If you’ve ever watched QVC, you probably know about Honora, the company that pioneered marketing high-quality pearls to the masses. The growth of the 64-year-old family business is legend in the gem industry. How did it get there?
A business analyst might cite Honora’s early alliance with China to bring freshwater pearls to the West, its 20-year branding campaign, or its total focus on freshwater pearls, even to the point of risking a third of its revenues.
Those are all great aspects of Honora’s story, but ask CEO Joel Schechter, whose father started the business, and he’ll tell you the real competitive advantage: family. Schechter’s sons, sisters and other family members work in the business.
In a recent interview, Schechter shared some benefits to running a family business.
1. Speed. “In a family business, we can think about something in the morning and begin working on it in the afternoon,” says Schechter. After all, the family is a natural team. And in the pearl business, where new designs must get to market fast, speed is everything.
2. Solidarity. Competing agendas make for harsh office politics. Fights happen in the family, too, but when the goal is to help the family business win, turf battles diminish. “We’re much faster than companies that have to go through a more politicized process of getting things done.”
3. Nature plus nurture. Some of us are just born to entrepreneurial risk-taking — so it’s likely our kids are, too. When kids grow up in the business, they absorb the skills it takes to succeed. Schechter began working in the family business as a boy. “I can tell you as a son of the owner, you really get to know the life that your parent leads. You really understand the trials and tribulations, and what it took them to make a living for you.” Icing on the cake: Kids can see firsthand the work it takes to win at business.
4. Authenticity. Family is the place where you can let things fly. “We laugh more here,” says Schechter. “And we yell more here. Sometimes family members can get to be more emotional with you than non-family, but we wouldn’t have it any other way.” The ability to be fearlessly and emotionally honest can help a family business thrive.
5. Trust. Trust is essential in all business, but especially so in a business where trade secrets are make-or-break. “For us, there’s a very high level of trust among family members. And we can talk to each other very freely and openly.”
6. Control. Family businesses control their fate. “We’ve looked at different scenarios for investors. And it always kind of comes back to the same thing: Do we want to lose control of this family business, of the specialness that we have of working with each other on a day-to-day basis? It’s nice for me as a father to work with my sons.”
7. Next-gen ingenuity. Companies can lose their competitive edge when leaders lose touch with the youth market. A smart family business keeps its edge naturally when it brings in the next generation. At age 30, Schechter’s son Michael has become the industry guru on social networking. “My son communicates with hundreds of thousands of people at the same time. I’m very lucky to have somebody who’s really at the forefront.”
To be sure, working with family has its challenges. Schechter and his father argued so much that he quit the business three times in his first year and a half.
Drawing from his experience, Schechter has strong advice for other owners who bring the family in: First, expect your family members to work twice as hard as other employees. Otherwise, they won’t earn employee respect. Second, the family business isn’t the kitchen table. Never fight in front of the staff. And third, the head of the company has to exert authority with family — and all employees must respect their leader’s authority (family or not).
All challenges aside, “family values” are taking on new meaning in today’s economy. If you’re able to recognize that value and work together for the common good, family can be your biggest competitive advantage.