Corrections or additions?
These articles by Teena Chandy and Melinda Sherwood were published in U.S. 1 Newspaper on June 23, 1999.
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Family Business: The Inner Works
Families bring great strength to business, they complement
and support each other, says John Ward, founder of the Family
Business Center at Loyola University. “Families bring energy,
emotion, and passion to business and that works well. That is why
we have millions of family businesses and that is why they are so
successful.” Ninety percent of all companies in America are family
businesses, says Ward, and they produce 50 percent of our Gross Domestic
Product (GDP). Inc. magazine reports that 42 percent of the Inc. 500
(fast-growth firms) are family businesses.
Ward defines a family business as one that is owned by one family,
and one that expects the next generation of family members to carry
it on. An active speaker on family business succession and author
of “Keeping the Family Business Healthy” and “Creating
Effective Boards for Private Enterprise,” Ward will speak about
“What Works and Doesn’t Work for Family Businesses” on Thursday,
June 24, at 8:30 a.m. at the Family Business Forum of the George Rothman
Institute of Entrepreneurial Studies at Fairleigh Dickinson University.
Call Tom Kaplan at 973-443-8979 for membership information.
Formerly dean of undergraduate business at Loyola University, Ward
has been teaching strategic management and business leadership at
Loyola’s Graduate School of Business for 30 years. Ward majored in
economics at Northwestern University, Class of 1967, and has an MBA
and PhD from Stanford Graduate School of Business.
Contrary to what most people think, a family business is not necessarily
a mom and pop business, says Ward. Ford, Levis Strauss, Johnson Wax,
and the Washington Post are among the more renowned examples of businesses
that have been family-owned. “Family businesses are so much more
personal and interesting than non-family businesses,” says Ward,
who discovered his future specialty when he was working as a business
consultant. By the same token, family businesses face totally unique
struggles and challenges.
One of the contradictions about a family business is that people perceive
the family and the business as being in conflict with each other,
says Ward. The presumption is “that when you concentrate on the
family, you compromise the business and when you concentrate on the
business, you compromise the family. There seems to be a paradox and
resolving this paradox is the real art of a family business.”
At the workshop Ward will discuss how focus on the family can actually
be good and strong for the business and vice versa. “You have
to find a good synthesis that works in the best interests of both
family and business simultaneously.”
A major first generation struggle in family businesses is the transition
of control, says Ward. What can you do about senior members, often
founding members, who are not ready to let go of control? Nothing
much, in Ward’s opinion. “It depends on how intransigent the senior
generation is. You have to hope and wait.” Attracting competent
heirs to be interested in the business is another first generation
issue, adds Ward.
As the business moves on to the second generation, the struggle involves
brothers and sisters having to work with each other in harmony, says
Ward. “It is also important to keep other family members who are
not directly working in the business happy and have them continue
to be interested in the business as shareholders.”
“By the third generation, the strategy of the entrepreneur is
often tired and needs to be refreshed and re-energized,” says
Ward. Finding ways to revitalize and rejuvenate the approach of the
business, creating a flexible culture for the business, dealing with
change, and adapting new ideas are usually third generation issues,
says Ward.
“There will be conflicts between brothers and sisters, and power
disputes between generations,” says Ward. “How they handle
it is what makes the difference. Usually they care about each other
and there is a deeper level of commitment and responsibility towards
the business.”
Counseling can help during difficult times, says Ward. “If a family
plans far ahead, it can work out many of the critical issues.”
For example, in anticipation of a divorce situation, many couples
draw up marriage contracts to make sure the business stays in the
family. But Ward also adds that couples in family businesses do not
usually get divorced.
Families in business should agree on rules of conduct, on how they
are going to make decisions, says Ward. “We encourage family businesses
to have independent boards of directors formed by people in the community
the family has a great deal of respect for.” Boards are typically
formed of family members, but ideally should include non-family members,
says Ward. “When family members disagree, they can get objective
input and counseling from the board.”
Successful family businesses are guided by values and a philosophy
that the family will work hard to resolve its problems, says Ward.
For example, Ward points out, the value of trust. “When you emphasize
trust in the family, it provides strength for the family. When you
emphasize trust in the business, it provides strength for the business.
When you focus on such values rather than issues,” says Ward,
“you lift yourself above the smallness of the issue to something
more important and powerful — the values that will help the family
and the business overcome all odds.”
