Working With Family

Success may be found in a company’s DNA, but some clear ground rules help.

Did you check out the front cover of this month’s edition? Sixteen—count ’em, 16—members of the Cosentino family, including Jerry, the surviving co-founder of Cosentino’s 

Anyone working with a large number of relatives can tell you all about the logistical challenges of getting 85 percent of a group that big to gather at one time and place. But the chain of 27 area stores is far removed from its roots as a single grocery on Blue Ridge Boulevard. In many ways, it has evolved into a logistics company, and to survive in this region’s competitive grocery market, it has to be darn good in that role.

Our experience with the Cosentino clan was repeated, with varying degrees of challenge, at seven other family-owned businesses for this cover feature. In speaking with the ownership and leadership of each, we learned quite a bit about what it takes to succeed in a family-owned setting.

For starters, scrap the notion that “family-owned” business is a label that can be broadly applied. Company size, business sector, employee count, numbers of relatives, division of ownership, assignment of roles—when you start to throw in the variables, it’s easy to see why (borrowing from Leo Tolstoy here) no two family businesses are successful in exactly the same way.

Some have found that control concentrated in the hands of a single executive is the best way to chart a course for growth; some thrive with equal ownership. Some are still working on their succession plans; others have set theirs in place for a decade or more.

The common thread that runs through each: They embraced innovation, they timed their moves and they rolled the dice, knowing that the likely outcome depended not so much on fate alone, but on the additional advantage that comes from working with other family members who are “all-in”, regardless of the share of control they hold in the company. For even if they aren’t the field generals, the soldiers in those family ranks bring to the job a commitment you rarely find in an applicant off the street.

Perhaps the most impressive bloodline in this feature belongs to the Ismert-Hodes family at Sioux Chief, the Cass County plumbing parts maker and supplier. Fully 25 members of the family—sons, daughters, in-laws, cousins, spouses and more—are working there now, helping swell the employee ranks from a handful 40 years ago to nearly 500 total today. And the smallest unit is the trio comprising brothers and fourth-generation butchers Joe and Jim Bichelmeyer and Joe’s son Matt, who own Bichelmeyer Meats in Kansas City, Kan.

All of these eight companies go back at least three generations, and in some cases, as many as five—a demonstration of the stability that family ownership, family pride and family dedication bring to an organization. Their individual company stories are impressive, especially considering that 30 percent of family businesses survive as second generation and only one in eight survive to become third generation.

One other common thread running through these families—the number of instances where the next generation had a path charted for it. Some of the current leaders chose to follow that path from their school years forward, and some ventured out to learn about the world of business before bringing those skills back to the family concern in Kansas City.

Bottom line, though: The greatest chance for success and driving a company forward comes from clearly defined roles and responsibilities that everyone buys into from the start, rather than tries to grow into.

Perhaps the percentage of family-owned businesses in our region is not as high as it once was. I believe, however, there are numerous distinct advantages when a family business becomes a multi-generational one. For these and many other such businesses, working for the family’s company is not only common, but expected. And, nearly every one of the children start with the company on arguably the lowest rung of the ladder.

I’ve heard it suggested from some multi-generational family business leaders that while a husband-and-wife team at the office certainly entails family relationships, it isn’t exactly a family business until at least a second generation is involved. At the risk of offending the other half here at Ingram’s, there might be something to that—it’s certainly a different dynamic.