Inside the Mind of a 23 Year Old Indian NextGen

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Kanishka Arumugam

Kanishka Arumugam is the perfect example of the kind of NextGen this blog is all about. Young entrepreneurial people with a can do aptitude; an authentic leader that knows what he wants from life and goes for it. In this interview, this young NextGen surprised me with his maturity and wisdom. Kanishka Arumugam shares his family story and hopes for the future. Please, enjoy it!

1. Kanishka Arumugam tell me about you and your family business, Deccan Pumps Group, in India

I am from Coimbatore, an industrial and entrepreneurial city in south India, dubbed as pump city of Asia, known for its world class Pump Manufacturers, Textile Industries, International Educational Institutions, and also an emerging IT hub.

I am fortunate to be a second generation member of the Deccan Pumps Group. I grew up around the business and decided to be an entrepreneur from a very young age and this passion drove me to learn from organizations around the globe. Thanks to my prestigious alma maters of Sheffield, Leeds and Stanford Universities, that groomed me in many ways.

My father P. Arumugam and his uncle K.K. Veluchamy founded Deccan Pumps 32 years ago with a mission to make the life of farmers better by manufacturing superior reliability pumps. Today Deccan is a closely held conservative group with an annual turnover of around Rs 100 core focused on pumps also with its presence on Fluid Handling Distribution, Real Estate and Education. The brand is one among the Top 5 manufacturers of submersible pumps in the country and it remains Asia’s largest producer of vertical open well submersible pumps.

My father is a keen philanthropist. He runs a home for elders, has a desire to turn his ancestry farm into a model agricultural unit, and spends time in upgrading the basic infrastructure of his home village.

He believes not in chasing numbers but in giving back to society in as many ways as possible. Recently, he undertook a not-for-profit initiative and incepted the Info Institute of Engineering, along with his friends, mainly for the first generation learners of the country.

One can have simple living and be content but when it comes to business I believe one should never think twice about making it bigger. And this is what my dad and I often argue about. However such arguments help me evolve and I get to know the perceptions of the previous generation and absorb whatever is suitable in the current scenario.

Last year, after my graduation, I spent time with a few European family owned manufacturers and also had a short stint at Xylem, a non-family owned American company, the world’s largest producer of pumps and systems. Its major competitor was a Danish family owned company.

I was awestruck to learn how a family tradition could bloom into an industry that gives its competitors a tough time.

2. What’s your thoughts on building a Socially Responsible Company?

As mentioned earlier, a few years ago I often wondered why my father started a not- for- profit engineering college, a home for the elderly, rural development programs and similar activities instead of just growing the business. But now I realize that companies which are long lasting have a broader outlook and contribute to society in crucial fields such as education, healthcare, women empowerment and for a lot of other important social causes. The Forbes, Godrej, TATAs, Thermax and Wadias, are all living examples of this in India.

Last month when I was in Germany I visited my friend’s family owned company VIEGA, a fifth generation company which is into pipes and systems. It was interesting to learn how the family and business have involved the small town of Anttendorn in a larger way and how the feeling of goodness has been spread across from the taxi drivers of the company. Also the spirit of entrepreneurship and drive for growth is clearly seen in the fifth generation more than in the previous generations.

It is very essential for all the next generation family members to involve the society and community at large, in which they operate, and also to help the underprivileged and make the world a better place. A company’s purpose is just not to acquire wealth and markets but also to contribute to the society in which they live. This is an important value in creating long lasting organizations.

What do you think about Value system in a family operated company?

Care for the members (employees), humility, simple living with high thinking, involving the society, respect and care for the underprivileged, professional management with family members on board and taking part in participative management are important to the company.

The role of family business leadership can no longer be authoritative; only an all inclusive leadership model with the best value system works in today’s business organization. To put it in a nutshell, the secret behind a successful business is long term thinking, highly ethical practices strong values of family spirit, integrity, value delivery to customers and developing an entrepreneurship attitude in every employee. Keeping the company financially stable and risk-proof, safeguarding and adding value to the business: these must be the goal of a Next Gen member who wishes to grow his company in leaps and bounds.

Kanishka brief me about your opinion on Ownership, Management and Family.

Ownership, Management and Family should be viewed differently among the next generation members.

Your father might have been a great product designer who helped the company grow, but that doesn’t mean the next generation could follow or repeat the same. There is no point in just holding positions, adding value to the business is more important.  Perform else take a back seat.

