Honoring Tradition In A Changing World - family businesses - Brief Article

Nation's Business, March, 1999 by Bernard Kliska, Craig E. Aronoff

Craig E. Aronoff, left, holds the Dinos Chair of Private Enterprise at Kennesaw State University in Kennesaw, Ga. Bernard Kliska is a licensed family therapist in Chicago and retired CEO of his family fourth-generation business. Both are family-business consultants. Copyright (c) by the Family Business Consulting Group, Inc.

In family businesses, tradition is something like truth: It's easy to uphold, until upholding it presents a risk.

For example, consider the Portobello family--a composite example based on several family businesses we know. When Grandfather Portobello started his neighborhood bakery, people began their days with an early morning walk to the bakery to buy fresh bread. He built his business on careful attention to quality.

Now fast-forward to a world of preservatives, dual-income families who leap out of bed to rush to work, and 24-hour supermarkets with on-premises bakeries. The Portobello family's business, now run by the founder's son, still turns out the best-quality product around. But business has been stagnant for years, and costs continue to rise.

"If we don't make the best, we shouldn't be in business," insists the aging second-generation baker. Indeed, he is simply restating for the thousandth time an unquestioned family tradition.

But now the family has gotten an offer that's difficult to refuse. A large commercial bakery wants to produce and distribute baked goods under the Portobello name. It's an opportunity to make more money in the next year than the family has made in the past 10 years put together, and that's just the beginning.

Grandsons with their own young families rattle off a long list of family food businesses that have sold their names to large companies and reaped huge financial benefits. But their father reminds them that those products are not nearly as good as they used to be.

"We've got to do something," say the grandsons. "We've got kids we need to send to college soon."

In times of crisis, it's important to remember some basic points about traditions:

* Traditions are evolutionary, stretching from the past through the present to the future. Traditions survive because they help the family to prosper.

* It makes sense to honor traditions and trust them.

* Traditions should be seen as guides, not leashes.

* Traditions can make profits and everything else in life more meaningful.

The Portobello family needs to increase its profitability and still revere its traditions. But how? By genuinely honoring the tradition. A tradition that survives only as the motto on a package is hardly worth the cellophane it's printed on.

The most valuable time to reaffirm a traditional is when it's threatened. The Portobello family's members should spend time together honoring their tradition. They should talk about their history, sharing stories from business and family life that illustrate the living importance and the value of their tradition to themselves and their children.

Here are other steps the Portobello family--or any business family in a similar position-can take:

Brainstorm ways to incorporate the tradition into any proposed change. For example, can the Portobellos insist that the new owners will maintain the quality? Can this be included as part of the financial negotiations?

Or, if the suitor company isn't willing to guarantee maintaining the quality that is the Portobello tradition, perhaps the family can solicit bids from other companies-now that the idea of selling the business has presented itself.

Accept the need for change. If the deal falls through because the family insists on honoring its tradition, there's still this positive outcome: Everyone has realized that things can't continue as they've been going. They have reaffirmed both the need for change and that any change must be in accord with the family tradition.

When a new direction is determined, make tradition a part of it. During the discussions about what to do, the Portobellos finally faced the facts of their declining business. But after drawing new determination and inspiration from their long tradition, the search for an honest new direction became energized.

Family members discussed the changing culture and demographics of the neighborhood. There were fewer old Italians and many more gentrifiers and college students. Although the members of the new population ran at a faster pace, they still needed a place that was reassuring, relaxing, and wholesome.

The Portobellos decided to open a bakery cafe. People didn't have time to get up, buy bread, and go back home for breakfast, but they had enough time to stop for coffee and fresh bread and rolls in a warm, friendly place.

The Portobellos also rearranged their hours and baking schedules so that in the evening, on their way home from work, people could stop by for fresh bread.

In the past decade, midday business had just about disappeared, but as word spread about the quality, genuineness, and friendliness of the cafe, people began coming for lunch. A few years later, the Portobellos expanded by taking over the store next door.