Innovation: The Worst of Times… and the Best of Times

Joe Schmieder

It was in the middle of winter in 1930, the heart of the Great Depression, when Howard Tuthill walked through the cavernous factory thinking about what to do with his family's business. It was eerily quiet as dim sunlight streamed through the narrow rooftop windows onto the grease-laden cast-iron machine tools. Only a couple of people were working at a wooden bench on a small order for cutting-blade parts for one of the local furniture companies. The once bustling factory that manufactured woodworking equipment—saws, sanders, planers, and lathes—no longer had a steady stream of orders coming from the area's premier furniture makers. Everything had slowed to a crawl.

Dismayed, Howard left the factory on the north side of town and walked downtown by the lines of people waiting in front of the YMCA building for some meager portions of food. He watched as the government official scooped up soup and tore off pieces of bread for each needy person. He kept walking and kept thinking. Two seemingly disparate images floated around his mind continuously—sharp saw blades ripping through a thick piece of white oak and a man's hands ripping off pieces of bread from a large, soft-crusted loaf.

"THAT'S IT!" Howard blurted out loud. The dots finally connected.

Howard raced back to the factory to begin developing the first retail bread slicer. Fast-forward to this century, and you will find bread-slicing machines, modernized since those early models, in 80 percent of the supermarkets in the U.S. and most retail foodservice bakeries, such as Panera Bread. Over that same time frame, the Tuthill family passed the business down to the third generation, who continued to diversify the company into bread packaging and labeling.

Faced with the current market conditions, how can you respond creatively, as Howard did? Is this current economic funk actually a conducive period for developing your company's next innovation?

YES. Now is an excellent time for family and closely held businesses to step back and take a look at what is going on in their industry, what the business's unique strengths are (that is, those that cannot be copied by your competition), and how these might be leveraged into new opportunities. What have your customers been complaining about, and how might you address these complaints? What do your salespeople describe as the real reason you are unable to win over those prospects, and how might these objections be overcome? What are your suppliers saying about other companies to which they provide products or services, and are there areas where you are superior to these competitors? What products or services have you been thinking about developing and offering in the marketplace? Answers to these questions can serve to generate thoughts that can be filtered down to a meaningful list of potential innovation opportunities—be they new products, new markets to serve, or a superior way to manufacture your product or bring it to market.

Beyond generating ideas, companies that successfully produce a steady stream of innovative products and services have a disciplined process for capturing, prioritizing, developing, and commercializing these ideas. Howard's bread-slicing idea did not follow a disciplined process, but subsequent company developments did. The adjustable-width slicer that could cut thick Texas toast or thin deli slices followed a new product development process that clearly identified the unmet needs of customers and guided the path to market introduction.

We have all been exposed to the accomplishments of large companies that are recognized as innovators. 3M created the now-famous Post-it Notes® out of a lab mistake, and Boeing is in the midst of finalizing the game-changing Dreamliner 787. Although a "killer app" product or service can create a whole new product category or change an entire industry, radical innovation is not necessary for most small to medium-sized private companies. Incremental innovation can also drive significant value. Modifying a product, such as by taking a bread slicer and morphing it into a bagel slicer, can extend an entire product line without requiring the risk or investment necessary to expand into a new customer base or market.

An innovation can also come in the form of a new business model or a different way to go to market. Michael Dell showed the world how to create a made-to-order computer via the Dell website, shrinking lead times and bypassing the retail outlets. Or how about an innovative service? Again, the Internet played a key role in the recent success of Google, eBay, and Facebook.

We live in a time when information—what customers want and don't want, what competitors are offering, and what new business models have been tried—is readily available. The challenge is to ask yourself the right questions, create a process for filtering opportunities, and create a culture that fosters and rewards innovation. This turbulent economic period is actually a prime time to spawn new creative ideas, because people are more open to change and may need to think outside the box to keep their business afloat. It is an opportunity to capitalize on the new world order that is unfolding in front of us. Can your company create the next innovation that lives up to the clichéd standard set by Howard Tuthill—the best thing since sliced bread?

Family Business Light and Dark

Mark Green, Ph. D.

Death of a Salesman. Buddenbrooks. The Godfather. The Count of Monte Cristo.
These great works of literature have larger-than-life characters and sweeping themes of love and loss. They also share something else: They're about family businesses. Sometimes the fictional business is like a living, breathing character itself (Buddenbrooks, The Godfather). Sometimes the business is more for setting and context (The Count of Monte Cristo). As a family business researcher and consultant for over 10 years, I'm not surprised that so many authors, playwrights, filmmakers, and TV show creators look to a family livelihood. The real-life intersection of family and work, arguably the two richest sources of self-worth (and pain), is rife with the most archetypal themes and conflicts, the lightest and darkest sides of the human psyche and human interaction.

