Episode 5: Preparing Future Leaders | Fostering NextGen Innovation | Understanding the Generation Gap

Guests

Lisa Hirsh

Lisa Hirsh is president, CEO and majority owner of Accurate Box Company, a fourth-generation family business based in Paterson, N.J., that manufactures corrugated packaging featuring “high graphics” that include up to seven colors. Accurate Box serves a range of industries, such as food and beverage companies and the auto aftermarket. The company's top customers include Kellogg's, Keurig Green Mountain, Worthington Industries (a steel manufacturer), PepsiCo and Danone. Its products are used in e-commerce and for packaging of wares offered in big-box stores, to name a couple of examples.

Mark Schlossman

Mark Schlossman is executive vice president of sales and marketing at Accurate Box Company.

Samara Ronkowitz

Samara Ronkowitz is director of sales and marketing at Accurate Box Company.

Meganne Wecker

Meganne Wecker is the third-generation president and chief creative officer of Chicago-based Skyline Furniture and founder of its sister brand Cloth & Company.

Laura Pearson

Laura Pearson is Deloitte Private’s US Family Enterprise Leader and a tax partner specializing in privately held, middle-market companies including family enterprises and family offices in a variety of industries including manufacturing, real estate and asset management.

Sponsored by

Here's a summary of the podcast by interview, with key takeaways for each section:

1. Interview with Laura Pearson (Deloitte Private)

Summary:
Laura Pearson discusses a Deloitte survey exploring perceptions of family business operations and succession planning across generations. The survey reveals generational differences in views on succession, risk assessment, and participation levels, highlighting a disconnect in how involved the next-gen feels versus how involved current leaders perceive them to be. Additionally, next-gens are more open to selling or altering ownership stakes, while current leaders largely assume succession will retain family ownership. Both generations align on the importance of digital transformation, but current leaders are more focused on internal risks such as hiring, climate change, and capital structure.

Key Takeaways:

• Generational Disconnect: There's a gap in perceived involvement; next-gens often feel less included than their predecessors believe.
• Succession and Ownership Views: Next-gens may lean toward selling or altering ownership more than current leaders expect.
• Shared Focus on Technology: Both groups recognize technology as a core business need.
• Risk Perspectives Differ: Current leaders are more risk-sensitive regarding staffing, climate, and financial structure, likely due to their direct experience.

2. Interview with Meganne Wecker (Skyline Furniture and Cloth & Company)

Summary:
Meganne Wecker shares her journey as a third-generation leader of Skyline Furniture. Encouraged by her father to experiment, she capitalized on the rise of e-commerce and launched Cloth & Company, leveraging digital printing for quick, customized textile designs. This innovation allowed Skyline Furniture to stand out in the market. Wecker emphasizes the importance of focusing on core strengths, being self-funded, and maintaining resilience through smart technology investments.

Key Takeaways:

• Empowerment Leads to Innovation: Meganne's father gave her freedom to explore new areas, which led to successful digital transformation initiatives.
• Focused Growth and Self-Funding: Remaining true to core strengths and avoiding outside funding kept the company stable and agile.
• Technology as a Differentiator: Cloth & Company's use of digital printing showcases how technology can drive market differentiation.
• Collaborative Vendor Relationships: Building partnerships with other family businesses fosters mutual growth and innovation.

3. Interview with Lisa Hirsh, Mark Schlossman, and Samara Ronkowitz (Accurate Box Company)

Summary:
Lisa Hirsh, her husband Mark Schlossman, and their daughter Samara Ronkowitz of Accurate Box Company discuss their multigenerational journey and plans to transition leadership to the fourth generation. The family has taken a gradual approach to succession, which helps ensure continuity for employees, customers, and banking partners. They focus on reinvesting in infrastructure and training to stay competitive and committed to the founder's original values, which helps maintain a family culture. This approach also ensures a smooth leadership handover that preserves relationships with longstanding vendors and customers.

Key Takeaways:

• Gradual Succession Planning: Phased transitions help the incoming generation feel prepared and assure stakeholders.
• Preserving Founder's Values: Continued reinvestment in infrastructure and training reflects the family's commitment to original principles.
• Internal and External Relationship Building: Bringing the next-gen into vendor and client relationships creates continuity and trust.
• Blended Skills in Leadership: Samara has embraced both marketing and operational roles, preparing her to oversee a balanced approach to future leadership.