Family involvement in a company definitely helps it grow at a much faster pace since the outputs are going to benefit their whole generation. More than money, emotions and attachments drive individuals towards better growth.

I believe family owned companies and the next generation should clearly differentiate between ownership, management and families. When these collide it gets complicated outside of the office too. It is simple when said, but I’m sure it is difficult to practice. My father and I might have a disagreement inside the office room, but that should not hinder the father-son relationship. My style of working is different from my dad’s. It doesn’t mean one is right and the other is wrong; we have to find our own strengths and contribute.

Is there any family structure in Deccan Pumps Group? Your group recently announced a Spin off.

Its sad we had to do this, we tried our best but was too late. Also the chief emotional officer my grandfather was no longer there . There was no issues for money or business.

In India sometimes families grow faster than businesses and so we are forced to draw agreements for securing the future of the business and the brand value of what our previous generations have created. We, at the Deccan Pumps Group, are currently working on ownership and brand sharing methods with the next generation members. The ultimate goal is to secure the business, brand value and at the same time allow every member of the family to pursue their interests.

Every next generation family member should be on a stewardship / trustee role. I find myself not as a maverick, but as a star in my own way. Gen-next entrepreneurs are fortunate to be born in privileged families and should be thankful for their education and resources that not many are fortunate to have in a country like India. So we should add value to what the previous generations have created, protect it and pass it on to the next generation.

Brilliant. What’s your future Goals?

I’m just 23 years old and have a long way to go and I am sure my thought process and learning will evolve as I observe, learn and grow. I strongly believe that every next generation member should spend time in at least two companies briefly before joining their family business. It gives one a great learning curve of how business families work across the globe, which elevates the thought processes and enhances entrepreneurial skills.

I’m looking forward to creating a great family owned company with strong values and best practices that I have seen and learnt in the last few years across the globe and act as a trustee to the future generations. One thing I have learnt from the west is that family companies are held by Foundations and work on the model of investing all profits back into the company where the family is allowed only a small percentage of profit. I shall try working out a similar model.

The next ten years is very crucial for the country. I’m sure there can be a lot of globally competitive family owned companies from India across all sectors, if family companies practice the best processes and systems. I hope to put myself to work and add value to what my father has created. I’m sure every next gen member is talented, unique and can contribute in their own way – be it CSR, Marketing or Research.

The internships I went through, systems I worked in, diverse cultures I experienced and talented individuals I met, have left an indelible mark in my life.

I’m currently working on a project setting up a state-of-the-art new plant with the experiences and processes I have seen across the globe. Though not a mega plant, I aim to make it a very efficient one. I found the brand Deccan Pumps strong only in certain segments. So my new Brand extension line would help create a new perception among customers and drive towards growth.

The products are being designed and upgraded to world-class standards with a great emphasis on manufacturing systems and process technology. The new plant is a small test that I’m putting myself to. It will also increase our productivity in one product line up to five times.

My Professors in Stanford and Sheffield have always been good mentors and when I shared this idea they felt that this startup would help me learn quickly all aspects of business and if I perform well I will be ready for a bigger role.

Perform and Preserve, else Perish. Also, if one fails to safeguard the business and grow, it’s a crime. With a strong support of the previous generations and the wide global exposure that we have access to, it’s time we next gens create history!

Kanishka Arumugam

Deccan Pumps Private Limited

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What Dr. Kirby Rosplock Has to Say About Family Business, Women and Wealth

I met Dr. Kirby Rosplock at the Transitions West Conference in San Francisco a couple of years ago, when she joined me and another colleague in a very interesting conversation about family companies. She was humble, open, easy going and the way she talked about family business, and especially about women in family business, showed her passion and commitment to making a difference for them.

This is no surprise when you learn that Dr. Rosplock is also a 4th generation member and owner of a 130+ year old family business (www.BabcockLumber.com), a board member at the company and a co-trustee on her family’s foundation.

Her experiences in her own traditionally male-oriented family company filled her with an immense curiosity about how other people, especially women, experience their involvement in the family business world. This led Dr. Rosplock to write her dissertation paper: “Women’s Interest, Attitudes and Involvement with their Wealth” and she subsequently dedicated part of her successful career as a writer, researcher and lecturer to women’s empowerment around wealth.