Take the example of a Northwestern business family I've worked with over the years. Two generations ago, their grandfather invented a product that is still a household name. They became bazillionaires. Of course, with the money came complexity. And conflict. The founder's oldest son assumed he would take over the business. His mother doubted his capabilities and enlisted the second youngest son, her favorite, to "watch over" his brother's dealings. So began a lifelong struggle between the siblings for power, respect, and appreciation. Now in their 70s and partners in a variety of businesses, the brothers still bear those resentments like battle scars and festering wounds. But there has been much bonding as well, like when an outside business partner tried to take control of one of the family's core businesses, and all seven siblings banded together to wrest it back. The second generation has its own children now, and these third-generation members struggle to find their place in the business, perennially stuck at the kiddie table though they're now in their 40s themselves. Not surprisingly, the version of history each third- generation cousin carries bears remarkable resemblance to the stories, complaints, and confessions of their parents. In this sense, history is indeed destiny.

One thing that helps is something I observed early on: Rarely are a family member's intentions all bad. There are few Darth Vaders or Goldfingers or mustache-twirling villains ready to tie the family and its business to metaphorical train tracks. Sure, there are personal agendas galore, whether for one's own good or for that of the business. But more often than not, there is also a deep appreciation for the business past generations have built and for the objective of maintaining family harmony. Often, business families are replete with amazing stories about amazing people, from real-life rags-to-riches tales even Horatio Alger couldn't have penned to the account of a founder whose business provided jobs for half the town. When families draw stories like these from their database of history, they're often inspired to enrich the present-day script with their own cooperation-fueled triumphs, like when my client family clawed back control of their business. By reminding families of the values they stand for and giving them permission to rewrite their scripts, I help motivate them to improve their business, themselves as professionals and people, their relationships, and their communities.

I wrote my book to help business families understand their challenges through the lens of generational conflicts — it's hard enough for members of a single generation to get along, and now we have up to five generations working in a family business, each with its own values, biases, and expectations. These families face important choices: They can choose to focus on and intensify their differences, whether in regard to risk-taking or money-handling or anything else, or they can harness their shared passions for family, business, and community. By choosing the latter, they can move steadily from dark to light, sidestepping the larger-than-life conflicts that have made family businesses such rich settings in our own community.

÷÷÷
Mark T. Green Ph.D. is a family business consultant and Clinical Professor of Family Business at Seattle University. nside the Multi-Generational Family Business: 9 Symptoms of Generational Stack up and How to Cure Them by Palgrave Macmillan is available as a hardcover or ebook at all major bookstores. For more information please visit www.markgreenphd.com

Confidentiality in the Information Age

In the age of always-on information, the line between public and private is becoming increasingly blurred. News programs and articles are filled with unnamed sources divulging corporate secrets and leaking policy decisions. Armies of paparazzi follow celebrities' every move, turning the most intimate details of their lives into fodder for tabloid magazines. The information on MySpace and Facebook pages stealthily spreads across the Internet, turning private information public without the original author's knowledge or consent. In short, nothing is confidential..

Only a generation ago, people valued confidentiality and privacy, equating it with loyalty. Airing your own or others' dirty laundry in public simply wasn't done, even by the media. Today, however, the notion of confidentiality hardly exists. People rarely keep secrets; individuals share their private thoughts with total strangers in blogs and online forums. Therefore, it is reasonable to be concerned that many in your family-owned business will treat nonpersonal and confidential business information at least as nonchalantly.

Even if a strong sense of privacy has eroded in our broader culture, businesses still need ways to handle confidential information. This can be particularly challenging in a family business, where the additional distinction between business and family can add complexity to notions of confidentiality. Based on my experience working with family businesses, I offer the following tips on handling confidential information in an age where confidentiality and privacy are increasingly undervalued.

Assume That There Will Be a Breach of Confidentiality

First, assume that most information will not be kept confidential. Many people do not understand confidentiality, and the younger generation in particular has been raised in an environment where people
rarely keep secrets. Assume that whatever you say, even behind closed doors or in a private meeting, can and will be shared with others. For those decision makers with whom you must share confidential
information, be explicit in your explanations of what you mean by "confidential" and remind them that part of earning the full trust of leadership means demonstrating an ability to reliably keep necessary confidences.

