynes, G. W. (2010). Determinants of rural and urban family firm resilience. Journal of Family Business Strategy, 1(3), 155–166. https://doi.org/10.1016/j.jfbs.2010.08.003
Chahar, P. (2020, May 13). Airway management considerations in patients with COVID-19. Cleveland Clinic Journal of Medicine. https://www.ccjm.org/content/early/2020/05/13/ccjm.87a.ccc033
Gonzalez. A.C., Gonzalez, G., & Diaz, L. (2011). The Role of Tacit Knowledge in the Identification of Entrepreneurial Opportunities: A Study of Family-controlled Businesses. In Understanding Entrepreneurial Family Businesses in Uncertain Environments. In Nordqvist, M., Marzano, G., Brenes, E., Jimenez, G., & Fonseca-Paredes, M. Understanding Entrepreneurial Family Businesses in Uncertain Environments: Opportunities and Resources in Latin America. Edward Elgar Pub. https://doi.org/10.4337/9781849804738.00015
Mzid, I., Khachlouf, N., & Soparnot, R. (2018c, March 27). How does family capital influence the resilience of family firms? Journal of International Entrepreneurship. https://link.springer.com/article/10.1007/s10843-018-0226-7?error=cookies_not_supported&code=e00aa023-7448-4da8-bb88-209e9cc4c3c1
Down, J., Sternberg, R. J., & Horvath, J. A. (2000). Tacit Knowledge in Professional Practice: Researcher and Practitioner Perspectives. Administrative Science Quarterly, 45(1), 170. https://doi.org/10.2307/2666987

FBA Coronavirus COVID-19 Updates

As you know, Coronavirus has hit Michigan, and companies, schools, and organizations in West Michigan are responding accordingly. In compliance, FBA is postponing all Spring events, including “Living Your Legacy,” Peer Group Recruitment, “Leadership in the Family” at GVSU, and the Board of Directors Workshop. We are looking to reschedule these later this year and will keep you apprised of these dates, as well as any future changes to our Summer events.

In the meantime, we encourage you to reach out to us if needed. Haley, Melissa, Deb and I will be working remotely the next few weeks, but have full access to our email, database and documents.

The health and safety of our community is paramount, and we have found valuable information and employment guidelines from the following resources.

FBA Webinars:
Back to Work Safely:

FBA: Back to Work Safely

Family Business Alliance Webinars

Starting Up Operations: The New Normal: https://attendee.gotowebinar.com/recording/4579369579547451398

Business Resiliency and Recession Response Strategy: https://attendee.gotowebinar.com/recording/174211427058099463

Supply Chain: https://attendee.gotowebinar.com/recording/8705986251219606280

Employment and Personnel: https://attendee.gotowebinar.com/recording/3212317084878595847

Liquidity and Capital: https://attendee.gotowebinar.com/recording/5510919809957168396

OSHA: Workplace Safety Guidelines
https://www.osha.gov/Publications/OSHA3990.pdf

Grand Rapids Business Journal – COVID-19 Updates
https://grbj.com/tag/covid-19/

The Employer’s Association: Virus Policy Guidelines
https://www.teagr.org/teaimis/downloads/StatementofCOVID3.2020.pdf

Rhoades McKee: Coronavirus Legal Resources

Varnum: Coronavirus Resource Center
https://www.varnumlaw.com/services-practices-coronavirus-task-force

Miller Johnson: Coronavirus / COVID-19 Preparedness and Response
https://millerjohnson.com/coronavirus-covid-19/

World Health Organization: Global Daily Updates
https://www.who.int/emergencies/diseases/novel-coronavirus-2019/situation-reports

Michigan Official Resource:
https://www.michigan.gov/coronavirus/

Spectrum Health: Local Health Resources
https://www.spectrumhealth.org/

Warner Norcross + Judd LLP
http://www.wnj.com/About-Us/COVID-19-Updates

COVID-19 Advice: DWH
https://dwhcorp.com/covid-19-advice/

Coronavirus Insights – Barnes & Thornburg LLP
https://www.btlaw.com/en/work/practices/covid-19-coronavirus-resources

COVID-19 Resources – ACG Western Michigan
https://www.acg.org/wmich/covid-19-resources

If anyone else has any helpful guidance, please send it our way for our newsletter. Please stay safe and reach out if we can help in any way.

Diana Schad
Director
Family Business Alliance

Three Paths to Growth: Which One Fits Your Company?

The following article was written by Wade Wyant of Red Wagon Advisors.

Every business owner wants to achieve growth. And every business owner should.

So it makes sense that, when you’re seeking growth, you should be able to answer a basic question: What is your primary path to growth?

Now of course, everyone’s answer to this question will include some basic fundamentals, such as focusing on great products and services, and focusing on taking care of customers.

But beyond those fundamentals, there are three primary paths to growth that apply to all industries. And I often find that corporate leaders aren’t entirely sure which of the three best suits their companies. As a result, they’re going full-bore in all three directions, and often wearing out their people in the process.

