Meat+Poultry - February 2021 - 53

W

hen a great idea or a new
solution evolves into launching
a new business that includes the
participation of another family member, there
are plenty of considerations to ensure the
venture is successful and that Thanksgiving
dinner doesn't erupt into a fistfight. In the case
of siblings coming together to start a business,
it is essential that the relationship between the
two is stable.
As family-owned companies evolve
from one generation to the next, fewer
survive. According to the Family Business
Alliance, more than 30% of all family-owned
businesses successfully transition into the
second generation. Just 12% of family-owned
companies survive the transition to the third
generation and only 3% of all family businesses
survive into the fourth generation or beyond.
In the past five years, family-owned
businesses surviving beyond the first
generation dropped to 19%, according to
Price Waterhouse Cooper (PwC). Results
of PwC 2019 US Family Business Survey
concluded that transitioning a first-generation
family business to the second generation is
often challenging because for most of them,
this represents the first time the founding
generation has ever had to make a transition,
said Jonathan Flack, US Family Business
Leader for PwC. The generation one founder,
in most cases, has made most of the decisions
during its growth and likely hasn't shared that
responsibility, for better or worse.
" So, this is the first time a family is having
to put policies and procedures in place in
order to have effective decision-making, "
Flack said.
Among the takeaways of the PwC 2019 US
Family Business Survey, trust is a viable asset
for family businesses, both with employees
and customers.
" It's very important for family businesses
to codify their values into their strategic plan, "
Flack said. " It ensures that as transformation
occurs in the business, the roots, the values,
the things that family business knows that
make them unique are well embedded in that
strategic plan. "
There is also an ongoing need to focus on
succession planning, based on the fact that

less than 20% of respondents in the survey
said they have a robust, documented and
communicated succession plan.
" This is not a significant change from many
of the surveys we've conducted for the last 15
years, " Flack said, " which tells us that family
businesses continue to need to make this a
top priority. "

KEEPING THE TORCH LIT
Craig Aronoff, PhD, co-founder and principal
consultant with the Family Business
Consulting Group, based in Chicago, said
sibling business partnerships are more likely
to succeed if there is an understood equality
of commitment and effort. Commitment goes
hand in hand with trust when it comes to
growing a new family business, he said.
" A lot of times they may not know all the
questions they need to answer, but they trust
each other, and that's huge; that's a reason to
go into business with somebody, because you
can trust them. "
However, especially in a family business
that is as labor intensive as a meat processing
operation, not establishing well-defined roles
and an understanding of responsibilities and
equally dividing the labor can make or break
an otherwise positive relationship that can
ripple throughout the extended family.
" If there's not a clear understanding about
who's responsible for what, you're asking
for trouble in the first generation, " Aronoff
said. " Sometimes, two [founders] will come
in and they're both the boss and they really
don't make much distinction about who's
responsible for what, and they usually end up
having problems because of that, " he said.
A common arrangement in the meat
business is one of the partners works behind
the scenes in the operations part of the
business while the other is the face and voice
of the company, representing the company
with customers and in public. Titles may
be appointed at this stage of the company's
evolution, but Aronoff said those titles are
largely meaningless compared to defining roles.
" As long as there's mutual understanding,
I don't think the titles are that important, "
Aronoff said. " So, I'm less concerned about the
titles than I am about a clear understanding

" If there's
not a clear
understanding
about who's
responsible
for what,
you're asking
for trouble
in the first
generation. "
- CRAIG ARONOFF

www.meatpoultry.com | 02.21 | MEAT+ POULTRY

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Meat+Poultry - February 2021

Table of Contents for the Digital Edition of Meat+Poultry - February 2021

Meat+Poultry - February 2021 - 1
Meat+Poultry - February 2021 - 1
Meat+Poultry - February 2021 - 2
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Meat+Poultry - February 2021 - vdg - 1
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http://digital.meatpoultry.com/sosland/mp/2021_02_01
http://digital.meatpoultry.com/sosland/mp/2021_01_01
http://digital.meatpoultry.com/sosland/mp/2020_12_01
http://digital.meatpoultry.com/sosland/mp/2020_11_01
http://digital.meatpoultry.com/sosland/mp/2020_10_01
http://digital.meatpoultry.com/sosland/mp/2020_09_01
http://digital.meatpoultry.com/sosland/mp/2020_08_01
http://digital.meatpoultry.com/sosland/mp/2020_07_01
http://digital.meatpoultry.com/sosland/mp/2020_06_01
http://digital.meatpoultry.com/sosland/mp/2020_05_01
http://digital.meatpoultry.com/sosland/mp/2020_04_01
http://digital.meatpoultry.com/sosland/mp/2020_03_01
http://digital.meatpoultry.com/sosland/mp/2020_02_01
http://digital.meatpoultry.com/sosland/mp/2020_01_01
http://digital.meatpoultry.com/sosland/mp/2019_12_01
http://digital.meatpoultry.com/sosland/mp/2019_11_01
http://digital.meatpoultry.com/sosland/mp/2019_10_01
http://digital.meatpoultry.com/sosland/mp/2019_09_01
http://digital.meatpoultry.com/sosland/mp/2019_08_01
http://digital.meatpoultry.com/sosland/mp/2019_07_11
http://digital.meatpoultry.com/sosland/mp/2019_06_01
http://digital.meatpoultry.com/sosland/mp/2019_05_01
http://digital.meatpoultry.com/sosland/mp/2019_04_01
http://digital.meatpoultry.com/sosland/mp/2019_03_01
http://digital.meatpoultry.com/sosland/mp/2019_02_01
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http://digital.meatpoultry.com/sosland/mp/2018_12_01
http://digital.meatpoultry.com/sosland/mp/2018_11_01
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http://digital.meatpoultry.com/sosland/mp/2018_07_01
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https://www.nxtbook.com/sosland/mp/2017_12_01
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https://www.nxtbook.com/sosland/mp/2017_07_01
https://www.nxtbook.com/sosland/mp/2017_06_01
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https://www.nxtbook.com/sosland/mp/2017_04_01
https://www.nxtbook.com/sosland/mp/2017_03_01
https://www.nxtbook.com/sosland/mp/2017_02_01
https://www.nxtbook.com/sosland/mp/2017_01_01
https://www.nxtbook.com/sosland/mp/2016_12_01
https://www.nxtbook.com/sosland/mp/2016_11_01
https://www.nxtbook.com/sosland/mp/2016_10_01
https://www.nxtbook.com/sosland/mp/2016_09_01
https://www.nxtbook.com/sosland/mp/2016_08_01
https://www.nxtbook.com/sosland/mp/2016_07_01
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https://www.nxtbook.com/sosland/mp/2012_09_01
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https://www.nxtbook.com/sosland/mp/2010_11_01
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https://www.nxtbook.com/sosland/mp/2010_09_01
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http://digital.meatpoultry.com/sosland/mp/2006_12_01
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