ONLINE EXCLUSIVE :: Tips for Successfully Running a Family Business

Transition Consulting Group (TCG) is a family owned business led by father-son team Paul and David Karofsky. Both offer decades of first-hand and professional experience in family business planning, consulting, coaching, mentoring, and leadership. Recognizing that the winter resort industry is no stranger to family-run businesses (including our own), SAM sat down with the Karofskys to learn more about the unique challenges that face these businesses. This will be the first part of an on-going series that will explore family businesses around the industry.

SAM: How does the new generation balance continuity/change?

TCG: It seems to us that, on the one hand, it's important to show current employees and customers that positive aspects of the resort will remain, and at the same time, present a vision for how the future will be even better (i.e., different).

It's always a challenge for members of the younger generation to have their voices heard. So often, they are discounted because of their relative youth and perceived lack of knowledge and experience. Often a qualified presentation can help. For example, in presenting a new idea, a younger person might say, "This needs some more exploration and development, but perhaps we could consider…" Or, they can try to build on the ideas of others. Doing this demonstrates hearing other views, collegiality and appropriate respect.

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SAM: How can the new generation expand the business or carve out its own niche?

TCG: It's vital that each generation make its own mark on the business. For some, that may mean continuing with the dream of prior generations. For others, it may mean radical change or the addition of totally new ventures. And for others, it may mean some "fine tuning." The key is that new generation members discover their passions and express themselves. Working in this context will likely produce superior results. Once upon a time work was called "work." You didn't have to love it to do it. That's very different today. The setting of agreed-upon goals and guidelines for risk, investment, expected return and clarity on roles will help. With the support of family members, each generation can find fulfillment and reward.

SAM: What are the best ways for the new generation to introduce their own management style? And when is the right time to do this?

TCG: We are who we are and we're not convinced that our personalities are about to change. Lots of discussion and candor can help. We need to learn who each other really is and to accept our differing management styles. The most important attribute of leadership is "self awareness," so it's also OK to get feedback on how our styles are perceived. Sometimes, we may opt for some modification to meet the needs of others.

SAM: How can new generations prove competence and gain respect and allegiance?

TCG: Walking the talk. Actions do speak louder than words, and they always will. Gaining respect takes time and is most readily gained by being given. Show the employees you are listening by asking for feedback and then acting on it.

SAM: How can a family business attract top non-family talent and keep it?

TCG: There is always a challenge in retaining top non-family talent in a closely held family enterprise. But the challenge can be reduced with some advance planning. The family needs to be ready to welcome key non-family members. There needs to be exquisite clarity around expectations on both sides. If equity will never be part of the deal, that needs to be made clear at the outset. Most important is for the family to be prepared to share its warts and moles.

SAM: How does a family business deal with "dead wood" in the family tree?

TCG: People who are ineffective and poor performers are seldom happy with their jobs. Ninety percent of the time, the affected person knows it well in advance and often even finds it a relief to be given "permission" to exit. Oftentimes an alternative role-one that better suits the individual-can be found. And, if not, sometimes, you've simply got to prune the tree. The key is to deal with the issue openly and proactively. Don't wait for the situation to escalate and present the family with no options.

Paul Karofsky is Founder/CEO of Transition Consulting Group, Ltd. He was third generation CEO of his family's business and is Executive Director Emeritus of Northeastern University's Center for Family Business and a longtime consultant to business families. The recipient of multiple awards and honors, Paul holds a certificate in Family Business Advising from the Family Firm Institute with Fellow Status. Paul can be reached at; (561) 626-1110;

David Karofsky is President of Transition Consulting Group, Ltd. He has over 15 years of experience coaching executives and working with companies across the globe to excel, grow and outperform their competition. The recipient of multiple achievement awards, he received his A.B. from Bowdoin College, an Ed.M. from Boston University in Counseling Psychology, and an MBA from Northeastern University. David can be reached at; (508) 875-7751;
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