Is your family business entrepreneurial?




By

Charlie Rhomberg

Keep a transformative mindset that challenges the status quo


W

hen I hear the word “entrepreneur,” it triggers images of a trailblazing pioneer with a great idea, unrelenting self-belief and a tireless work ethic. The most successful of these founders become heroes, immortalized through portraits hanging on office walls and legendary stories of their grit and tenacity.

While these individuals play a central role in many family businesses, a common misconception is that entrepreneurship begins and ends with them. For multigenerational companies, this is far from the truth. Successive generations may not start a business from scratch, but a culture of entrepreneurship is essential to ensuring the company continues to evolve and grow over time.

Entrepreneurship in family businesses isn't merely about launching new ventures or introducing innovative products. It's a transformative mindset that challenges the status quo, embraces change and drives the business toward sustainable, long-term success.

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Why Entrepreneurship Matters in Family Businesses

Entrepreneurship is the lifeblood of a family business. It's the energy that allows it to adapt and thrive in a shifting landscape. This dynamism not only helps the business stay on top of changing trends but also fosters a sense of ownership and engagement among family members.

It’s tempting to stay in the comfort zone, relying on what's worked in the past. But doing so is a recipe for slow decline. In a world where markets, consumer preferences and technologies are constantly in flux, businesses need to continually innovate to maintain their relevance.

Entrepreneurship, however, isn't just a survival mechanism — it's the driving force behind growth. It empowers each generation to leave a unique imprint on the family legacy, steering the business in new directions while respecting past foundations. It also nurtures healthy competition that inspires family members to strive for constant improvement and contributes to a thriving business culture.


Establishing a Culture of Entrepreneurship

Establishing a culture of entrepreneurship doesn't happen by accident. It requires a deliberate and strategic approach, as well as a family-wide commitment to prudent risk-taking. But the rewards — in terms of business growth, family engagement and legacy preservation — can be substantial.

Encouraging entrepreneurship in a family business requires a culture of inclusivity and support. Families that frequently spar over personal or business issues are unlikely to work collaboratively and evaluate proposals based on their merit.

In order to establish an inclusive environment, the contributions of all family members need to be acknowledged and valued. Everyone (including in-laws) should also be encouraged to actively participate in shareholder meetings and family council activities, regardless of their background or skills. If it seems as if only those with relevant business experience are having their voices heard, others will be less likely to speak up, even when they have great suggestions.

Once a culture of inclusivity has been established, education becomes a top priority. One of the key traits long-standing family businesses possess is an engaged and educated shareholder base. Family shareholders don't have the same day-to-day responsibilities as employees or the same strategic responsibilities as the board of directors, but it's important that they have a solid understanding of the strategic direction and environment in which the business operates.

Learning and development initiatives can help family members get up to speed on the business. These can range from formal education programs to mentoring opportunities designed to cultivate business acumen, an understanding of the company's history and an entrepreneurial mindset. Ideally, these education initiatives will be able to meet family members where they are. Those pursuing an MBA should be able to dive into the details, while others pursuing a career outside the family business should be able to start with the basics.

Enabling involvement opportunities for younger family members, in particular, is a great way to keep the entrepreneurial spirit alive through the next generation. For example, a board observer role could be created in which a family member attends board meetings and is assigned a specific mentor on the board to help them understand how it operates. After the experience, they could present what they learned to a group within the family and suggest new ideas they might have as a result.

This program, among others, is one of the many ways we encourage a culture of entrepreneurship at Crescent Electric Supply Company.


Entrepreneurship at Crescent Electric

My personal experience with entrepreneurship in our family business has been both challenging and rewarding. As a 4G (fourth-generation member) , I've had the opportunity to be part of the entrepreneurial journey, witnessing the transformation of the business over time and contributing to its evolution as an engaged shareholder and member of the Schmid Family Council.

Crescent's transformation has presented an exciting platform for entrepreneurship, and our employees have stepped up to the plate. Being enmeshed in the day-to-day operations gives them a unique view of the business, and we've found that just as many good ideas, if not more, come from the ground up than from the top down. Needless to say, employee input has made a significant impact on the direction and execution of our transformation process.

We on the council are constantly looking for ways to spread that entrepreneurial energy to the family. I chair the Education Committee and am always looking for ways to engage younger generations. It hasn't been easy — most are spread across the country and haven't had much involvement with the company yet.

To address this challenge, we've set up as many touchpoints with the company and other family members as we can. During the pandemic, we hosted virtual gatherings where fellow 4Gs could ask questions about Crescent in a supportive atmosphere and get to know each other better. Social media has also been a great way for us to stay in touch.

But we want to go beyond the virtual and are planning an in-person 4G gathering soon. Over the course of a weekend, we'll be joined by members of the Crescent executive team who will answer questions about the company and explain to the group why their participation is integral to its long-term success. We'll also have plenty of fun activities planned to get to know each other better.

Finally, we plan on continuing to highlight how valuable our in-laws are and encourage their continued participation. We've had dozens of in-laws participate on the council and board of directors through the years, and their contributions have been invaluable to the company. We've had a lot of 4Gs get married recently, and our recruiting efforts for these new family members will continue in earnest!


Going Forward

My great-grandfather and the founder of Crescent Electric, Titus Schmid, was one of those larger-than-life entrepreneurs. The way he treated people and approached business influences Crescent's culture to this day.

Crescent wouldn't be here if it weren't for Titus, but it wouldn't have thrived for this long without the entrepreneurial efforts of his descendants. Whether it was members of the second generation expanding into new business lines or those in the third stepping up to establish a family council, constantly looking for ways to improve has been part of our secret sauce.

Entrepreneurship is a never-ending journey that goes beyond the founder. Looking ahead, our responsibility as shareholders is to pave the way for future generations to continue innovating and keep the entrepreneurial flame alive.


Charlie Rhomberg, a freelance writer, is a fourth-generation member of the Schmid family, owners of Crescent Electric Supply Company.

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About the Author(s)

Charlie Rhomberg

Charlie Rhomberg is a freelance writer and a fourth-generation member of the Schmid family, owners of Crescent Electric Supply Company.


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