Successful successions in family business

All truly successful businesses share a few key characteristics, such as product knowledge, a committed workforce, strong leadership and financial understanding. Family businesses have to embody these traits while simultaneously managing family dynamics and planning for succession from one generation to the next.

John C. Koenig founded the Botkins Hardware store in Ohio in 1904. His three sons, Emerson, Bill and John, purchased it from him almost 40 years later. They grew the business into Koenig Equipment, Inc., and Emerson’s five children later joined the company and continued to expand it. One of the five, Ray Koenig, led the company through substantial growth and industry leadership. Aaron Koenig, Ray’s nephew, is now the company leader. He visited the UNC Kenan-Flagler Family Enterprise Center to speak with a class about the keys to successful family business operations and smooth succession.

Importance of a visionary leader

Aaron spoke extensively about the stellar leadership of his uncle, Ray Koenig. He emphasized the importance of a truly visionary leader who embodies the company spirit. Ray consistently put the needs of the business first – he never was interested in gaining individual wealth. Now that Aaron is at the helm of the business, he is working to mirror that same mindset and, in doing so, has become an effective replacement for Ray. Aaron’s passion for the business has facilitated a smooth transition from Ray’s leadership to his.

Keep the family in the family business

Aaron reflected with pride that even the non-employee, non-owner members of the Koenig family refer to the business as “our” business. By fostering a family-centric culture within the business and maintaining open lines of communication with all family members, Aaron has successfully kept the entire family supportive of Koenig Equipment, Inc. This constant family support and communication has made each transition from one generation to the next transparent and successful.

Aaron’s experience as the company leader and as an employee under Ray’s leadership is evidence that, with enough effort, passion and communication, a family business can overcome the obstacles to successfully transfer ownership and control from one generation to the next.

Past research has shown that lack of a shared vision and ineffective next-generation leadership are some of the top threats to a family firm’s long-term success. Research by Steve Miller, a strategy and entrepreneurship professor and co-founder of the UNC Kenan-Flagler Family Enterprise Center, shows that those two factors are also highly related.

By Cooper Biersach (BA ’91, MBA/JD ’96), co-founder and director of the Family Enterprise Center

The Family Enterprise Center prepares next generation family business students for leadership and ownership in family firms.