Overall Key Takeaways:

• Clear Communication is Vital: Across interviews, communication emerges as essential for bridging generational perspectives and ensuring smooth transitions.
• Empowerment Fosters Innovation: Allowing next-gens to explore new channels and technology strengthens business agility.
• Technology and Core Values Coexist: Embracing tech advancements while preserving foundational values can balance growth with heritage.
• Relationship-Driven Succession: Involving the next-gen in stakeholder relationships—internally and externally—builds a seamless succession path that respects past partnerships.

Podcast Intro
Zack Needles:
This episode is brought to you by Deloitte Private, serving family-owned companies, family offices, and privately held businesses, and advising them on a range of issues, from growth, talent, and succession to the potential and perils of AI.

Zack Needles:
My father was really encouraging. He said, “Here's a new channel. You're finding some wins here, so go for it.” And he really gave me the space to try things that ultimately ended up being very successful.

That was Meganne Wecker, third-generation President and Chief Creative Officer of Chicago-based Skyline Furniture and founder of its sister brand, Cloth & Company. Welcome to the Family Business Business Family Podcast. I'm Zack Needles, Editor in Chief of Family Business Magazine. We're fresh off our Transitions Fall 2024 event. Thank you to everyone who attended; it was great to see you all. In this episode, we're talking about generational transitions. We'll hear from two family businesses that have taken intentional approaches to passing the generational torch.

But first, I sit down with Laura Pearson, U.S. Family Enterprise Leader at Deloitte Private, to discuss findings from a recent survey shedding light on the generational perspectives within family enterprises. Before we dive in, a reminder that support for today's show comes from Deloitte Private. Their passion for innovation creates powerful opportunities as they advise family businesses on ways to stay ahead of change, leverage technology to drive progress, and transform disruption into multi-generational value. Connect with them at deloitte.com/us/private.

Interview with Laura Pearson
Zack Needles:
Hi, Laura. Thanks for joining me today.

Laura Pearson:
Hi, Zack. Happy to be here.

Zack Needles:
Let's start with the survey's objective. Can you explain that a bit?

Laura Pearson:
Absolutely. The survey focuses on U.S. family-owned private businesses. Our primary objective was to compare perceptions of current leaders with the next generation of family members poised to take over leadership roles.

Zack Needles:
Were there any findings that stood out or surprised you?

Laura Pearson:
Yes, definitely. There were noticeable disparities in how generations perceive each other, especially concerning succession planning, risk assessment, and levels of participation in the business. Current generation leaders are more concerned about hiring, climate change's impact on operations, and capital structure. This may stem from differences in experience and career paths. When asked about next-gen participation in decision-making, just 15% of next-gens felt they had a high level of participation. In contrast, nearly twice that number of current leaders believed next-gens were very involved. This disconnect grows when we look at future plans. For instance, 8% of the current generation expected successors might sell part or all of their business interests, but 20% of next-gens expressed potential interest in changing ownership structures.

Zack Needles:
Interesting. Let's clarify: How do you define “next-gen”?

Laura Pearson:
Good question. We define “next-gen” as the next generation of decision-makers over age 27 who are actively working within the family enterprise and are expected to take over leadership roles.

Zack Needles:
There seems to be a significant difference in how well each generation feels prepared for succession. What can each side do to bridge that gap?

Laura Pearson:
The survey shows that current and next-gen members have differing views on succession readiness. Around 25% of the current generation strongly agreed their succession plans would ensure smooth operations if a family member moved on. To close the communication gap, the current generation can help instill confidence by sharing insights on succession issues and building understanding.

Zack Needles:
Did any areas reveal alignment between the generations?

Laura Pearson:
Yes, both generations agree on the importance of technology and digital transformation for future success. About 46% of both current and next-gens identified this as a core competency.

Zack Needles:
What unique experiences does the next-gen bring to the table?

Laura Pearson:
The next-gen often gains experience outside the family business, which allows them to introduce fresh perspectives. For instance, while nearly half of the current generation has only worked within their family business, only 29% of next-gen employees can say the same.

