by Deev Murphy, Guest Blogger
Yesterday’s Intelligencer featured an article on Gerhard’s Appliances, now into its fourth generation of being family-owned & run. The best way to describe the article is to say that after reading it, I immediately called up Bud Gerhard’s sister — a friend in her own right & married to someone I’ve known since he was born — to say, “Wow!” Not because of the family’s business success but because they’ve clearly done well at the business of being a family, an even more enviable success.
As the article points out, it’s rare when a company is successfully handed down from one generation to the next. According to Sally Derstine of the Delaware Valley Family Business Center, approximately 1/3 of family-owned businesses are successfully handed from the first generation to the second, only 12% make it down to the third, & a mere 4% make it to the fourth. It’s clear, reading Bud’s comments, that Gerhard’s already involves its fourth generation in running the business, including making critical decisions. Bravo!
What grabbed my heart reading the article was Sally’s description of what typically happens with family-owned businesses. “When the founder starts something, it’s very entrepreneurial, they have lots of control. Magically, they expect that the next generation can run it. At the core is the capacity for them to step into real conversations, to have mutual trust, in addition to a shared dream. If there’s no shared dream, it usually doesn’t work.”
Sally’s statement is in bold because it so perfectly captures what I’ve found to be true within families — that families that function well share these very same characteristics. At their core is the capacity for genuine communication, mutual trust & a shared vision. It hinges on a shared vision, which hinges on sharing genuine communication. Shared vision isn’t easy. It requires willingness to be both fully engaged AND able to detach.
Gerry Gerhard said that one of his family’s strengths is that they clearly delineate which family member does what in the company ~and~ they don’t bring work home.” (The second generation) separated work from family. It followed to be the same for the third generation. “I could have an argument with one of my brothers at a quarter of five. At 5:15, we are on the golf course, and we forgot about what we were arguing about.” They left it back at the store.
That is a key strength I’ve found in families that seem to get along unusually well — the ability to let differences remain in the past. Not glossed over, just not dragged along from one moment to the next. It is a strength I’ve long admired & one that I’ve gotten better at myself, largely because of my John’s influence. Don’t let something that caused a problem in the morning remain a problem all day — or all week, month, year, forever.
My guess is that the cause of the Gerhard brothers’ argument might still be there when they return to work, but am fairly confident that they will focus on resolving it in light of their shared dream. When you have a shared dream, everything falls together more easily because you can see how well something does or doesn’t fit into it.
A Shared Vision
The article got me thinking about mega busy dear friends who always set high goals. But their family doesn’t suffer from lack of attention because their shared dream is of a strong home life, with time spent with their children & with their parents & sibs & friends. That shared dream is the center pole of their life — everything else falls around it. Because of that shared dream of a strong family & a deeply connected circle of friends, they pursue all manner of new challenges, knowing that what matters most will always come first.
Steph Gerhard — fourth generation & the company’s director of advertising & marketing — talks about how she didn’t feel pressured to be part of the family business, but simply grew up in it. Steph gives praise to the senior generation -“It’s exciting that they listen to us & take our advice. They’re so open-minded & happy to give us a lot of freedom. They trust us.”
They trust us. A shared vision. A willingness to leave disagreements behind. The capacity to step into real conversations. Yes, those are core components of successfully handing down a business through the generations. And they are the basic must-haves for a successful family, where people don’t have to worry about feeling aftershocks of a morning disagreement at a family dinner that night. People know the vision they share & are comfortable talking about how best to make it come alive & stay alive. In addition, they trust each other 24/7/365. Not always be in agreement, not always see things the same way. They are always willing to step into a real conversation.
It’s that sort of approach that helps assure the next generation to lead a business comes from the next generation of family — and that families stay happily connected through the generations.
What Happens When There’s No More “Next”?
My guess is that Sally & her co-horts at the Delaware Valley Family Business Center do a bang-up job helping people figure out what they really want. They also help discover the best path forward to achieving it, and help them clear out obstacles blocking their way. A second guess is that not every family business they counsel ends up transferring from one generation to the next.
Sometimes, it turns out there is no shared dream. And that has to be okay, too. In families & in businesses. Sometimes, transition involves non-family members. Sometimes, transition doesn’t happen.
A Best Practice For Us All
All best wishes & heartfelt congratulations to my friend & her family for their remarkable success. Yes, dear friend — I know that your family isn’t perfect. None are. But yours does reflect the qualities of a “best practice” family, modeled in a very tangible, even quantifiable way that will be priceless for me in working with my older friends & their families. You’re not a perfect family, but you’ll be perfect for me to use as a yardstick of what can happen when there is real communication, mutual trust, & a shared dream! Thanks, thanks, & more thanks!
The article ends with a simply yet powerful statement from Bud — “Gerhard’s doesn’t sell appliances. We sell customer service.” A good motto for a business; a pretty darn good motto for families, too. Great “customer service” helps a family build on its strengths and turn around its weaknesses. More importantly, it allows the family to recognize when dysfunction arises (as it does in all families), & turn that around, too. It values respects honors all ages, from youngest to oldest. After reading the article, I’ve set the goal of meeting Bud, but also Sally Derstine. Bud speaks the language of my heart, but Sally speaks straight to my current true north calling.