Posted in News Story
Georgetown graduates reveal the rewards and challenges of joining the family business.
By Melanie D.G. Kaplan
Whether business takes place in a barn or a boardroom, when it involves your family, it gets personal. For some recent Georgetown McDonough graduates, the decision to join their family business has yielded true benefits — for them as well as future generations.
About 35 percent of Fortune 500 companies are family controlled, according to seasoned entrepreneur and adjunct professor Melissa Bradley (B ’89), and they represent the full spectrum of American companies from small businesses to major corporations, the largest of which is Wal-Mart. The Small Business Administration reports that family businesses (there were 5.5 million in 2011) make up 64 percent of U.S. gross domestic product, generate 62 percent of the country’s employment, and account for 78 percent of all new job creation.
Technology, longer life spans, and new types of family structures have altered attitudes toward family business and created new opportunities for younger generations. But Bradley says the fundamental keys to making family businesses work remain unchanged: clear vision, solid strategic plan, succession planning, strong decision-making and governance, and performance management. Here’s how three alumni make it work.
April Bonds (MBA ’13) was the black sheep of her family. While growing up on a family farm in Saginaw, Texas, her two sisters intended to become ranchers, but Bonds wanted to be as from that world as possible. She begrudged getting up at 4 a.m. to brand cattle during spring break while her friends were going to Disney World.
So Bonds left the country. She studied abroad in Argentina. She learned to speak Spanish in Costa Rica. She even spent four years in Cabo San Lucas, Mexico, working as a wedding and event coordinator. “I would have bet someone $1 million that I was never coming back to the ranch,” she says.
That all changed when Bonds enrolled in business school and began to understand the value she could bring back to the family ranch. In each class, professors — including Arthur Dong and Elaine Romanelli — were fascinated with her background and asked her to relate business lessons to the ranch. She completed a risk management tutorial with Finance Professor Rohan Williamson, which led her to realize that her sister and father were addressing only half the risks.
When we walk into that office, we are work colleagues. But when we go into the house for lunch, we very seldom talk about business. It’s the one chance we have to be a family and not a family business.”
—April Bonds (MBA ’13)
“If someone at the ranch wasn’t good at these things or able to dedicate time to them, it would be detrimental,” Bonds says. Among her concerns: government relations, marketing, consumer education, social media, and human resources.
“The professors really opened my eyes,” she says. She returned to Bonds Ranch after graduation — anticipating it would be a temporary job — and is still there today, serving as the ranch’s operations and markets strategist and consultant. The tasks she resented as a child now fill her with pride.
The family business has grown considerably since Bonds’ grandfather purchased the ranch, a 400-head cattle operation, in 1933. Her father expanded and diversified the business and eventually acquired three other ranches. Today, the company is one of the largest cattle operations in the United States, operating in 26 Texas counties, eight states, and Canada.
Bonds says one benefit of working with her family is getting to know her father and sister in ways she never would have otherwise. They learned how to communicate and to appreciate the skills each individual brings to the business. “We know we each bring a certain value,” she says. “We each contribute something different.”
A big learning moment occurred in 2014 when Bonds’ father was hospitalized for two months. Bonds says it forced the family to identify responsibilities and to develop a backup plan. They established a chain of command so that business decisions could be made.
Bonds says her decision to return the ranch was met with some trepidation by its employees. “They remembered me as a teenager who didn’t want to be out there. It took three years to earn their respect.”
She also struggled with getting reacquainted to the farm’s layout, but Bonds says working through those challenges has been incredibly rewarding. “When we’re out there working the cattle, there’s a lot of pride knowing that this is mine.”
When Michael Thomson (MBA ’13) was a child, he knew his father worked in the publishing business because he would bring home the comics from work three weeks early. But the young Thomson knew little about the family business beyond where his dad hid the funnies (in the study). Today, his father is chairman of DC Thomson, a private, $400 million, family-run international media group, operating a global consumer business that includes one of the leading publishing houses in the United Kingdom. Michael is finance director of brightsolid, the smallest of the group’s four subsidiary companies.
