Local Guru Transitions Family Businesses

Craig Aronoff grew up in Atlanta in a schmatta trade family. He recalls his father meeting Sam Walton and saying, “‘I want to shake the hand of the man who is putting me out of business.’ And he was right. Capitalism is in itself creative destruction. New things change the ways things are done, … that’s why you no longer see Jews owning businesses in small towns.”

After attending Northside High School, Aronoff went to Northwestern University, then earned his master’s degree from the University of Pennsylvania, and his doctorate from the University of Texas at Austin. As the founder of the Cox Family Enterprise Center and now professor emeritus at Kennesaw State University, he invented and implemented the membership-based, professional service provider-sponsored Family Business Forum. It’s served as a model of family business education for 150 universities worldwide.

Aronoff held the Dinos Eminent Scholar Distinguished Chair of Private Enterprise and was a professor of management in Kennesaw State’s Coles College of Business until his retirement in 2005.

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As a consultant, he has worked with hundreds of family companies, many of which are Jewish, in the U.S. and abroad. He advises them on such issues as generational transitions; managerial development; family compensation; philanthropy; and facilitating decision-making and conflict resolution.

This translates to making sure the right people are on the right bus headed to the right destination. He guides families toward speaking with one voice and understanding the responsibilities of their positions.

Aronoff said that many economies are dependent on family businesses, which don’t get the big headlines like Fortune 500 companies. He’s somewhere between a therapist, puzzle solver, actuary, and benevolent dictator. After all, what is the base nature of family ties – money, power, rivalry, competitiveness? Think of the old TV series “Dynasty” over a dinner of matzoh ball soup.

“Not so,” said Aronoff. “My approach is holistic and examines simultaneously both financial issues and family concerns. … I believe in l’dor v’dor with family values and strong business discipline.

Having worked for decades for family owned company Cox Enterprises, I recall Jim Cox Kennnedy, recite tongue and cheek, “The first generation makes the money; the second generation invests the money; and the third generation squanders it.” (Japanese proverb). Aronoff states, “And the Italians have a saying, ‘From the stalls (horse dung) to the stars, and back to the stalls again.’ … Thirty percent of family businesses, like the Cox’s fourth generation, do make a successful transition, which means that two-thirds disappear. Family firms are actually more durable than other forms of business.”

Businesses come to Aronoff because they want to successfully perpetuate. Many are in real estate. With siblings and cousins, he helps them see who has what skills and how to take out the ego. Most agree that what is important is the family’s success, and no one wants to preside over conflict. “We help them develop a board of directors separate from a family council to assure alignment and tamp down conflict. Maximizing the bottom line is not the ‘be all and end all.’ Yet the family is not the ‘end all and be all’ either. We use a good approach to business with discipline and love.” Aronoff had clients in Israel, Canada and Europe. He bills his services by the day or by the hour, much as an attorney might.

Over the decades he has seen a change in the family’s’ valuation of women as leaders. Years ago it was not uncommon for the code to be “no wives, no women, no sisters. Let them do other things.” Today he sees very little distinction and talks about a Jewish family business in Alabama headed by Nancy Collat Goedecke, privately held Mayer Electric, with four siblings and three generations. They run a successful business with 1,500 associates in 14 states, with Nancy at the helm. “I have worked with them on family solidarity, leadership, ownership and governance issues every quarter for nearly 30 years,” he said.

For advice for future generations, Aronoff, who has five grandchildren, said, “Parents should know that there are things equally important to kids being happy, like hard work, discipline, education and goals. … Also I tell young people, ‘Don’t think about BEING president, think about DOING president.’”