— Teena Chandy
Top Of PageRx for Credit `Affluenza’
They call it “affluenza:” the cultural edict
to spend much more than one earns. Scott Dingwall, director
of Consumer Credit Counseling Service (CCCS) of Central New Jersey,
a nonprofit agency that helps people climb out of debt, says its an
epidemic. “Almost everything today is designed around the `buy
now, pay later’ idea, but if you can’t afford it now, how are you
going to afford it in six months?”
Last year the Consumer Creditor Counseling Service’s parent organization,
the National Federal of Consumer Counseling Services (https://www.nfcc.org),
returned $4 billion to creditors and pulled hundreds of people out
of the red. Whether you are a few thousand dollars in debt, or on
the verge of bankruptcy, the agency provides free professional budget
counseling, negotiates lower finance charges with creditors, and puts
you on a realistic payment plan.
The only catch: you have to let go of those credit cards. “We
design a plan that you can handle, that creditors accept, and we act
as the middle person,” says Dingwall. Consumers make payments
directly to the CCCS for a minimal monthly charge, and in return,
get peace of mind. “It’s not a loan. We try to keep people within
a four to five-year payment program.”
The CCCS is funded in large part by creditors and businesses themselves.
“They understand that being supportive is a win-win situation,”
says Dingwall. “We help the client get back on his feet so they
don’t have to do collections.”
The CCCS is a service of the Family Guidance Center, a nonprofit community
service agency that helps people cope with problems related to alcoholism
and drug addiction. The debt-management program was established in
1993. Today, the CCCS has 1,400 offices throughout the country. The
New Jersey headquarters is located at 117 Estate Boulevard in Trenton,
and the agency has satellite offices at 253 Nassau Street, Mount Holly,
Flemington, and Plainsboro. The agency just hired a bilingual counselor
to work with Spanish-speaking clients.
More and more, says Dingwall, people are beginning to see the emotional
cost of overspending, particularly on the young. When Mitzi Pool,
a freshman at the University of Oklahoma committed suicide, she left
checkbook and credit cards — showing debts totaling $2,500 —
strewn across her bed. A few years earlier, another young man committed
suicide leaving $10,000 in debt.
This has sparked criticism of tactics employed by credit card companies
to lure in students on college campuses or through the Internet. “Credit
is much more readily available than it ever was,” says Dingwall.
At the same time, he says, people are less-prepared to handle their
finances responsibly. “People come out of school and even college
and don’t have good money management skills,” he says. “They
never had a course that taught them how to balance a checkbook.”
The only way to use credit without getting burned, says Dingwall,
is to practice sound financial habits all-around:
Make a budget. “The biggest thing people do is underestimatetheir expenses, and overestimate their pay,” says Dingwall. Toavoid that, he says, assume you are going to pay for unexpected carbreakdowns or medical bills. “That’s when people normally reachfor their credit cards,” he says.Don’t carry a balance more than a month. Creditors alwaysget you on finance charges.Negotiate with creditors. “Always try on your ownto negotiate a lower interest rate,” Dingwall says. If you havere-paymnt problems, “tell them what is going on because they mayhave helpful programs, such as hardship or internal help programs.”If creditors see you have good standing, they’ll consider this, andmay give you anywhere from three to nine months of relief.For more long-term budgeting, the CCCS offers these tips:Involve the entire family. If your spouse wants to travel,you’ll need more money in retirement. If your child wants to attenda private rather than public school, more money must be set aside.This is a good time to work out what sacrifices are going to be madeand where.Establish long-term and short-term goals. Start with short-termcost-saving goals, such as packing lunches. Trim the fat. It is notonly good for your pocket book now, it builds healthy habits in thefuture.Prioritize. Rank your goals from top to bottom.Recognize that goals change. What you wanted a year ago,may not be what you want now. Review your goals annually.Start saving. This is the hard part. Calculate how muchmoney per month has to be set aside, and if possible, have it automaticallydeducted from your account or put into a 401k or earmarked savingsaccount.Credit, says Dingwall, is not all bad. “In some cases, itcan be good financial planning. Some creditors will essentially giveyou an interest free loan for up to six months.” Keep in mind,though — you will have to pay eventually. The key is to thinknow, not later.Top Of PageWomen in Hi-TechHi-tech industries eagerly seeking scientists