In the following interview, Dr. Rosplock shares with us what is behind her passion for helping women, what interesting findings she has discovered in her research and details of her new project, which involves writing a handbook on the family office for Wiley & Sons.

How Strong Family Values Can Keep your Family Company Successful Over Generations

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It is a windy Friday afternoon at the lovely Marina del Rey. I’m meeting Gilbert Devlyn to learn about the keys behind the success of his family business, Devlyn Optical, which is now in the 3rd generation.

The Devlyn family is from Mexico, and they are the owners of  a 77-year-old company that first started as the only optical service in the town of Ciudad Juarez in Mexico. When it first opened, it had just two employees: Mr. Frank Devlyn and his wife Nelva Mortensen. Today, it has more than four thousand employees, 829 branches in Mexico, which makes it the largest optical chain in the country, and the brand has even expanded to Guatemala, El Salvador, the Dominican Republic and the USA. The company has also expanded its services into ophthalmology clinics.

What I find really interesting about this company is that, unlike most third-generation companies, which tend to keep the family out of management and focused on ownership, the Devlyns have managed to retain 11 family members working in the company and they are the 3rd generation in charge of operations.

There is definitely no sense of entitlement here, as Gilbert explains. When he was a little boy he asked his father to buy him a toy car. His father offered him the opportunity to work in the family company and earn the money he needed to buy the toy for himself instead. Gilbert was very disappointed when, after a week, he got paid just 140 pesos (the standard salary for the work he did at the time). He learned a lesson about how hard it is to earn enough money to buy what you want and that his family was not just going to hand him everything on a plate.

Gilbert is down to earth, kind, polite and oozes love and admiration for his family. He is also well educated, intelligent, ambitious and driven. After working for a few years outside the family company and completed an International MBA, he has recently joined Devlyn Optical. His desire to contribute, make a difference and find his place in the organization for himself is evident. With people like him in the family, there is definitely no need to look for talent elsewhere.

This is what Gilbert has to say about values, emotions, family business and making a difference.

Written by Carmen Lence, Executive Coach at NextGen Consulting & Coaching LLC. Contact Carmen  at carmen@nextgenfamilybusiness.com

About Transitions West Conference and Changed Lives

I just got back from the Transitions West conference at Marina del Rey, which was organized by The Family Business Magazine and Stetson University’s Family Enterprise center. This is a conference “created for family companies by family companies!” and, once again, we enjoyed some great, honest presentations by some outstanding family business members, non-family executives and family business experts.

Among my favorites were the opening keynote by Jim Ethier, Chairman of the Board of the Bush Brothers & Company, during which he described the experiences his family company had as they built their family governance. Also, the panel of non-family executives made up of James B. Wood, Senior Vice President and Chief Strategy Officer of The Clemens Family Corporation, Robert J. Underbrink, President/CEO of King Ranch, Inc., David Yale, President, Just Born, Inc. and Ross Born, Co-CEO of Just Born, Inc., where I realized how difficult it is to find the right non-family CEO and the time and effort involved in the process; and the panel about how family councils foster engagement among family members, where Ashley Levi, Board Member at H.G. Hill Company, and Meghan Juday, Family Council Chair and Director at IDEAL INDUSTRIES, shared their experiences about how useful their families council has been for them. And finally the presentation from Mark Peters, CEO of Butterball Farms Inc., who underlined the risks involved in not having succession planning in place. Thanks to all for sharing their experiences and being so inspiring!

This was my second year at the conference and I was happy to see that many families came back and brought along quite a few more family members. I would say that the number of participants doubled from last year. Congratulations to the organizers!

I also meet Peter Begalla, Adjunct Professor and Program Manager at Stetson University’s Family Enterprise program, who I interviewed last year about the unique Family Enterprise program that Stetson University offers (Read interview here http://wp.me/p1tGmG-2n) and Professor Greg McCann, founder and Director of Stetson University’s Family Enterprise Center. I was interested in gaining the perspective of one of its students and when I meet Emily Dudley, senior at the Stetson University’s Family Enterprise program and second-generation partial owner of Dudley’s Auction Inc., at the Transitions West conference, I couldn’t miss the opportunity to interview her.

Please check what Emily has to say about how Stetson University’s Family Enterprise program has “changed her life.”