In addition, assume that all electronic files will be shared. Documents, spreadsheets, and especially emails tend to have a life of their own, reaching far beyond their intended audience. Never use email when you need to communicate something privately, since emails can be forwarded with a simple click. Confidential information is most safely shared through face-to-face communication.

Close the Doors

Trust is often one of the greatest assets of the family business, so enterprising families have a lot to lose if they don't safeguard trust effectively. For any family business to succeed, the family must agree that what happens behind closed doors stays there. As a consultant, I often teach family -business owners that conflict and disagreements are fine, as long as they are worked through behind closed doors. When the stakeholders in a family business have a closed-door conversation, no matter what type of conflicts or heated discussions may occur, they need to be able to present a united front as soon as the doors are reopened. Doing anything less violates trust and invites others to second-guess the business' leadership. Family businesses cannot risk appearing divided when they are in front of their employees. Adopting a formal code of conduct that touches on these types of issues can be beneficial, because it sets rules and guidelines for working through confidential matters while establishing clear consequences for violating those rules.

Seek a Common Definition of Confidentiality

In a multigenerational workplace, employees have very different understandings, assumptions, and expectations of confidentiality, even when they come from a single family. Generations X and Y (people born between the mid 1960s and the early 1990s) have grown up in a culture that does not strive to maintain confidentiality. In general, they do not understand or respect privacy. This is not a criticism; it is merely a fact. This is different from the world in which the older generations were raised, when privacy and confidentiality were respected and highly valued.

Because of these different assumptions and understanding, we must be more careful with our language. Stock phrases like "keep this under your hat" and "you didn't hear it from me" have lost their meaning. Today we might be more likely to use these phrases to get others' attention and practically guarantee that it will be spread around, rather than to mean that we truly expect what we say to be held in confidence.

Family businesses have to make concerted efforts to establish clearer boundaries for handling private information. Some families with whom we have worked meet this challenge by prefacing confidential information, reminding each other: "You'll be told things here that you shouldn't even tell your significant other." While that may sound extreme or even inappropriate, it does make explicit where the boundaries
lie.

In addition, we would recommend that families invest time and energy in educating their younger generation about what confidentiality means, why it is important, and how they can ensure they are not inadvertently violating an important confidence of the business. There certainly is an argument to be made for open and honest communication, but there is also a need to respect privacy and prevent leaks that could be hurtful
to the family or the business.

As it is virtually impossible to keep a secret in the information age, the most viable long-term strategy for a family business to confront this challenge includes education and caution. First, educate. Don't assume that the younger generation understands confidentiality in the same way you might. Second, be cautious. Only share truly sensitive information once a person has consistently demonstrated he or she can appropriately handle confidential information.

Hopefully these tips have provided you some guidance to help you manage this in your business.

Five Trends of Family Business

A client recently asked me an interesting question regarding family business: what are the five major
trends you see in family business? The question is a good one. If you wanted to answer this on your own,
you could try to get through the Wall Street Journal or your local newspaper (if you still have one), if for no
other reason than to add credence to the trend that reading is the leading cause of depression. I would
not advise it because even a simple escape article on fashion offers tips on how to dress for the recession.
So in order to protect you from any further depression, I offer my take on the five mega-trends that I see
in family business in 2009 and beyond without the E or R words (that is economy and recession in case you
have not been paying attention).

1. The New Demography. In every inch of the world the human species is changing and doing
   so very quickly. While it might not feel like it sometimes, humans are better off today in terms of
   health, wealth, and the basic human condition than at any time before. The result is that we are
   living longer, and this alone is straining society. Another complication is that technology and
   industry have made us a very mobile and interconnected society particularly regarding business
   and culture. The impact on family businesses is tremendous in terms of succession planning,
   which now is further complicated by people living longer.
   But perhaps the most profound impact, is the "stack-up" of various generations in the family and
   the business that has resulted from longer life-spans and delayed retirement. Furthermore,
   cultural and societal norms are stressed by the melting pot of positions, expectations and
   perceptions that are all culturally and generationally valid. The problem is that there is no easy
   way to make decisions when everyone is right from their own perspective, and when the old rules
   no longer apply.
   Hot Spot to Watch: China's life expectancy has increased 8 years in the last 20 years, as well as
   the documented disparity of males to females (currently estimated at 20 million more males than
   females), and then add into the mix of ancient cultural norms of birth order, birth right and
   gender clashing with the modern generational pressures.
   