shouldtap into a virtually unmined pool of talent: women. Research conductedby Catalyst, a nonprofit research and advisory organization that workswith businesses to advance women, surveyed 30 leading women scientistsand discovered that more than half were given little or no informationearly-on about opportunities in the corporate job market.Companies need to market better to women, says Sheila Wellington,Catalyst president. She says businesses need to work harder to recruit,retain and advance talented women. They can start by funding moreinternships, setting-up mentor programs with local educational institutions,collaborating with professional associations of women, providing seedmoney to women graduate students, and establishing funding for visitinglectureships and distinguished academic scientists to work with scientists.Catalyst conducted interviews with 30 pioneering women scientistsin Fortune 500 companies to find out how they are overcoming the absenceof female role models, misconceptions about women, and other barriersto advancement in their field. All emphasized the importance of cultivatingtechnical expertise, developing a successful style, obtaining stretchassignments, choosing a mentor, and networking both inside and outsidethe company. Some of the most successful female scientists offeredpersonal advice:Mirror the behavior you’d like to see in others, saysJudy Giordan, vice president and corporate director of researchand development at International Flavors and Fragrances, which hasan office on Docks Corner Road in Dayton. “If you want to seeopenness, generosity and helpfulness, be that way yourself,” shesays.Find a company that values your strengths, and can helpyou overcome your weaknesses, says Andrea Sanders, former vicepresident of research and development at Rhone-Poulenc North AmericanChemicals, now head of her own consulting firm. “Don’t be afraidto open doors to see what’s there. Walk through some of them,”she says.Have complete confidence, says Frances Allen, seniortechnical consultant to IBM’s research solutions and services vicepresident. “Believe that you’re dead right,” she says. “Thisis an exciting period in science and women are going to play a greatpart in it.”Top Of PageExport Assistance CenterThe Newark Export Assistance Center is compiling theU.S. Department of Commerce-U.S. Exporters Yellow Pages. This resourceguide is distributed to United States Embassies, consulates, and businessoutlets in 190 countries. In addition, registration in the YellowPages directory will include an in-depth company profile on the Internet.Register at https://www.docexport.com or call Harvey Rubensteinat 973-645-4682.Top Of PageRe-CalculatingCar InsuranceUnderstanding New Jersey’s New Auto Insurance System,”a comprehensive booklet published by the Insurance Council of NewJersey (ICNJ), offers New Jersey drivers information about the AutomobileInsurance Cost Reduction Act (AICRA), the latest legislation to addressproblems associated with the high cost of automobile insurance. Developedin cooperation with the Independent Agents of New Jersey, the ProfessionalInsurance Agents of New Jersey, and the Insurance Brokers Associationof New Jersey, this brochure offers a brief summary of the changesin the law that will affect New Jersey motorists and how motoristscan control their own auto insurance costs.”The greatest challenge in implementing these new laws is to helpconsumers understand the positive aspects of these changes and howto take advantage of them,” says Rachel Enoch, an editorat INCJ. “It is important that consumers understand the many newpolicy options and cost reduction measures available to them as soonas possible.”There are three ways that policyholders can benefit from the implementationof the various reforms and the mandatory rate reduction:1. Any policy bought after March 22 should contain thenew policy options and reflect the mandatory rate reduction.2. Any automobile insurance policy processed for renewalby any insurance company on or after March 22 will contain the newpolicy options and reflect the mandatory rate reduction.3. If a policyholder wishes to change the policy beforeits scheduled renewal to take advantage of the new reforms, it canbe done. The policyholder should contact the insurance agent or company.They will offer advice on how to request this type of change.Consumers can obtain more information by calling 800-NEW-CHOICEor at https://www.njautoreform99.com.Other publications by the ICNJ include “Your Guide to Shoppingfor Auto Insurance,” explaining the types and amounts of coverageconsumers can purchase and also including a rate comparison form consumerscan use when they shop. “The reforms under AICRA, as well as theimplementation of tier rating last year, makes it more important thanever for consumers to shop around,” says Enoch. “This brochurehelps consumers make informed decisions about the insurance they arebuying.”Top Of PageBuilders’ Initiative:Less