Written by Carmen Lence, Executive Coach at NextGen Consulting & Coaching LLC. Contact Carmen  at carmen@nextgenfamilybusiness.com

How to Avoid “From Shirtsleeves to Shirtsleeves in Three Generations.” James E. Hughes Jr. Provides the Answer at the FFI Northern California Event

James E. Hughes Jr.


The FFI NCAL Chapter Formation Team recently hosted the second event of a series that is aimed at raising awareness of the San Francisco Bay Area Chapter for the Family Firm Institute. Thanks to the efforts of Susan Ott and Henry Kaiser, who did a fantastic job of organizing the event, we all enjoyed a great learning and networking experience.

This time we had the opportunity to learn from Mr. James E. Hughes, who has more than forty years of experience working with family businesses. Mr. Hughes is also the author of the well-known family business books: “Family Wealth—Keeping it in the Family” and “Family: The Compact Among Generations.”

Mr. Hughes’ views on the issues related to passing wealth to the next generation and the impact that this can have on their lives did take me by surprise. Usually, the next generation are often perceived as being responsible for taking over a well-run family business and running it into the ground; they are also frequently considered to be entitled, dependant and spoilt. Mr. Hughes’ presentation focused more on the root of the problem and looked, in an entirely different light, at some of the issues that impact next generation family members.

During the presentation, all participants were asked to draw a very simple galaxy where one planet represented the “Donor” and was divided into two main areas: the “Land of Mindful Donor” and the “Land of Thoughtless Transfer.”  From this planet a meteor was ejected towards the “Planet Recipient.”  The question that he encouraged us all to ask as we drew the diagram was: “What is in your meteor?”

Mr. Hughes described how Planet Recipient is happily going about its business until the meteor is launched from Planet Donor, travels into its atmosphere and pretty much changes everything in a blink of an eye. If the meteor comes from the Land of Thoughtless Transfer, which in his opinion happens most of the time as the result of the donor feeling guilty about something and following his or her own agenda, the recipient runs the risk of becoming dependent and entitled.

What can the recipient do when the meteor suddenly lands on his/her planet? They have to adapt as quickly as possible, integrating this new alien body into their lives. Mr. Hughes presented the following simple formula:

Adaptation + Resilience = Integration

Adaptation – Resilience = Disintegration

The main element that the recipient needs to survive and thrive once the meteor hits his/her planet, is resilience and the quality of the recipient’s resilience is all that matters. The recipient has already built this resilience by educating himself/herself on who they really are, knowing what they want in life, developing a purpose for themselves and being their own person.

Mr. Hughes argues that the meteor should always comes from the Land of Mindful Donor, in that it should be launched by a donor who carefully thinks about the impact that the transfer is going to have on the recipient’s life. A Mindful Donor is a donor that considers how to enhance the life of the recipient, thinks about his or her intention and invests time developing the recipient as a human being. According to Mr. Hughes, it is crucial that donors make every effort to help the recipient to learn about his/her learning style, vocation and personality, and truly discover the deepest root of who he/she really is. This will ensure that the recipients are prepared for a fulfilled life, with or without the meteor and its content.

What about you? Do you think that this is the best way to end the “from shirtsleeves to shirtsleeves in three generations” cycle?

Written by Carmen Lence, Coach and consultant at www.nextgenfamilybusiness.com

Is Women Power Enough to Break the Glass Ceiling?

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I just got off the phone with my friend Michio, back in Japan. She was so fustrated about her job situation that she really needed a friendly ear to vent to. After five years working for the same company she just had enough of waiting for an “opportunity” and she decided to look for it elsewhere. “I’m one of the few women in my office that is not working as an ‘office lady,’ and still they are reluctant to promote me; they believe that sooner or later I’ll leave my job to get married and have kids,” she said. Michio’s profile, a single woman in her early thirties with a university degree, several years’ work experience and frustrated with the difficulties in getting ahead in her career, is not unique to Japanese society, but especially common in Japan, where less than one percent of corporate directors are women.

Family businesses are not an exception.

Apart from interesting cases like the “ryokans” (Japanese traditional inn) in Japan, where women rule generation after generation, most women in family businesses get leadership positions when there are no men in the family to go around. Still, succeeding dad in the family business is one of the fastest ways for a woman to break into top management.

Women power does make a difference


Global leaders like IBM and P&G are promoting their “gender diversity” programs as they have figured out that having more women in management will help them to better understand the needs of a big percentage of their customers, women.