Zack Needles:
Why do current leaders perceive higher risks in areas like hiring, climate change, and capital structure?

Laura Pearson:
Our survey indicates that current leaders generally perceive greater risks in these areas. For example, the next-gen might be more comfortable with remote or hybrid work, which broadens recruiting options. They also might not fully appreciate certain regulatory or capital structure risks the current generation is more familiar with.

Zack Needles:
Where are the greatest concerns in succession planning?

Laura Pearson:
Interest in succession planning was the most significant risk, with 63% of respondents highlighting it. Strong independent boards can be valuable, providing alignment and preparing organizations for smoother transitions.

Zack Needles:
Thank you, Laura. Improved communication sounds crucial for many of these organizations.

Laura Pearson:
Thank you, Zack. Happy to be here.

Interview with Meganne Wecker
Zack Needles:
Now let's turn to our interview with Meganne Wecker of Skyline Furniture. Meganne, your story highlights the entrepreneurial spirit within family businesses. How did you start in the family business, and how did your father support that journey?

Meganne Wecker:
Thanks for having me, Zack. I'm grateful to have been raised in a family of entrepreneurs. My grandfather started Skyline Furniture after WWII, following in the footsteps of my great-grandfather, who had a furniture factory in Chicago. My father later joined, adding an import division. I came in during the early 2000s, drawn to the import side of the business, which allowed me to learn international business. My father encouraged me to explore and innovate. I ended up designing furniture for e-commerce just as it was emerging as a new retail channel, which was a pivotal step for us.

Zack Needles:
What did you learn from that experience about balancing growth and risk?

Meganne Wecker:
I learned to stay true to our core strengths and avoid trying to be everything to everyone. We remained self-funded, which meant being very strategic with investments. We also embraced technology to become more efficient, allowing us to scale up or down as needed without layoffs.

Zack Needles:
In 2016, you launched Cloth & Company. How did that come about?

Meganne Wecker:
We always looked to the fashion industry for inspiration. When digital printing technology became viable for upholstery, we realized it would transform our industry. I founded Cloth & Company as our own design voice and used digital printing to create custom, eco-friendly textiles quickly.

Zack Needles:
Working with other multigenerational family businesses can be complex. How do you handle that?

Meganne Wecker:
Relationships are critical. Many of our vendors are also family businesses we've worked with for generations. Innovations like digital printing could have been seen as competition, but instead, we found new ways to collaborate and evolve together.

Interview with Accurate Box Company Family
Zack Needles:
Joining me now is Lisa Hirsh, President and CEO of Accurate Box Company, her husband Mark Schlossman, and their daughter Samara Ronkowitz, Director of Sales and Marketing. Accurate Box is celebrating its 80th anniversary and is preparing the fourth generation to take over. Lisa, can you share the company's history?

Lisa Hirsh:
Sure. My grandfather founded the business in 1944 in Newark, New Jersey. My father joined at age 20 to help it grow. My husband and I joined in the early 1980s. After running it together for about 25 years, we're now preparing Samara for leadership, which we aim to transition gradually over the next few years.

Zack Needles:
Samara, what's it been like to prepare for leadership?

Samara Ronkowitz:
I started in sales and marketing 11 years ago. We're planning a 3-to-5-year transition, where I'm gradually taking on more responsibilities. It's important to me to feel ready when the time comes.

Zack Needles:
How do you maintain the company's original values across generations?

Samara Ronkowitz:
Reinvesting in the business is one way we honor our heritage. We continuously invest in infrastructure, new equipment, and training, which reflects my grandfather's values.

Mark Schlossman:
We also involve Samara in relationships with our customers, vendors, and bankers to ensure they're comfortable with the transition.

Lisa Hirsh:
Exactly. Long, smooth transitions are key. Sudden handoffs can lead to unnecessary challenges.

Zack Needles:
Thank you all for sharing. It sounds like your approach to continuity and relationships is a great model for family businesses.

Podcast Outro
Zack Needles:
That's it for this episode of the Family Business Business Family Podcast. We welcome your feedback, so please drop me a line at cneedles@familybusinessmagazine.com. Talk to you soon.