Generational Impact, Pt. 1
Delicious jams, jellies, and preserves instantly come to mind when many of us hear, “with a name like Smucker’s, it has to be good.” This famous slogan has made the brand a household name. But what should really catch your attention is the unique position this company holds as one of the few privately held corporations that still has family leadership five generations after first launching. The J.M. Smucker Co is currently run by Mark T. Smucker, the great-great-grandson of the founder who launched the company in 1897. Most family businesses rarely make it past the third generation.
Smucker’s first launched its “beloved brands” in Orrville, Ohio from the back of a horse-drawn wagon. Today its diverse portfolio generates billions in revenue and hundreds of millions in profits. Despite an ever-expanding product line-up, the last name has remained consistent in the chief executive’s office —J.M. Smucker (1897-1947), his son Willard Smucker (1948-60), his son Paul Smucker (1961-87), brothers Timothy and Richard Smucker (2011-2019), and now Tim’s son, Mark Smucker. Another consistent factor throughout the history of this American success story has been a clear family commitment towards building a long-term legacy.
The Smucker’s understood early on the importance of developing a set of shared values. This is a major key when it comes to having an impact as a successful multi-generational family. Making sure that heirs are aware, engaged, and committed to shared values is crucial when preserving the success of the family enterprise from generation to generation. For over 100 years, the Mars family, among the wealthiest in the world, has also managed to build and preserve an incredibly successful family empire, with well-known brands like M&Ms, Snickers, and Pedigree. As they enter their fifth generation of family business ownership, they attribute much of their success to a commitment to their well-publicized “Five Principles”: quality, responsibility, mutuality, efficiency, and freedom. All family members, not to mention every one of their 70,000+ employees, are required to know and understand these principles which impact every decision made by the company. The family regularly discusses and engages in meetings and training revolving around the principles, ensuring that they are a foundational element driving their company’s vision and fueling longevity.
Many family-owned businesses begin with a bit of secrecy or reticence to share information. Founders often struggle to be open & transparent with the rest of the family. The sooner you can release some of that control and engage younger generations, often labeled simply G2 or G3 based on how far they are removed from the founder, the more likely it is that the family continues to hold onto the business and the potential for significance. This is another key for generational impact. It’s important to make sure that siblings and cousins are knowledgeable about key business information, agreements, processes, and major deals. Making sure that family members can read and understand business plans and financial documents allow everyone to have ownership of the ups and downs of the company. Training in how to read profit and loss statements, understanding supply chains, or how to develop pricing structures, among other business skillsets, makes it more likely that family members in G4, G5, and beyond will be ready to step in willingly when needed and add value right away.
Successful multi-generational family endeavors also share a commitment to make it about the business as early as possible. To continue having an incremental impact, eventually, wealthy families must prioritize the needs of their business above the focus on individual family member opportunities. This may require hiring more experienced, non-family talent to run the business, develop products or expand service offerings. Leadership positions for family members should not be assumed but earned. Developing professional outlooks, financial discernment, and skills in the management of large business enterprises early on reduced family member tensions as everyone will be focused on the outcome that offers maximum value.
Generative family enterprises extend their legacy when individual members develop different skill sets and business experiences outside of the core business they grow up experiencing. In addition to networks that are built, encouraging outside interests, studies, and jobs provides a broader set of insights that can be applied towards the success of the family business. Often, this is where multi-generational families begin to really shape their expanded social, relational, and spiritual capital.
At Mosaic Family Wealth, we work with multi-generational families that are hoping to establish the kind of legacy that is exemplified by the Smucker’s and the Mars family. Our team works with clients on the various aspects of managing a successful family office, from investment oversight to financial reporting, outlining steps to help you secure your long-term financial future, as well as providing insights on how to weigh important family decisions. Our experienced team can support your efforts at teaching younger generations about responsible wealth management, business competence, and dealing with expanding families and their role in the business.
Stay tuned for part two of our Generational Impact series where we will focus on specific wealth-related topics younger generations should master early on.
Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing in this content is intended to be, and you should not consider anything in this content to be, investment, accounting, tax, or legal advice. If you would like investment, accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs.
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