On Feb. 17, 2017, family business owners, advisors and managers gathered at Columbia Business School’s Fourth Annual Family Business Conference to discuss “From Family Business to Family Enterprise: Successfully Climbing the Growth Ladder.” The main topics were focused on succession, governance, expansion, digitalization and using advisors to support growth.
In her welcoming remarks, Professor Patricia Angus focused on the importance of family businesses worldwide, especially in developing countries, and the lack of representation these companies have faced in the media and academic world. By starting with typical misbeliefs about family businesses and then proving them wrong with facts, Angus emphasized the school’s commitment to its Family Business Program and set the tone for the conversations for the rest of the day.
Here are the highlights of the four panel discussions, which were comprised of family business principals, advisors, experts and the keynote.
Growth Through Internationalization
Panelists Amy Binder and Manuel Dominguez spoke of their first hand experiences in family businesses. These two panelists work in different industries and had different reasons for international expansion. Binder started a new company after spinning off from her original family business, and due to the nature of her business, public relations, she needed representation in different geographic areas to support her clients worldwide. Dominguez’s family business (children’s clothing) based their decision on the need to grow and diversify country exposure from the headquarters in Spain. Regardless of the different contexts, both panelists agreed on the need of having trustworthy people or partners on the ground to succeed in the internationalization of their business. Binder spoke about the importance of growing her network given her PR business context, while Dominguez emphasized the value of having family members and tenured employees travel to communicate the values and the operational standards of the company. NYU Professor Belen Villalonga provided context to the discussion by sharing findings from a recent study that showed that family businesses are more successful in going international when there is family support, commitment and governance.
Growth Through Digitalization
Four panelists shared their different experiences with digitalization and emphasized its importance for growing a family business. Mitchell Kaneff explained how being able to stay at the edge of innovation in the packaging industry has allowed his family to successfully run the company for over 95 years. Brian Pallas spoke about the need to innovate in a non-destructive fashion and how his company was using constructive innovation to connect family businesses looking for opportunities in mergers and acquisitions. Steven Peltzman, a chief business technology officer, explained how his company challenges business leaders to stay ahead of the curve to assure their future growth. Finally, Edouard Thijssen shared his experience as a family business owner in his home country, Belgium, and as founder of Trusted Family, an application to improve the communications between shareholders, directors and family members in family businesses around the world. Disruption by and because of digitalization were common themes.
Clearly Defined Roles
In a fireside chat with Professor Michael Preston, Paul J. Fribourg, the keynote speaker, focused on the importance of having clearly defined roles for family members and making decisions as a unit. Fribourg is the Chaiman and CEO of Continental Grain Company, one of the largest privately held companies around the world, founded over 200 years ago. He shared personal stories about the dynamics within his family council and how the family prepares the new generations by highlighting the need for communication from a young age. An important part of the talk was dedicated to embracing growth opportunities through leveraging networks and not being afraid to find atypical solutions. Fribourg spoke about how family companies need to maintain their long-term thinking while making their decisions.
Financing and Ownership Structure to Support Growth
Panelists Alexandre Leviant and Jason Rubin shared how they had structured financing for their companies to sustain growth. Rubin described how companies in the precious metals industry could benefit from specific financing opportunities and how important this structure had been for his company to become one of the largest fully integrated precious metal refining and minting firms in the world. Matthew Pemberton shared his experience in analyzing different firm’s requirements to find the right structure and financing options to support the targeted growth level.
Role Played by Advisors and Governance to Support Growth
Panelists Bruce Benesh, Mark Rubin and Brett Sovine explained how they approach consulting for family businesses, including the importance of understanding the “family component” in these firms. Jack Mitchell shared how his advisor had helped his family over the years to structure his family council and advisory board, as well as with planning family succession.
A highlight of the conference was the ability for students to ask questions of a group with such broad experience in an academic setting, including: When should a family business set up an advisory board and how should it be structured? How can a family member who’s not in management be engaged in the business?