Submitted by Dan Beenken, director of the University of Northern Iowa Family Business Center

Tony Simmons, former president and CEO of McIlhenny Co., showed up in Des Moines and “kicked it up a notch” at the second annual Iowa Family Business Conference, presented by the University of Northern Iowa Family Business Center. That was our mantra for the event, which featured a keynote address from Simmons about his time growing up in and leading McIlhenny Co., the makers of Tabasco Pepper Sauce. He might be from Avery Island, La., but his story focused on what we know all too well in Iowa: Family businesses are different.

Challenges family businesses face

Our team at the UNI FBC strives to show family-owned businesses that they are not alone in their experiences and in their struggles. They have chosen to work with family members, whether it’s been five years or over 100. What they might not have anticipated is how much hard work and collaboration it takes on the family side — not just the business side — to be successful.

Only 30% of family-owned businesses survive the transition to the second generation. Moving from a business founder to multiple siblings or cousins as owners of a business introduces challenges and complexity that most families struggle with. Our center serves as a place for them to learn from each other, develop best practices and interact with our consulting services geared toward their unique issues.

The Iowa Family Business Conference is designed to tackle a number of these challenges in a one-day event so families can learn, share and spend time with their family members away from the chaos of the normal work environment. It’s an opportunity to hear that you are not alone, that other families face these same issues and learn from each other how to handle them (and in some cases, how not to handle them).

Generational succession planning is one of those key challenges, if not the most important. Some transitions are well prepared while others may happen out of our control. Hearing from Iowa families about how they have navigated their generational leadership and ownership succession plans is incredibly beneficial. The struggle is real, as they say, in terms of one generation letting go and a new generation taking control. The Comito family of Capital City Fruit provided an amazing lens to see how one family has handled this. We had them on a panel to discuss their transition plan and what they have learned along the way.

A successful transition involves current leadership stepping away, and just as important is developing the next generation to grab those reins and run the company. Heidi Vermeer-Quist of VQ Consult, Brooke Stutsman of Stutsman Inc., and Joe Riley of Riley Resource Group were part of a panel to share their experiences and advice as part of the next generation of leaders for their family businesses. They spoke of the need for proactive development, open communication and an ability to work in all facets of the business as ways to bring along the next generation.

Our keynote speaker, Tony Simmons, is a fifth-generation leader of the iconic Tabasco Pepper Sauce maker, McIlhenny Co. A key takeaway for me was how intentional their family has been to keep alive the story and legacy of the founder of their firm. When asked how a business survives to the fifth, sixth and seventh generations of ownership, he had such a simple yet powerful thought on that: You have to take care of the business, first and foremost. The family has to gather around the mantra that what is good for the business is good for the family.

Another important idea for our business families is to realize that stewardship must replace ownership as the lens to view the business. When you think about it that way and consider yourself a caretaker rather than an owner for your family 25 and 50 years beyond yourself, it absolutely changes how you lead your company.

We also featured a few sessions from service providers who serve as founding partners of the UNI FBC. Representatives from RSM presented on family office formation and operation; BrownWinick Law Firm presented on key issues for family ownership transfer and estate planning; and Foster Group presented on preparing the next generation for leadership from a young age.

While we can talk to these families all day, the real value comes from them learning from each other. This conference — like all of our events — had time built in for networking. A lot of the panels were interactive so audience members could ask the questions near and dear to their hearts. And we hand-selected panelists who could speak from every experience a family business might encounter — the good and bad, retiring and incoming, large and small, urban and rural.

Families contribute to the overall Iowa economy

Family businesses are the engine for Iowa’s rural and urban economies. Based on national statistics, they drive 78% of all new job creation and are responsible for almost 55% of GDP. In part because of their important positioning in the state economy, we want to help these families tackle tough challenges and help them stay sustainable.

Family ownership of our Iowa companies ensures local ownership, which means decision-making is made with a local lens and a long-term commitment. As I think about some of the great family-owned companies that have made some of our communities so strong and vibrant, the opposite is often true when that local Iowa family ownership ceases. Why is this?

For more information on the UNI FBC, to register for upcoming events or learn about membership, visit unifamilybusinesscenter.com.

A few takeaways from attendees

Ryan Boyington, partner at Storey Kenworthy

“We are all very different companies from a perspective of what we do every day, but we are incredibly similar on the challenges we face as family businesses. The UNI Family Business Conference was a forum that allowed us to discuss and share our unique experiences, and that is very powerful.”

Shana Craven, regional vice president of operations at Kinseth Hospitality Cos.

“My family and I really enjoyed attending UNI’s Family Business Conference. Family businesses are very unique and very complicated – only other family business organizations would understand the complex nature of our businesses. While each family that attended the conference is involved in a different type of business, each of us have a lot in common. I appreciated the opportunity to network with different families – some who are in the same planning stages and others who are just beginning and even some who have well-constructed family business structures that are several generations old. The content touched on several subjects, from teaching our children about family business at a young age to retirement – there was content for all families regardless if they were first generation or fifth generation. Listening to the Tabasco family story and history was very inspiring.”

Leonardo Etcheto, CEO at Nutriom

“It stood out how many people are dealing with the same basic issues concerning family business. It was great to hear how others handle the peculiarities of having family and business intermixed. It was also a good reminder that there is a lot of help and resources available if you seek them out.”