Since 2007, the nonprofit Capital Region Family Business Center has worked to help family-run businesses solve some of the unique challenges facing their companies. The organization recently took another step toward that goal by hiring Stella Premo as its first full-time, paid executive director. We talked to her about the ups and downs of running a family business.
What are some of the unique challenges a family business faces in comparison to a company that is not family-run?
Her Own Words
— Stella Premo
My best trait:
Making people laugh, unfortunately sometimes at my own expense
My worst trait:
I can be a bit impatient
Living person I most admire:
[Scholar and author] Brene Brown has a way of reminding me that each and every one of us has a story and we walk through this world doing the best we can, given our current circumstances
My proudest career moment:
Serving as the first female and the youngest president/CEO of the Sacramento Hispanic Chamber of Commerce
if I could have any other profession, I would be:An author — I will read just about anything and I love the art of storytelling
If you could, imagine what family dinners might look like when you work with the same people that you go home with. It’s often very difficult to draw the lines between what stays at the office and what is family. [Additionally], overseeing the unique needs of the business and trying to be supportive and helpful to the family members — those are definitely unique challenges.
What are some of the major mistakes many family-run businesses make?There are many, but one of the major ones would be employing people that are close to the family that maybe don’t have the right skill sets to be in the positions that the family wants them to be in.Is there one mistake more damaging than others?
It really just depends. The family dynamic is so different, and it often depends on the business. Someone running an agricultural business, for instance, might not have the same issues as someone who operates an insurance company or an accounting firm. But if the company has a good governance structure and a clear vision of where they want the organization to go, and they let that lead the business and the dynamic, they’ll probably not suffer from as many issues as a family that doesn’t have a good governance structure, or which hasn’t clearly defined the goals of the business aside from the goals of the family.
We’re in the midst of a historic generational transition from baby boomers and Generation X to millennials. Is that dynamic any more or less challenging for a family-run business?
What we’re seeing a lot is the development of leadership programs that help millennials understand what it’s like not to just work, but to work in a family business. Some of our members are trying to create an internship program where they’ll take somebody else’s child into their company and have their child work for the other person. That would give the younger generation the opportunity to work outside of their own family business for three years or so before they’re allowed to work within the higher levels of their own organization. It’s just a creative way to be able to give the younger generation some experience outside of the family and then having them be able to come back with a different mindset of what it means to be in a leadership position within their own family business.
Families often tend to play business issues close to the vest. But your organization encourages family-run companies to participate in peer-to-peer networking. How critical is this kind of communication?
“Imagine what family dinners might look like when you work with the same people that you go home with. It’s often very difficult to draw the lines between what stays at the office and what is family.”
One thing we’ve developed are networking groups we call affinity groups. There are four such affinity groups right now. The first is for the C-level and the second one will be more for up-and-coming leadership. We also have a women’s group and a geographically located group in the Yuba County area. [These groups] foster an intimate conversation among those in family businesses about things that are very close to home for them. That’s important because sometimes people in family businesses think they’re all alone, and in these groups they realize they’re not.
Succession planning seems to vex many family businesses. Why is that?
I would say that it’s the philosophy and the spirit in releasing control from one generation to the next generation. So you’ll have the original and the founder that built the business, and it’s a successful business, so there’s a lot of their pride and energy — that they’ve built something that they can hand off to the next generation. And then you have the next generation that’s like ‘Give me the keys, give me the keys, I’m ready to take this on.’ And they might do it a little bit differently or their vision might be a little bit different … That’s probably where a little bit of that conflict comes from. It’s the emotions that really get in the way of being able to do things thoughtfully and strategically.
We’ve talked a lot about the challenges of running a family business. What are the good parts?
Family businesses are the lifeblood of our region. They are job creators and invested members of our community.
Family-owned business have a unique sense of community responsibility and philanthropy. They care deeply about the work that they do and many of them are actively involved with nonprofits in our region. As consumers, we need to seek out these family-owned businesses and support them with our business. Because when they grow and prosper, so do we.