In his book entitled “Painfully Rich – J. Paul Getty and his heirs.” Author John Pearson interviews Mark Getty, the son of J. Paul Getty II. Mark provides a fascinating description of what a family business can be when the right conditions prevail. The following are some excerpts which provide an eloquent and insightful perspective on the advantages of family businesses.
Mark Getty (the son of J. Paul Getty II) talking about 'Tony Stone Images' a leading international non-news photo library which family interests had acquired as an investment, says that the primary purpose of the strategy behind the acquisition was 'to focus family interest and expertise in one area of investment, as happened when we still owned Getty Oil and not necessarily to provide employment for future members of the family.'
However, he is quick to add that he can think of 'few things more exciting than working in one's family company'. He remains convinced that 'a family business is potentially the most dynamic organisation in existence - provided the family has enthusiastic members who will work for it, a reliable source of family capital, and a common purpose and identity.'
By taking his long term-view, Mark is planning to harness the financial resources of the Getty Trusts, and thus begin to build the sort of genuine Getty 'dynasty' which J. Paul Getty talked so much about but never understood.
“Most of our troubles originated with my grandfather, who did not understand families or what made them tick. Come to that, he never really understood people - it is essential that we do.”
Mark Getty is painting a picture of what a family business can be, if the right conditions are met. The Getty Family history shows, however, that the ideal situation referred to above is often just that, an ideal situation - a dream. The reality is that family members often do not get on together, and the family business can be 'hell on earth' even when it provides the family with its primary source of wealth.
The key points made by Mark Getty are:
- Understanding families and what makes them tick; understanding people is essential to family business success and continuity.
- There are few things more exciting than working in one's family company when the right conditions prevail.
- A family business is potentially the most dynamic organisation in existence, provided that the family has: enthusiastic members who will work for it, a reliable source of family capital, and a common purpose and identity.
- What is needed for family business success is a sense of family identity and purpose, along with that magical activity which is as important to the rich as to the poor - the chance to work together.
- The challenge is to be able to unite the family by using their talents and resources and arousing their enthusiasm.
- The family business can be a catalyst to achieve one or more of the following objectives either within the business itself, or via the investment and other vehicles that can be created as a result of the success of the family business:
- Provide a focus for family interest and expertise.
- Provide employment for members of the family.
- Harness family resources and wealth.
- Build a family dynasty.
- Engage the full time interests of members of the family.
- Provide an avenue for demonstrating family skills and work well done.
- Offer something of a niche for any member of the family who wants it.
- Unite the family by using their talents and resources and arousing their enthusiasm.
- Providing the challenge of remaining 'a flourishing dynamic entity'.
(Source: John Pearson's 'Painfully rich - J. Paul Getty and his heirs' Macmillan, 1995)
The following are three quotations which also confirm the advantages of the family business and provide both inspiration and encouragement to those who are in family businesses and are facing daily issues and challenges which can tax their patience, strength and enthusiasm. They are offered as an acknowledgement and celebration of the contribution of families in business.
“For those who reach the destination after undertaking the succession journey, the rewards are well worth the effort. For parents, passing on to their offspring all they have worked for and built in their lifetimes is the best way to perpetuate their hopes and dreams into the future. For the successors, there is no more satisfying challenge than to preserve and build on what has been entrusted to them and then to pass it on to their own children. Indeed, there may be nothing more basic in the human instinct and ethos. The urge to work with family may go as far back as the Stone Age when people hunted and fathered in tribes. It has deep roots in agricultural societies in which families have farmed the land together for hundreds of years. In today's highly mobile modern societies that tend to scatter families, a business in which family members spend a lifetime working together to achieve common goals and values remains one of the few institutions in which these instincts can still be expressed” (Lansberg, I. - Succeeding Generations. 1999, Harvard Business School Press, p.x)
“The world today is still perceived by many as a cold, uncertain jungle and so the dream of creating economic wealth from within the warmth of the family circle remains a powerful and attractive one. There are many family businesses in Australia today because the family is seen as offering a safer, more personal and more stable way of doing business. There is the strong belief that family members can trust one another more than other people. A large proportion of families are drawn to set up a business not only for economic reasons but also for highly emotional ones. They are in it for more than just the money. “ (Source: Robbins, B. & Wallace, D. - The Family Business. The Business Library. 1995)
"Family businesses are unique combinations of rationality and emotion. Family business members claim that family businesses are special because they are a labour of love. Building a company with people you care about can be more fulfilling than building a firm with people who do not share so fundamental a connection. Common sacrifices and success enable individuals to achieve a real sense of pride in accomplishing the dual goals of business growth and family happiness." (Source: Kuratko, D. & Welsch, H. - Entrepreneurial Stategy: Text and Cases. The Dryden Press, 1994, p.484)