“Shirtsleeves to shirtsleeves in three generations” was Sam Bronfman’s proverbial saying in early 20th century, meaning that wealth gained in one generation will be lost by the third. Is this statement true? In most cases that we read of today, regrettably, it is. Why is this the case? To better understand, a look at the past is important and necessary.
Being a first-generation North American, most of the people I know, grew up with and deal with are like me: they come from parents who left their countries where opportunities were few, and so set out to seek a better world — a better place in the promised land.
Immigrants poured into New York with Lady Liberty looking on and holding all the promises they aspired to attain: “Give me your tired, your poor/Your huddled masses yearning to breathe free.“ And so it was. Masses of people left the only world they knew, all in the name of wanting a better life for themselves and their families.
Upon the painful and singular experience of not knowing the language of their new home, they set out to create this new horizon with only a promise to their loved ones that they would send for them. The hunger and the want for this to happen allowed for most of the families left behind to be proxied over to join the one person who had already begun to pave the way for a better tomorrow.
Neighborhoods were built, businesses were imagined and materialized; this was a time of growth and great prosperity. The language in business was simple: honor, respect and loyalty were the currency back then, and it worked. Everyone had the same goal: to build something, to leave a legacy. Armed with the value system and moral code of their homelands, these natural-born leaders had an innate talent for taking initiative and giving direction to others, as their vision to conquer and build was so clear, no one could deter them or what they had to offer the world. That’s called conviction.
The hope these captains of industry had was to teach these skills to their offspring, who, by now, were already reaping the benefits of a charmed life.
The problem was that this next generation was not witness to the how’s of traversing and conquering uncharted territory, of risking it all when you have nothing to lose. The hard skills their parents had to apply to succeed weren’t even a consideration for this first generation of Americans who would grow up to become second-generation business owners.
So, what kind of leaders do we have today?
The circumstances needed to engage in business are different for today’s generation of leaders. Being well-educated? Check. Being well-travelled? Check. Having the right connections? Check. So, what does one do when the road paved by our parents is ready to be seized? All too often we hear, “If only their parents were still around, things would be so much better.”
Here’s what today’s leaders must keep in mind to effectively transition into true leadership and ensure longevity and continuity.
1. Connections and history matter. What can propel your business into the future and secure its place is, in part, how you use the connections that helped build it along the way. Don’t think that they don’t matter anymore because you are coming in with brand-new ideas learned in school or attending the latest COMDEX expo. The name that your parents built through sweat and tears bears an importance that you cannot buy. It is so worth it to plan for continuity — it shows you have reverence for the past while assuming your place for the future.
2. Merge the old with the new. Your father was able to build a legacy because he had honor and respect, showing loyalty to those who deserved it and, in turn, receiving the same. Bring forward these time-honored values and people will notice you more. It’s about standing out, not standing by.
3. Keep your word. Contracts come and go, and the letter of the law is translated in more ways than there are lawyers, but your word is unbinding. What you promise, no one can deny it — not even you.
4. Don’t bargain down your suppliers. The days of trying to get something for nothing are gone. Reward good work with good pay. A fair exchange of services paid for services rendered should always take place. You’re not getting away with having paid less for something; you’re just devaluing the opportunities your supplier has worked so hard to access. Remember, someday someone will do it to you.
5. Pay on time. If an invoice received gives you a deadline for payment, honor it. Do not go beyond the terms stated. Your supplier has spent time, labor and supplies that have already been paid for and is dependent on you to keep his business going. Even if you guarantee repeat business, it’s the business he’s doing with you today that matters.
Some of us grew up witnessing our parents’ struggles and understood the importance of hard work. Unfortunately, others did not. This is a call to action for those who, although now live a more comfortable lifestyle, should try to remember a childhood filled with frugality and sacrifice and what earning a dollar meant back then. These are some of the more important tools to hold onto if you’re ascending into the family business. Remember, what is old becomes new again. So, here’s your chance to make it count.