Also, a study conducted by Catalyst, a research company specializing in gender issues, shows that the leading companies in their sample had women accounting for 20 percent of their top managers, while the bottom companies had less than 2 percent.

If this is not enough proof of women managers positive impact on company performance, look at the UK’s Cranfield School of Management study, which found that 69 firms in the FTSE 100 with at least one women director scored an average return of equity of 13.8 percent compared with 9.9 percent of the other 39 companies with no women directors at all.

Why are there still so few women in top management?


Many go the easy way and blame women themselves, arguing that they are not as ambitious and committed as men to making the hard climb to top management and that they are too eager to leave their careers when they get married or have children. As a woman, I find this argument quite cynical.

I’ve meet many expatriate’s wives throughout the years living in different countries. Most of them have great education and work experience but left their careers and well paid jobs when their husbands were offered job opportunities abroad. Why? Simply because they could not compete with their husbands higher salaries and better career prospects.

This is also a choice that many women are compelled to take when they have children. If the couple doesn’t make money enough to pay baby care, the woman’s job is the first to go, as she  normally earns less than her husband. Statistics show that women in general have fewer offers to managerial positions and generally lower salaries for the same positions.

Society is not so supportive to career women.

Women are blamed for the low birth rate in the industrialized world, picturing working women that remain childless as selfish and self-centred. Needless to say, working mothers don’t get much better press either, making many mothers feel guilty about wanting to have a career.

Interestingly enough, statistics show that the countries that have the lowest levels of fertility are those with relatively low levels of female labour force participation while the countries with higher fertility levels tend to have relatively high female labour force participation rates.  So, it seems that supporting women to have careers actually makes them more willing to be mothers as they feel more confidence in being able to provide a better life for their families.

In my opinion, companies and governments have to make an effort to help women combine family and career. Women will have no incentive to return to work after maternity leave if they are not offered the possibility to rise to management-level positions and the flexibility that a working mother requires. Who wants to go back to a dead-end job that costs you money because you have to pay someone to look after your child?

Women power is not enough to break the glass ceiling; companies should offer true equality of opportunity– equal pay to men and women for the same positions, and flexible hours and child care facilities for working parents. Governments should help with tax incentives and positive discrimination establishing minimum quotas of women in management. Basically, women power needs people power to really make a difference.

Written by Carmen Lence, Executive Coach specialized in working with Family business and women entrepreneur.

For more information about Carmen Lence click on www.nextgenfamilybusiness.com

Dennis Jaffe on How to “Make it Happen” for the Next Generation Owners of Family Business

For 40 years, Dennis has helped families manage the personal and organizational issues that lead to successful and fulfilling transfer of businesses, wealth, values, commitments and legacies between generations. He is professor of Organizational Systems and Psychology at Saybrook University in San Francisco. Dennis received his BA in Philosophy, MA in Management and Ph.D. in Sociology from Yale University.

As both an organizational consultant and clinical psychologist, he is one of the architects of the emerging field of family enterprise consulting. As a founding member of the Family Firm Institute, he has presented at many of their annual conferences, served on their board, written frequently for their journal Family Business Review, and was awarded the Richard Beckhard Award for contributions to practice.

In this interview, Dennis Jaffe share his experience in helping next generation members of family business to create a future for themselves and the keys to succeed at succession.

How Educational And Networking Events Can Improve Your Family Business.

Click on the picture above to learn the highlights of last Friday’s presentation by Peter M. Johnson on family business governance at the Institute for Family Business at University of the Pacific in Stockton, California.

Peter M. Johnson, Director of the Institute for Family Business at University of the Pacific in Stockton,  shares in this interview the value for Family Business to join networking and educational programs, like the ones offered by the Institution he leads, to learn what to do when you don’t know what to do in your family business. Ready to learn and mingle?

How does the Institute for Family Business support family businesses?

With all of our family business, wherever they are we support them through several different ways. First, we offer about five (and as many as ten a year) different programs in different locations. These programs are offered to family members and non-family members who are key employees. With the idea that attending this program with key non-family members or their consultant, everybody is on the same page. They hear the same message and it is easier to start creating a strategy around what a group heard in a program. They will get information for an expert in the field who will speak about challenges as a current or former family business owner, consultant, or a panel.

The other benefit of the program is that it allows family to talk to each other.  One of the biggest challenges that I have seen over the years is that families always think they are alone. They think that they have unique challenges and that they are a messed up family and other family businesses are much more professional than they are. So, it is an opportunity for families to get to know each other and learn from each other.