Red TapeTwo recently passed laws will help builders to cut someof the knots of red tape and could therefore help trim constructioncosts.The Uniform Wording of Guarantees (S-164/A 1775), initiated by theNew Jersey Builders Association (NJBA) for the use of a standardizedform to be used for performance guarantees, maintenance guarantees,and letters of credit, has become the law of New Jersey. “Thenew law will benefit both municipal government and the private sector,”says Joseph Mutinsky, NJBA president. “Standardized bondlanguage will save time and money, while providing greater legal certaintyto all parties.”While the new law has an immediate effective date, its benefits willnot be realized until the form is approved by the commissioner ofthe Department of Community Affairs (DCA). “The NJBA hopes towork closely with the Department of Community Affairs in the developmentof the standard form,” says Mutinsky.The DCA and the builders won a major victory in another matter –engineering standards. Rutgers University planners and engineers fromthe Center for Urban Policy Research drafted engineering and designcriteria for roads, drainage systems, and underground utilities thatserve residential subdivisions. The DCA adapted these criteria in1997 as the Residential Site Improvement Standards (RSIS) and thelegislature approved them.But the municipalities objected. The New Jersey League of Municipalitiestold state Appellate Court in 1998 that the RSIS was an intrusionon “home rule.” That court ruled in favor of the standardsand the Supreme Court concurred in a recent decision, saying thatthe legislature had consciously departed “from the traditional`home rule’ aspect of zoning” in order to reduce housing costs.”We believe that the Supreme Court has wisely distinguished betweenmunicipal planning, which determines what will be built in a community,versus the engineering standards that dictate the safety and soundnessof how it is built,” says Mutinsky, who represents 1,800 memberfirms. “Statewide standards mean that individual municipalitiesno longer need to spend property tax dollars to redesign the wheel.Rutgers has done it for them, and that means savings for local governmentsand homeowners alike.”To know more about either law, call Carol Ann Giancarli, NJBAdirector of legal and legislative affairs, at 609-587-5577.Top Of PageCorporate AngelsFifty-five is a good number for Princeton Universityand for Peter Lewis, chairman and CEO of the Progressive Corp.,the auto insurance provider. Lewis, a member of Princeton’s Classof ’55, has given $55 million to the university, $35 million of whichwill be used for the new Institute of Integrative Genomics.”I’ve always been a risk-taker myself, and this new instituteseems very much in that spirit,” says Lewis of the institute,headed by Shirley Tilghman, which will integrate research in molecularbiology with such fields as chemistry, physics, engineering, and computerscience.Ken Boxley, an entrepreneur from Beverly Hills, California,has donated $315,000 to Rutgers University for a new scholarship tohonor Rutgers alumnus Paul Robeson. The Rutgers Endowed Paul RobesonScholarship will be awarded to a full-time New Jersey undergraduatebased on academic promise and financial need.”I thought my contribution could help keep more of the state’sbrightest students here in the state for college, while also honoringPaul Robeson and the values he stood for,” says Boxley. A leadingdonor to Rutgers for several years, Boxley has contributed more than$1 million to the university.Robert W. Basco, managing partner of the law firm HillWallack, was awarded the Friend of Eden Award at the Eden Family ofServices Annual Dinner. The firm was the primary corporate sponsorof the 1999 Eden Dreams Gala, Dreams of the Millennium, and has beenproviding continuous support for Eden’s efforts to improve the qualityof life for children and adults with autism.The Robert Wood Johnson Foundation has approved a grantof $15,000 to the Rescue Mission of Trenton’s “Providing Homeand Hope — Building Futures” capital fundraising campaign.The goal of the campaign is to raise $300,000 to extensively renovatethe exterior of the historic Cracker Factory building which housesmany key aspects of the Mission’s operations.The Harmony School, Bristol-Myers Squibb, American Cancer Society,Sarnoff Corporation, The Hillier Group, Bloomberg Financial Markets,the Medical Center at Princeton, Mercer County Office of EconomicDevelopment, McNeil Consumer Group, Engelhard Corporation, JanssenPharmaceutica, J&J Consumer Group, Merrill Lynch, Obik, Paine Webber,and Princeton Learning Systems, are the Princeton companies participatingin the Mentoring/Internship program for Hun School students. The programallows students to spend three weeks working in the field to developskills and prepare them for the transition to college and the workworld.Previous StoryNext StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
