What is the well-dressed office worker reading on the evening train this season? The Economist.
The Economist? Yes. An article on family businesses.
The article reported that in Europe and the Anglosphere over 90% of businesses are family owned. Even large public corporations can have strong family ties: Coca-Cola, Nordstrom’s, WalMart, and Disney all come to mind. But the typical family business is a small to mid-sized operation.
Most of the families want to keep their business in the family. A J.P. Morgan survey of second generation family firms found that 52% planned to be family-owned and operated into the next generation. A further 26% expected to at least maintain family ownership. But experts say that only a third of these businesses survive the change in generations. Perhaps as few as 5% of these firms are going concerns in the third generation. Those that do survive have usually created a clear process for governance in which boards containing some outsiders meet frequently and in which the family members themselves meet several times a year to reach a rough consensus on the firmâ€™s direction.
Some time ago in an idle hour I picked up a fifty-cent book from a library sale. I don’t remember why. Maybe the title gripped me. It must have been the title, because the book was a social scientistâ€™s anthropological account of a Mexican business clan and the rest of the writing was no better than one would expect. I devoured the thing, though. Hidden in all the jargon was something inexplicable, a desire, a dream, a vision, or in C.S. Lewis terms, a surprise of joy. I might call it the Spirit. In any case, there was something fine in this family. They squabbled often and went bankrupt more than once. They also put together some real and valuable businesses, provided work for any family members who were able, and knew intimately the story of their family and the situation of its current members. They gave up some extremely valuable buyouts and opportunities to go public in order to keep their businesses in the family. I admired them. I wished that I could meet them on some field where my salute would do them honor.
Back home a family further down the highway owns a business. They rent out light and heavy machinery. My brother works for them over the summers and on the weekends. So do others in the ward. So do their sons and daughters and sons-in-law. They are in many ways the emotional core of the ward, along with the extended family that does heating and air-conditioning. I admire those two families too.
Some of our Mormon family businesses are more prominent. The Marriots are in their second generation. The Huntsmans are still in their first. I believe Mitt Romney’s venture capital business is actually the modern iteration of a family concern. Further back in time we had the Browning family. I don’t think any Saints see these real-life families as a model of anything in particular though, nor do the Saints see a family business of any size as an ideal.
I wonder why not. Family business seems to help fill in the gap between virtue and the workplace. Not that the workplace is devoid of virtues nor that the pursuit of profit is wrong. This is going to sound like an anti-capitalist screed but it’s not. It’s just that the corporate employees of non-family firms, like lawyers, are agents, and have the difficult task of reconciling their desire to do good with their duties to their principals. This problem is even worse in large public firms where the principals are faceless stockholders whose only known characteristic is that they like profits. (The frequent attempts to explain why this or that socially conscious policy makes for good business are usually, in my opinion, just as frequently figleafs for managers blowing off their stockholders in pursuit of their own ends).
In the family concern, on the other hand, the owners and the operators are conjoined enough that they can seek for the good of the whole person, not just the bottom line. More importantly, the thin business relationships are threaded into thicker personal relationships, potentially strengthening both. Profits aren’t just profits, theyâ€™re the fruit of joint family work.
Having an enterprise gives a kind of coherence to the family structure too. It takes all the potential in families for cooperation and service and demands its actuality. (Which is why, incidentally, I think Mormon novelists are missing a beat if they focus on standard-grade families where the dad works at one thing, the mom at something else or at the home, the kids have parttime jobs while they save for college and their own careers somewhere else, etc. Putting all the family into a business gives a lot more possible structure and physical consequences to their interactions. Plus, you still get issues of authority and inspiration and the individual versus the group and family troubles and all that but far enough removed from a Church setting that they’re a little less touchy to handle.)
Owned and operated family businesses, it seems to me, can also avoid the worst problems of inherited wealth. Inherited wealth is a stewarship, sure, but it tends to get frivoled away because the stewardship is to no one in particular. In a family business one’s stewardship has a face. It is to the other members of the family who depend on the enterprise, to the future members who will inherit it, and it is to the previous generation who expect it to be kept up.
I am glad that we Mormons turn the hearts of the children to their fathers through genealogy work and storytelling. Iâ€™m glad we institutionalize that turning through temple work and family organizations. Family websites and family reunion groups also keep the flame alive. I just wishâ€”I have wished for a long timeâ€”that the workplace and career could involve family too. What joy is there in growing up and moving away? Let us stay and enterprise together.
I’m glad my brothers have chosen to be engineers in my father’s footsteps. I look forward next year to moving home to Albuquerque. My father has finally converted part of the pasture to fruit trees like we’ve talked about. We’ll find a place close by, my wife and I, and go over in the evenings to prune and pick and can and work together.