We also have a very large resource library of videos from previous programs, books, articles, consultant information, and a wide variety of family business resources that we can refer our members to.  For example if someone inquiries about non-family employee conversations, succession planning or would like a consultant, we have resources that we can refer them to.  We will also connect them with other members who for example may be thinking of starting an independent board of directors. They have not done it before, are not sure what the structure would look like, and want to know what the pros and cons are. They will want to know if there is another family who they can speak with that has been through this journey and can provide their experiences.

Is the Institute for Family Business at the University of the Pacific the only one of its kind in the Bay Area?

Yes.

Why do you think that there are not more institutions supporting family business in the Bay Area?

That is a great question and I think that there are a couple of reasons for it. First, with some families they don’t realize that they are a family business. Some think of a family business as a mom and pop out of their home or small grocery store on the corner. They don’t really think of big family business like Levi-Strauss, Ford, or Wal-Mart. So a lot of families don’t think of themselves as a family business.

The second problem is that many families don’t want to admit that they need help. Generally, the family has a patriarch in charge and they tend to think they don’t need help and there are no issues. They are blinder to some of the problems and will gloss over the issues.

The third problem is that you have to know where to find family businesses. We know that 80% – 90% of businesses in the United States are family owned or controlled.  But getting people to recognize that they are a family business and promoting the concept to them is difficult. One thing that I hear people say when they come to our programs is that they didn’t realize that this was available. It is kind of tough because until a family is in crisis, like a succession issue, family members tend to gloss over the resources that might be available to them.

Do you think this type of organization is important for next generation family members of family businesses?

Yes and actually what we see is that Next Generation is more likely to call. They recognize that their family is having issues and the senior generation is blind to the challenges and want to know what they can do. The Next Generation largely sees the value in these programs and is more likely to speak up and say that they are a family business. They recognize that the family is a part of the business and that they are having challenges that go beyond the traditional business challenges.  It is critical, especially if the goal is for the Next Generation to take over, for them to develop their leadership skills.

Do you offer leadership development programs for the next generation?

We do. As a matter of fact our programs are not just for one generation, type of business, or industry.  We offer informational programs that go into different topics that can be related to any business.  So the next generation and senior generation both get something out of the programs.

What is your typical member profile?

There is a wide range. For example, we may have a winery that has 4 or 5 family members and 10 full-time employees.  We also have some that have 80 or 100 full-time employees. Almost all of our members are multi-generational and occasionally we will get some from the same generation. They tend to be two –generation with the parents in the business.

Educational and Networking events are a great opportunity not only to learn from the presenter but also from  other participants. What is your experience with this kind of events?

 

Written by Carmen Lence of NextGen Consulting and Coaching LLC. www.nextgenfamilybusiness.com

Family Business and Tough Love, Something to Be Grateful For

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I’m the middle kid in my family. I have an older sister who is much prettier than I and a younger brother, who was a dream come true for my father, who always wanted to have a boy to carry on the family name, so it’s no wonder that I’ve always been the rebel, the troublemaker in the family. I suppose that I just wanted attention, but I also had a strong desire to live my life my way.

Growing up with a strong-minded entrepreneur who had a very clear idea in his mind about what was best not only for the company but for every single member of his family was not easy for me. I imagine that dealing with a strong-minded child was not easy for him, either.

My father’s biggest loves in his life are his kids and his business, so he has always tried to keep us together. We started working in the family business as children helping out on the weekends. Later, as teenagers, we rotated through different positions giving holidays to employees and working part-time during college managing one of the service areas of the company.

I loved it. I hated it. I loved the learning, the responsibility, and feeling useful and proud of my family. I hated the lack of freedom, feeling that I did not have a say in what I wanted, and how demanding and difficult to please may father could be.

When we had arguments, my father would end the discussion with, “You don’t understand how much a parent loves a child until you have one.” I think I understand now that I’m also a parent.

My father asked us to take on jobs such as waiting tables, pumping gasoline, and cleaning cars. His expectation that we would work as hard in the business as he did was his way of loving us and teaching us the value of money, appreciation for what we had, humility, and respect for other people regardless of their background. Our successful company was not a present; it was the result of hard work and dedication.