   
2. The New Diversity - Generational Differences. In the United States we are faced with the
   new reality that we have five distinct generations in the same house and work place. The five
   generations GI Generation (1905-1924); Silent Generation (1925-1944); Baby Boomers
   (1945-1964); Generation X (1965-1980); and Generation Y (1981-20??). Each generation has its
   unique outlooks, perspectives, communication styles, and perceptions. The result is a living
   "Tower of Babel" where each generation has a difficult time understanding, communicating and
   working with each other. Family businesses must pay careful attention to build bridges and
   understanding between the generations.
   Hot Spot to Watch: The "stack-up" of ownership with the GI Generation and/or Silent Generation,
   as Baby Boomers wait for their turn to lead and own, while right on their heels are their own
   Generation X and Generation Y children expecting their shot at ownership/leadership.
   
   
3. What is Family? Many people might not be aware of the fact that one of the most
   contested debates amongst academics, government officials, sociologist, anthropologist,
   psychologist, and theologians is how to define the modern family. Forty years ago most
   Americans defined family as that of kinship through blood and marriage. The current
   demographic realities represent a society with a decline in marriage, rise in cohabitation,
   demographic realities represent a society with a decline in marriage, rise in cohabitation,
   increased divorces, multiple remarriages, and re-parenting. The question for the family business
   is how do we define family? This basic question should be asked often, as the dynamics of the
   family continues to change over time. My experience with clients that ask this question that are
   able to talk about whether they choose "blood" only, or have the most open definition, is that
   they spend time thinking about and discussing this fundamental question that propels the family
   business.
   
   Hot Spot to Watch: With an increase in remarriages and the phenomenon of "his", "her" and "our"
   kids succession and estate planning can be complicated and the role of an outside expert can be
   extremely helpful for a family business to navigate these challenging areas with the hope of still
   having a good holiday season.
   
   
4. Power of Spouses. Some time ago, Dr. Leon Danco's classic book Beyond Survival warned
   the family business leaders' lack attention to the in-laws and spouses was the quickest recipe to
   family business disaster. With more generations in the mix, along with the increased complexity
   of family roles, Danco's point is even more important. Today spouses and in-laws are far more
   likely to be inquisitive, expect to be involved, and are more aggressive in voicing their opinions.
   Let's face it, the family business has tremendous influence on all relationships within the family
   and the stress that resonates from a family business can severely impact every relationship. To
   be successful, the family business must look at the system of family ownership and management
   like a good party where everyone brings something. This means that each person has at least
   one clear role, an opportunity to contribute, and has a free flow of communication.
   Hot Spot to Watch: Failure to communicate and educate spouses about the business and leave
   time for the family leads to misunderstanding and poor communication. At the same time, failing
   to respect the contributions of spouses and the boundaries between family and business is
   certain to lead to serious problems.
   
5. I Am Too Busy. I am known by family and friends for making silly but simple New Year's
   resolutions. A couple of years ago I decided that I would attempt to go the entire year without
   saying the phrase "I am too busy", or I would find myself and/or be publicly admonished by my
   family or friends. I can tell you this was one of the most challenging New Year's resolutions and it
   took me until about October to break the habit.
   The point is that we are all very busy as our lives are packed with social, work, personal, family,
   community, commitments, and events that run our lives. The simple fact is that is there nothing
   more important than our families. And if we have a business, it also needs to be a high priority.
   We know that in today's world if it is on our calendar we usually get it done. Then doesn't it
   make sense that we put time on our calendar to spend time with our family to get to know each
   other as adults socially? This is not only important for one generation but it makes the time for
   the next so they can build their relationships as adults and business partners.
   
   Hot Spot to Watch: In the model of generational handoffs of siblings to cousins we must
   acknowledge the fact that our time together as siblings and cousins has diminished as we
   become more mobile and geographically dispersed, as well as the increasing time constraints
   placed on us by busy calendars and lives. We must make the space in our lives as family business
   people to interact socially if for no other reason than to build bonds with our children and
   expand our knowledge of each other as adults. Check how many times you say, "I am too busy".

Articles purchased or downloaded from Family Business Consulting Group® are designed to provide
general information and are not intended to provide specific legal, accounting, tax or other professional
advice. Since your individual situation may present special circumstances or complexities not addressed in
this article and laws and regulations may change, you should consult your professional advisors for
assistance with respect to any matter discussed in this article. Family Business Consulting Group®, its
editors and contributors shall have no responsibility for any actions or inactions made in reliance upon
information contained in this article. Articles are based on experience on real family businesses. However,
names and other identifying characteristics may be changed to protect privacy.