Here are the three:

Organic growth. This one is the most basic, of course, and it’s nothing new. The company growing organically is not trying to change the world with its products and services, but it’s finding small innovative moves that can differentiate them from their competition. That, combined with a world-class sales and marketing effort, keeps the orders coming in and the revenue expanding.
Execution plus acquisition. Have you perfected the execution of your product or service, well beyond the industry norm? Are your systems and processes far more efficient than those of your competitors? Great. Ride that excellence to happy customers and strong cash flow, then you can grow by acquiring your less-excellent competitors at a value price, and increase their value by instituting your system of excellence to replace their old, inferior ones. I made that sound much simpler than it is, but if you can achieve that level of excellence, this is definitely a great path to growth.
The Unicorn. All the world loves big ideas, and some of the most successful companies in history have been built on them. And it’s only natural, if you operate in the business world, to believe you’re capable of coming up with the next innovation that will change everything. The next unicorn. This is a strategy with high potential, but also high risk and very long odds. So if your entire growth strategy is based on coming up with a unicorn, you’d better find it.

And that speaks to a problem I see with many businesses. Their pursuit of growth is either misaligned with their real strengths and opportunities, or it’s scattered across all three without a real commitment to the one that makes the most sense.

What is your best path to growth? The answer to that question lies within the strengths and opportunities of your company, as well as your market positioning. It lies within the capabilities of your people and your processes.

Do you do the basic fundamentals extremely well, and sell your products and services with exceptional success? Then your primary path to growth might be organic.

Is your execution so strong that you’re running circles around your competition? Then maybe you should consider bringing them into your organization and consolidating your hold on the market.

This is not to say you shouldn’t try to excel at all aspects of your operation. Does it make sense to seek organic growth while also striving for excellence in execution? Of course it does. You want to do everything as well as you can. But you’re trying to grow right now, and the focus of your growth strategy should be on the path your company can pursue most successfully based on its structure and positioning today.

But what about the unicorn? What about the big idea that could change everything? Why shouldn’t you pursue that? Didn’t Steve Jobs? Didn’t Bill Gates?

Of course they did. And so have a lot of other people whose names you’ve never heard because they didn’t become Steve Jobs or Bill Gates. I love big ideas and I am the last person who’s ever going to tell you not to pursue one.

But here’s what you need to know: Big ideas usually take a long time to come to fruition. It never feels that way when they first come to you. You get inspired and you start imagining all the places your idea can take you.

You might even call your team together and share your vision, and they might get very inspired too. Once they’ve heard your idea, they’ll head back to work feeling inspired to make it all happen.

This can be trouble. That idea is probably a very long way from realization, if it ever happens. Your team is excited now, but in six months they’re going to wonder if this is ever really going anywhere. In a year they might be thinking you’re tilting at windmills. In three years, they’re no longer taking you seriously when you talk about big ideas.

Nothing’s happened. There’s been no growth. You keep telling them to just wait for the unicorn, but all they see is the same stagnant company every day.

And it didn’t have to be that way. You can have your big idea and you can chase after it. But in the meantime, your path to growth has to be based on where your company is strong and capable right now. Your team needs to be focused on that.

There’s nothing wrong with having select, strategic people helping you push toward an exciting innovation. But how are you going to make it happen if you’re not growing and earning revenue from your existing operations? That’s where you need your team focused, and they need to know that’s where the company is focused.

Which of the three paths to growth fits your company best? It shouldn’t be a hard question to answer for anyone who really knows their company and their people.

But in order to answer it, you first have to know enough to ask it. Now you do.

Wade Wyant
Grand Rapids, MI

How Servant Leadership Can Ensure the Long-Term Success of the Family-Owned Business

The following article was written by Scott Hill of Varnum LLP.

Through my work as a corporate attorney, I’ve had the opportunity to observe many beautiful businesses on a regular basis. And while there are shared strengths across successful companies such as weathering storms of surprise in regards to sales cycles, supply chain external forces, and shifts in talent, I am often most struck by the prevalence of the servant leadership model at the highest levels of these businesses.

Servant leadership, a philosophy in which the main goal of the leader is to serve, differs drastically from the traditional leadership model where the leader’s main focus is the thriving of their company or organization. Robert Greenleaf (who most attribute to coining the term “servant leader”) noted in 1977 that the authentic nature of a servant leader enables them to accept people as they are, fostering an environment of creativity and risk-taking without the fear of ridicule from (gasp) one’s parents or relatives. In my mind, this type of leadership style could be compared to the Elmer’s Glue from an elementary level art project – unrefined and messy at times – but, serves to hold things together and provide a platform for growth and success in the learning years to come.

My belief is that servant leadership is instrumental for business sustainability and that we see it more commonly in the family business construct due to the bonds that familial relationships bring prior to involvement in a business. In turn, these bonds help to build foundations of service to one another. So when family businesses find themselves at generational crossroads, I posit that despite Millennials’ mixed reputation, the servant leader model is of tremendous importance to imprint on this next generation and can act as a meaningful measuring stick for long-term business success.

Mike Novakoski, the featured speaker at the Family Business Alliance’s February meeting, knows quite a bit about leadership, how people interface well with one another, how to challenge people, and how to grow. Mike’s teachings (through public speaking and his and John Parker’s book Unmistakable) surrounding right-brain thinking augmenting left-brain leaders and how he shares the journey of his team at Elzinga & Volkers is worth paying attention to. Varnum is pleased to be the sponsor for this FBA event titled Leading the Business as we’re excited to sharpen our minds on the topics Mike will be discussing. I hope you will join us and learn from his teachings. You won’t be disappointed and I look forward to seeing you at the event.

Scott Hill
333 Bridge St NW #1700
Grand Rapids, MI 49501