My father did not make things easy for me. I had to fight hard for want I wanted. This was also his way of loving me. He just wanted to protect me, but his strong desire to control my life was my biggest motivation to be brave, follow my instincts, and not settle for less than what I wanted.

Today is Thanksgiving, and I have many things to be grateful for: my family, my husband, my kids, my friends, my wonderful life… But what I have to be the most grateful for is growing up in a family business with a strong father who cared deeply about me. Thanks to him and to all the good and bad moments we have gone through, I am who I am and I have the life I have today. I couldn’t be more grateful for that!

Thanks, Dad, for being the wonderful father you are. I love you.

Happy thanksgiving to everybody!

Written by Carmen Lence, Family Business Consultant and coach

www.nextgenfamilybusiness.com

When is a Good Time to Pass The Baton… to Your Brother? Burnout Time!

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Kirk McMillan is now CEO/Owner @ VIS3

 

Second-generation Kirk McMillan successfully grew his family’s U.S. company, Twelve Baskets, from $4 million to $50 million annual revenue. Then his brother was invited by his father to join in and decision-making became “complicated.” Learn from someone who has come out through the tunnel of frustration, lack of support, and ultimately burnout and who learned how to survive and thrive.

-You assumed the leadership of your family business right after finishing university. What were the circumstances around it?

I was a senior in college and I was about to start interviewing. I was home for the holidays. After dinner, I was at the dinner table and my parents asked me, “Would you be interested in coming to work for the family? We need help.” And I thought about it, I was like, ok. I’d been working in the business, I had done all the little things you do growing up in a family business. Then I came in and there wasn’t a formal process to say: Here’s how the business runs…I just had to jump in and figure it out as I went along.

– When did you become CEO of the company?

Within four years. I started out without a title. Then I was there for four years and my dad and mom made me the president of the organization but I was already acting in that role without having the title. Because I was already doing the strategies, already putting things in place that needed to be done to change the company.

-How did it feel not to have a job description when you joined in?

I didn’t have an official one so… the people looked at me from a leadership perspective. But my dad looked at me as a son, he didn’t look at me as someone like a partner. I don’t really even know if he looked at me as an employee either, he just looked at me as a son. And so when we would have meetings with employees, suppliers, and customers that dynamic was not working because he was treating me like a son in all of these meetings. So I told him, “Dad you can’t continue to treat me as a son, if this is going to work, you have to start looking at me as part of the organization, as an owner, as a leader of it.” But that didn’t change; he kept doing it so I had to find a way to change it up. So I stopped calling him Dad. In those meetings I started calling him by his first name. And that was a shock for him. But eventually he did change—it took him a little while but he did. The funny part was that it immediately made a difference with the employees, the customers, and the suppliers. They looked at me differently. I call it system shock—I had to shock the system to make it change.

– What were the main challenges in taking over the presidency so young?

I was 26 at the time. The challenges were more strategic challenges because where I was taking the business was strategically different than where my dad was comfortable. So the challenge was trying to marry the risk that is involved with the strategies and getting the family on board with that. So that was difficult whereas my dad and mom didn’t take much risk before. But we had to take more risks to survive, to grow the business. We couldn’t do all the things that I wanted to do because there had to be some synergy between the family and the business.

-And then you grew your family business from $4 million a year to $50 million. What in your opinion has been the key to your success?

Well first, the system shock.  Continuing to challenge the business and the employees to do something differently than what they are used to. That was the biggest key, keeping people on edge to grow the business.

Having the buy-in from people collectively as a group was another big key, getting everybody together to move forward. And finally, looking further out time wise. We would look five years out or ten years out and not try to get caught up in what’s happening today to where you’re just reacting to the world that’s happening around you. That was a big culture shift for our business because my dad is a very reactive person. He’s happy when he goes home and he’s put out ten fires during the day.

Another challenge was keeping people motivated and energized, getting them where they are happy coming in to work wanting to do the things that were important.

-How did you feel when your father offered your younger brother a position with the company without asking for your input first?

At first I was angry, it was sort of taken as disrespectful, a lack of recognition for not only the position and work I was doing, but lack of recognition and respect for our relationship. That was my initial reaction to that. But then I asked myself, “Is this a family business?” and I really had to sit back and say, “All right, this is a family business and this may be best for us.” It doesn’t matter so much how I feel about it, I can make the most of this situation and make it as positive as possible.