Conflict in Land-Based Family Businesses

The land-based family business represents many things to a family member who has inherited or will
inherit part of the farm, ranch, vineyard, forest, dairy, or plantation:

• The land is the homestead, the parents' or grandparents' home, or a compound setting where
  several relatives live, maybe even complete with a family cemetery
• Hired hands, long-term employees and their families, and the veterinarian are extensions of the
  family
• It is the place of harvest, fishing, hiking, planting, pruning, disasters endured and survived,
  holidays, beautiful sunsets, summers with cousins, horseback riding, weeding, fence-mending,
  hunting, roundup, livestock sales, and many family gatherings

It is more than a business; it is a family's sense of place in this world—the physical ties to the earth
creating a deeper connection to the family's identity than many other types of companies. The family is
bound together as a family through the business that is supported by the land, and then by a commitment
to sustaining this land and caring for it. Perhaps as much as any family business, a land-based family
business engenders in its owners a passionate identity of being a steward.

Thus, the emotional attachment to these businesses among families with remote members is very strong,
which can be a good thing for connectedness yet also represents a great potential for conflict. The types
of conflicts we often see in land-based businesses include these:

• Non-operating family members may resent those with homes on the land who have greater access
  to it and all the associated amenities, free housing, employee assistance with maintenance, access
  to vehicles and fuel, use of equipment, the recreation opportunities the grounds provide, and
  recognition as the owning family, even though there may be many non-operating, remote
  shareholders.
• From the perspective of those who live at the family business, they are the ones with the burden of
  always being the hosts during family gatherings, with the assumed expectation by those who live
  away from the business that they will be the center of attention for the duration of their visit.
• Even among those who operate the business, there are conflicts when some live on the premises
  and others do not. The number of hours and level of commitment put into working the business,
  plus being on call or always the first to respond to a problem, is perceived to be a much greater
  contribution than that of those who live off-site and commute every day.
• The emotional connections to the land may at times seem irrational to those in the family who
  primarily look at the business through a commercial lens. Land, more than just a business,
  represents the core essence of individual identity to those who spend their careers working in a
  land-based family business. The fact that many land-based business owners consider themselves
  first and foremost farmers sometimes conflicts with any additional business that may have
  developed out of the original core business. For example, a vineyard is a straightforward
  agribusiness—a farm. But, a grape-growing family that produces a successful wine will likely move
  the business from strictly agribusiness into winemaking, which also means branding, distribution,
  and sales. While the fundamental agribusiness is still the core business, the shift to a winemaking
  business may leave the original "farmer" on the outside of the power circle, with little knowledge or
  expertise to manage effectively. This phenomenon challenges not only expectations of family
  leadership succession, but the core identity of the family: "Are we primarily a farming family or a
  winemaking and marketing family?"
• Generational transition of land-based family businesses can be particularly challenging, as capital
  is usually tied up in the hard assets of the land itself and only becomes liquid upon the sale of this
  asset. Without careful preparation, discipline, and planning, the financial burden placed on the next
  generation to pay taxes, fund the security of the retiring generation, and continue to operate often
  works against the hope of keeping the business in family hands.
• In addition, the limited return on operations compared to the market value of the land can be a
  significant source of stress within the ownership group. Owners who do not live and work on the
  land may feel that the only way they could get a return on their investment and meet the
  commitments of transition would be to sell some or all of the land. Operating owners find such a
  prospect highly threatening, not just because of diminished access to operating assets and capital
  represented by a partial sale, but because their identity, their home, and their way of life may be at
  risk.

While many land-based businesses are often unable to pay significant dividends, many are uniquely able
to provide psychological dividends, e.g., the opportunity to participate (or just be on hand) during harvest,
access to the land for recreational or retreat purposes, special residences or lodges for family visitors,
equipment on hand that goes beyond the needs of the business (fun), and opportunities to engage in
ecological projects. Land-based businesses provide a special opportunity for all owners to participate as
stewards and to remain highly connected to the business. A holiday dinner attended by the extended
family on land that has been in the family for generations can generate commitment that other business
enterprises would find difficult to match.