We’ve got to be a growing and profitable company, but I want to keep the values of our family, which is such an important part of our community.”
—Michael Thomson (MBA ’13)
Thomson began his career at PricewaterhouseCoopers in Edinburgh but always kept the family business — started by his great-great uncle in 1905 — in the back of his mind. While he was at McDonough, the print industry was undergoing radical changes, and his family’s business was facing losses for the first time in its 100-year history. Thomson vacillated between working with his family and continuing his career elsewhere; if he joined the business, he thought, what skills could he contribute? Eventually, he decided to make the leap.
“When I came back to DC Thomson, there were a few frantic conversations like, ‘Where will he add most value?’” Thomson says. The timing was right — brightsolid, which offers IT solutions to customers, had branched off from another division and left a financial director opening.
DC Thomson employs 1,500 people, including 10 family members. Today, the challenge is to advance a traditional, family company without losing what Thomson calls the family spirit.
“We’ve got to be a growing and profitable company, but I want to keep the values of our family, which is such an important part of our community,” he says. “How do we take the business forward in a way that we keep the raison d’etre of what we’re trying to do?”
Thomson says the family sometimes disagrees on the level of risk to take. “My brother’s very keen to keep the business moving quickly, but old habits die hard with my father and the risk-averse board.” The key to reaching consensus, he says, is to remove emotion from the equation and remember that these are business decisions.
Making long-term choices that affect his parents, brother, wife, and children motivates Thomson daily. If he sticks with the business for 40 years, he says, he will need to assess the decisions he makes today – whether he created a mess or a success. “I had a good upbringing, and that’s largely because of the family business,” he says. “It would be unfair of me not to be able to put in as much as I’ve taken out.”
When Tarick Gamay (B ’07) was growing up in Wisconsin, he heard stories about the projects his father was working on. “He’d come home talking so fast, so excited,” Gamay says.
Gamay’s father was a food chemist who developed, among other products, the technology to make fat-free cheese. “He would come up with crazy innovations that you wouldn’t think possible,” he says. Those innovations allowed Gamay’s father to start two companies, Gamay Foods and DreamPak.
Gamay has held various positions within the family business, and today, he is vice president of retail and contract manufacturing for DreamPak, which develops and manufactures liquid concentrates for a variety of beverage applications, such as coffee creamers and water enhancers. The company is based in Alexandria, Virginia, and employs 50 people, including Gamay’s brother (in Wisconsin) and sister (in Europe).
Business has been challenging. “We’ve gone through some really hard times as a family business, and I wonder how we’ve made it past those struggles,” Gamay says. A turning point came when he and his father met with a professor who taught Gamay’s twin brother. “He said we needed to make rules and boundaries. We’re still doing that.”
At first, I saw it as taking the easy way out. Now, I realize that it’s not what you start out with, it’s what you build.”
—Tarick Gamay (B ’07)
One of the boundaries Gamay talks most about is learning to separate work and home life. “At work, we treat each other with professionalism and expect the same,” he says. But the family leaves work at the office. “Don’t talk about business at home or on the weekends.”
Gamay has helped run DreamPak for nearly a decade, but he says it took time to shift his thinking about what it means to work in a family-owned business.
“At first, I saw it as taking the easy way out,” he says. Along the way, he learned that the bar is set higher for family members, and he strives to both succeed and earn employees’ respect. “Now, I realize that it’s not what you start out with, it’s what you build.”
As the company grows, Gamay says one of the challenges it faces is adding leadership outside the family. “In the last year, we completely changed the company, hiring a lot of new people and starting to put a board of directors in place,” he says. The family is learning how to appreciate outsiders’ perspectives. “It’s a shift in mentality.”
Most of all, Gamay enjoys looking to the future. “I have two kids,” he says. “I want this company to be something they and my nieces and nephews can take over and be part of one day.”
Published in Georgetown Business magazine, Spring 2016