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Family Business Matters       01/22 11:45

   Foster Growth for Success

   Family members are more productive when given opportunities to develop new 
skills.

By Lance Woodbury
DTN Farm Business Adviser

   Twice in the last month, I've come across the French word "terroir." 
Pronounced "tare-war," the word refers to the environment, especially the 
region, soil and climate in which a wine grape is produced. The concept is 
uniquely integrated into the marketing of wines; a Burgundy, Bordeaux or 
Champagne wine, by French law, can only come from grapes grown in the so-named 
region.

   Reflecting on the word caused me to think about the terroir of the family 
business, the environment in which family members grow to be productive 
participants in the enterprise. In what kind of family business climate and 
soil is the next generation growing? What practices nurture the development of 
successful family business participants? As I consider families who work well 
together in business, three characteristics come to mind.

   APPRECIATION FOR RESOURCES

   One of the defining characteristics of mature family business participants 
is the way they value and appreciate resources. Those resources include 
financial status as well as the family's position as owners, its reputation and 
relationships. They do not assume they are better than others or expect people 
to respect them merely because they have more, have been around a long time or 
have the right name. They have an attitude of stewardship toward the family's 
hard and soft assets. They demonstrate respect to others and seek to earn the 
respect of others with their daily behavior -- not through their family status 
or wealth.

   Although I have emphasized several kinds of resources, the best way to 
cultivate them is to consider how your family talks about wealth. Do family 
members know the size and scope of the family wealth? What responsibilities 
come with your family's position or status? What are your expectations about 
how ownership, wealth and success are demonstrated?

   SENSE OF PURPOSE

   Family members who participate in the business because they feel a great 
desire to contribute do far better than those who return because they have no 
other plans. When family members return because it is expected, because their 
parents want them home or because they cannot decide what they want to do with 
their lives, the family business to which they return will undoubtedly go 
through a later period of struggle and conflict.

   On the other hand, families who encourage their members to explore other 
careers, live in different places or experience diverse cultures all while 
keeping the door open to a potential return seem to do better. There is always 
the risk that the next generation may not return to the farm. But, if their 
calling is in another career, they will likely be happier. Encouraging the next 
generation to work and live somewhere else, and to compare and contrast their 
experiences before returning to the family business is, perhaps, the most 
practical strategy for instilling a sense of purpose in their work.

   ETHICS OF IMPROVEMENT

   "Curiosity" is mentioned in popular business literature as a key skill, 
because asking questions, understanding the reasons behind success or failure, 
and being open to new models helps businesses make the changes necessary for 
future success. Better does not always mean bigger, and improvements can be as 
much in efficiencies and processes as scale. The senior members who guide this 
energy and curiosity while offering parameters for taking risks will create 
more lasting enterprises than those who stifle changes and keep everything the 
same.

   There is no specific recipe for success in the family enterprise, but there 
are ingredients that create a favorable "terroir" and practices that set the 
stage for fruitful participation by family members. Appreciating wealth, 
finding one's calling and continuously improving the family business are three 
that will serve your family well.

   **

   Editor's Note: Write Lance Woodbury at Family Business Matters, 2204 
Lakeshore Dr., Suite 415, Birmingham, AL 35209, or email lance@agprogress.com. 


(AG)

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