-In 2007 your company got a very good offer from a competitor to get bought out and your family didn’t accept the offer. That was the first time that you didn’t feel you were in a family business—why?

It’s a big step for the family to say yes, we want to entertain an offer from another company, so you are basically saying that we are willing to give up what we built. And then as we got further into the negotiations, my brother, I, my parents, everybody had individual motivations to sell and they weren’t collective. It wasn’t where everyone was getting together and saying all right, what’s best for the family. That’s when I realized, Is this really a family business? And if it doesn’t feel like a family business maybe I really need to look at doing something else. And I was already feeling this way personally from other aspects because I was losing energy. I was burned out. I had been president of the organization for thirteen years but really running the business for fifteen years. I couldn’t convince my family to get a board of directors so I didn’t have a support network. I didn’t have any support systems where I could get honest feedback.

When I was running the business early on and up until when my brother got there, ultimately I was making decisions as president of the organization and I didn’t really seek my dad’s buy-in on those decisions. I just did what I thought was best and if my dad didn’t like them we would just end up fighting about it some but for the most part he ended up coming along on those decisions. When my brother came in things shifted and it became more of a democracy where decisions weren’t getting made. So I was really getting burned out. My dad and brother would be in alignment and I would be the outsider trying to do things. The business wasn’t moving forward, I wasn’t able to convince them to do things that I thought needed to be done. So now this offer comes in, we agreed to talk to this company and then all the personal motivations started to come out—what people are looking for. I said this just doesn’t seem like a family business. The motivations don’t really seem like we’re looking out for the family long term.

– After 15 years leading the company you decide to pass the baton to your younger brother. How did it feel?

It was a five-year process. It was two years of this very emotional cycle. The self-evaluation of what did I like about the business? What did I dislike? What did I get out of it personally? What were the challenges? What were my successes? What were my failures? Why would I want to stay? Why would I want to go? In that two-year process I just kept evaluating and at the end I realized that it was best for me to leave. For personal growth, for personal reasons that I needed to do something else. So at the end of the two years is when I told my parents; I didn’t talk to them before that period of time. Once I made the decision there was peace. I was happy with it. From that point on whatever I needed to do to help the transition I was willing to do. So my brother and I took on a co-president role for a year but ultimately he was making a lot of the decisions. I took on the CFO role during his first year as president and a year later, I stepped away from the business, realizing that my brother needed me to be away for him to be able to grow. He needed that autonomy to not have anybody to blame and only he himself to enjoy the successes. My brother had been in my shadow for all of his life.  I realized that I needed to step away completely so I did and now he’s got the chance to experience that on his own, which I think has been really good for him.

-If you had the chance to do it all over again what would you do differently?

I would have insisted on a board of directors. Looking back I would have found other ways to at least have found an advisory board because I think ultimately that’s where I lost my motivation. I think that would have made a world of difference, probably to the point where I might have had the motivation to stay around. And I would have had the different perspectives and views to where maybe the company could have gone in a different direction and maybe become even better. Also, I would have forced my family to do more communication collectively as a family. Unfortunately the conversations that I typically had with my dad or my mom ended up being business-related. So we didn’t have that connection on a personal perspective. I would have tried to find some creative ways to where the family could have done some things as family. Probably use some outside facilitators to do that. Other than that I don’t look back and have regrets. I had failures over time but I wouldn’t trade those because I learned a lot from those failures.

-Do you have a word of advice for Next Generation members who find themselves going through a similar situation?

You’ve got to find ways to stay energized. And for everybody that’s different. For me what I realized is that I needed a support system that was going to challenge me intellectually, professionally and personally. I didn’t have that so I would say for anybody that’s thinking of running their family’s business or that’s in their family’s business and they’re just feeling overwhelmed in the process is to find that support network. Whether it’s a group of peers, friends, or an advisory board, I think you need an outlet to let things go. You need an outlet to bounce ideas off. An outlet where you can get some validation and support that gives you that strength, that energy to make the hard decisions. For me the hardest part was for a lot of time I made a lot of decisions where I felt like I was on an island by myself. So you really don’t have a basis to say am I doing a good job, am I doing a bad job? People are social; we need people to share things with. To continue to be energized and challenged—that’s the best advice I can give.

 

What about you? Have you gone through a similar experience? What have you done to overcome it?

 

 

Written by Carmen Lence, Family Business Coach and Consultant at http://www.nextgenfamilybusiness.com/