Even with the advantage held by land-based family firms of providing psychological benefits to
shareholders, the firms are just as susceptible to failure due to unmanaged conflict as their counterparts
in other industries. As we have suggested, the sources of conflict in land-based businesses may be
somewhat unique, but the need to invest in preventing destructive conflict and resolving conflicts that
emerge is the same as in all family firms. Advice frequently seen in issues of The Family Business Advisor®
on maintaining open lines of communication would apply just as much to land-based businesses as to
those in other industries. In addition, readers may be interested to know that there are some resources
available that are specifically aimed at the needs of land-based businesses. A good one with which we
are familiar is the Heirloom Scale developed by Mark Green for the Ties to the Land Project at Oregon
State University, which helps family members have frank conversations with one another about the nature
of their emotional attachment to any given piece of land. For more information on this excellent tool,
please refer to the following website: (http://www.familybusinessonline.org)

Articles purchased or downloaded from Family Business Consulting Group® are designed to provide
general information and are not intended to provide specific legal, accounting, tax or other professional
advice. Since your individual situation may present special circumstances or complexities not addressed in
this article and laws and regulations may change, you should consult your professional advisors for
assistance with respect to any matter discussed in this article. Family Business Consulting Group®, its
editors and contributors shall have no responsibility for any actions or inactions made in reliance upon
information contained in this article. Articles are based on experience on real family businesses. However,
names and other identifying characteristics may be changed to protect privacy.

Family businesses can drive economic recovery with some help

by Dr. Mark Green

AS lawmakers struggle to reverse the worst American economic recession in decades, they are pouring resources into corporate America through corporate bailouts, new taxes and stimulus packages. Unfortunately, these efforts ignore the fact that family businesses are the true foundation of our economy and hold the keys for our nation's economic recovery. For true economic growth, lawmakers must change tactics and actively support this forgotten sector of our economy.

Family business assistance programs are suffering. There is an immediate need for government and society to send a clear message in support of family businesses, their impact on the business community, and the economy as a whole. Unless and until this happens, family businesses will exercise caution when investing in new jobs, equipment and plants, thereby slowing down our nation's economic recovery.

Family-owned and -operated businesses represent more than 70 percent of all U.S. businesses and approximately 40 percent of the Fortune 500. They built this nation's economy and they will be instrumental in transforming the current economic climate. With personal and professional dedication rarely witnessed in corporations, family businesses have what is needed to get our nation back on track. They stimulate the economy by hiring locally, buying locally, and giving back to local communities.

The Pacific Northwest is fortunate to have many such family-owned businesses, including Bartell Drugs, Columbia Sportswear, Les Schwab, Nike, Nordstrom and Reser's Fine Foods.

Family businesses possess five unique qualities that are sorely needed to get our economy back on track.

First, family businesses are guided by a long-term outlook that protects the interests of past and future generations. Instead of seeking quick money, traditional family businesses seek sustainable, long-lasting business models that can bring in a steady stream of revenue for succeeding generations.

Second, many of the strategies developed and implemented by family businesses are contrary to the widely accepted business practices of corporate America. For example, family businesses have a lower cost of capital and lower administrative costs, because they tend to have lower CEO compensation and less investment in financial systems and controls. In addition, family-owned businesses are better able to take advantage of opportunities that lead to quick innovation, whereas hierarchy and protocol often interfere with the ability of large corporations to seize new opportunities.

Third, family-business owners tend to be fiercely independent, relying on their own ideas, strengths and resources. They rarely seek external financial assistance or bailouts, and the informal investments of friends and family in startup companies far outweigh formal investment.

According to a 2002 study by the Kauffman Center for Entrepreneurial Leadership and Babson College, venture capitalists had provided less than one-quarter of the equity for new ventures launched since the mid-1990s. The independent nature of family businesses leads to sustainable business models.

Fourth, within family businesses, each new generation observes the dedication and commitment required for business success. Members of the succeeding generation incorporate these values into their own work. Most family businesses also highly value their communities, supporting philanthropic activities and volunteering their time far more than their corporate counterparts.

Finally, family businesses excel at striking the right balance. They struggle to weigh the needs of the family against those of the business. Inevitably, they accept that it is impossible to strike the perfect balance, instead finding solutions that favor one set of interests for a period of time before that balance shifts. In this way, they remain flexible enough to adapt to changing economic conditions.

Because of these five unique qualities, the return on investments in family businesses will be much greater than the return on similar investments in corporate America. However, for this to become a reality, family businesses need the confidence and reassurance of a solid government commitment to their success.

Mark T. Green is a principal of The Family Business Consulting Group, Inc., and a clinical professor in family business at the Seattle University Albers School of Business and Economics.