In the early stages of their business’s development, entrepreneurs face a kaleidoscope of choices. Their product or service idea can take on a variety of forms. Their organizational structure is uncertain as they try to look into the future. They see a multitude of colorful patterns that seem to change with every rotational twist.
How can the entrepreneur select from all these “kaleidoscopic patterns” a design that can be woven into a meaningful tapestry that achieves lasting business success? More importantly, how does this creative design become a tapestry of heirloom quality that can continue to expand, evolve, and be sustainable throughout future generations?
Likewise during these early stages, most entrepreneurs are not thinking generationally. They are thinking about the coming weeks, the coming months, the coming year. They are thinking about how to complete the product or service development, how to reach customers, how to acquire funding, how to generate cash flow, and oftentimes how to achieve an exit.
The typical model presented to entrepreneurs as they visualize the path forward for their start-ups is funding from family and friends, seed funding from angel investors, surviving the so-called Valley of Death, followed by institutional funding from venture capitalists (an “A” round), growth, funding from private equity, and, ultimately, the exit: a liquidity event.
This exit comes in many forms: an IPO, a strategic acquisition by an industry leader, or a sale to another private equity firm.
But the seeds for building an enduring culture or multigenerational heritage are sown in the early years of the business, identifying and creating its own unique DNA. The decisions that entrepreneurs make during these early years, although they feel short term, will be the beginning of a set of business processes woven together to create an organizational future—if only for a few years—until a long-term vision is created.
My mother and father started our business in 1949 with two sewing machines in the basement of our home. Their first contract was sewing lace around baby doll diapers. My father’s entrepreneurial vision was simply to acquire enough “cut-and-sew” contracts to generate money to feed his family.
My parents’ longer-term vision was to build a family business where their five children could build their careers. My mother and father were children of the Depression. In their minds, the most valuable legacy parents could leave their children would be a job opportunity that grew into a stable, long-term career.
My father, a high school graduate and a World War II B-24 pilot, had a very curious and innovative mind. His creative thinking was always exploring a kaleidoscope of design choices, experimenting with new and unique products. This curiosity, innovative thinking, and persistence wove a variety of choices together, ultimately creating one of the leading industrial fabrics businesses in North America. His “lace around baby doll diapers” evolved into colorful vinyl-coated industrial fabrics used for a variety of heavy-duty applications such as truck tarps, architectural and environmental fabrics, single-ply membrane roofing, and fabrics for military applications. Today, that company, Seaman Corporation, is a US-based manufacturing business successfully exporting industrial fabrics into China.
I am the oldest of five children, and we all grew up in the business. We saw the struggles, the successes, the failures, and the cash flow challenges that my mother and father experienced every day. I watched my father mix formulations in my mother’s kitchen. Then he put those formulations into our oven to cure the compounds. Afterward he placed the thin layers of cured compounds in the freezer to see if they remained flexible at cold temperatures. Our kitchen became his homegrown chemical compounding laboratory.
With five children to feed and a struggling start-up business, my parents also farmed our forty-acre homesite. My two brothers and two sisters and I learned a great deal about planting and harvesting vegetables each year as well as raising pigs and chickens for the freezer to feed the family year-round. Our annual chores helped develop our family’s work ethic and made us mindful of the sacrifices and work it takes to be committed to a fledgling business endeavor.
Very little strategic planning was done in support of my father’s business, certainly no strategic planning around multigenerational success for this business. Nonethless, my parents did have a vision: Their children would have a business where they could develop their careers. Implicit in this vision were multigenerational hopes and aspirations—for the children of parents who grew up during the Depression and witnessed the challenges of job scarcity and unemployment.
When I turned fifteen, my summer work experience was to assist on the primitive coating lines to help produce the products that provided cash flow to the business and our family. Each summer thereafter was spent in the factory until I went off to college; my summer employment then moved into the office—generally the accounting department. So, I shared real-world work experience with my college education—instilling the principles of entrepreneurship into my academic learnings.
It was the summer of 1966. I was between my junior and senior years at Bowling Green State University. I convinced my father to allow me to go on a three-week college trip that would begin in Copenhagen, Denmark; take us to Helsinki, Finland; Leningrad and Moscow in Russia; Bucharest, Romania; Prague, Czechoslovakia; and then finish in Rome, Italy.
I was an excited, young, and naïve student who grew up in a village of four hundred in the middle of Amish country. I spent three years at a state college in northwestern Ohio. I was convinced that the Europeans we would meet on this trip would certainly envy us as Americans with all the opportunities that America had to offer.
That illusion was quickly dispelled.
Our first evening in Copenhagen, following dinner, four of us wandered through Tivoli Gardens—the city’s Central Park. We were fortunate to meet several Danish students and began talking with them. When we told them we were from America, I was surprised at their response.
“Well, how nice, but we certainly would not want to be Americans.”
“You have many benefits in your country and you're doing quite well, but you are only 250 years old. You have no history, no long-term culture.”
I was shocked. I had assumed that pride in your country, even at our young age, was measured by financial or material success, or financial opportunity. Here was someone telling me the exact opposite. What she valued as a Dane was the multigenerational, centuries-old history and culture of the homeland. GDP per capita was not part of that consideration. At the time, I did not realize that this multigenerational cultural identity could also apply to the growth and development of a family business. Financial results would not be the singular measure of business success.
Over the years, I came to recognize that these divergent cultures were evident in our paradigms about family businesses in the United States. The success of a family business is measured by its profitability and ability to sustain an ever-growing lifestyle. The motivation to pass it on to the next generation is dependent on one or more of the children willing to have their careers in the business—oftentimes primarily to support the lifestyle of the next generation. If there is no one in the next generation who wants to work in the business, then the obvious exit strategy is to harvest it and pocket the money.
The experience I gained from developing and growing our family business helped me discover other entrepreneurship business models that support multigenerational sustainability by stewarding the culture and heritage of the family business in addition to remaining focused on financial results. This journey is the essence of A Vibrant Vision.