We are only a couple of weeks into 2022 and it is already shaping up to be another challenging year for America’s 5.5 million family businesses dealing with the coronavirus pandemic. Rampant …
We are only a couple of weeks into 2022 and it is already shaping up to be another challenging year for America’s 5.5 million family businesses dealing with the coronavirus pandemic. Rampant inflation, supply chain bottlenecks and acute worker shortages continue.
Family businesses are vital to America. According to the Conway Center for Family Business, they account for two-thirds of our nation’s GDP, just over 60% of U.S. jobs, and 78% of all new jobs created.
They’re really resilient and nimble. Family businesses, particularly those which are third or fourth generational, have learned from experience to survive through hard times, says José Liberti, a professor of finance at Northwestern University, Chicago.
One of many which have dealt with stressful times for nearly a century is the Moriguchi family. They own and operate Uwajimaya, a chain of Asian grocery and gift markets, which employs more than 400 people in Seattle, Bellevue, Renton and Beaverton, Oregon.
Their family business legacy dates back to 1928, a year prior to the beginning of the Great Depression. Fujimatsu Moriguchi opened a store in Tacoma, which grew out his fishcake sales to Japanese farmers, loggers and fishermen at worksites.
At the beginning of World War II, 120,000 Americans of Japanese ancestry were sent to relocation camps and forced to relinquish their personal possessions — homes, farms, businesses — and especially their freedom.
In 1942, the Moriguchi family was among 18,000 people placed in Tule Lake Internment Camp, the largest of the 10 War Relocation Authority (WRA) camps. It is a desolate area located 30 miles southeast of Klamath Falls, Oregon, in northern California, which is hot and dusty in the summer, and cold and muddy in the winter.
Upon their release, the Moriguchi family moved to Seattle and reestablished their shop in the International District. Over the years, they have been mainstays in the Seattle business community. Last year, to honor their community involvement, Tomio Moriguchi, retired CEO, and the family was presented the Seattle-King County First Citizen Award.
Like other successful family businesses, incorporating the next generation into the operations is critical.
Over time, families which bring the next generation into the business and leverage their abilities have a better chance to succeed. They focus on creating various kinds of value (financial, social, relational and reputational) and have an advantage, said John A. Davis, who leads family enterprise programs at M.I.T.’s Sloan School of Management.
Umajimaya’s current CEO is Denise Moriguchi, who received her master’s degree in business administration from Sloan. She is a granddaughter of the founder. She and her family relocated back to Seattle from the East Coast eight years ago and took over the company’s reins in 2017.
“At Uwajimaya, our values are to treat our employees and customers well. That started from my grandfather. I heard if his employees or customers needed help, he was always helping them,” she added.
One of the best metrics for the success of family businesses is the level of public trust in them. According to the 2016 Edelman Trust Barometer, more respondents trusted family businesses (66%) than public corporations (52%) and state-owned (46%) enterprises.
Researchers Josh Baron, adjunct professor at Columbia Business School, and Rob Lachenauer, found that on average, family businesses last far longer than typical publicly traded companies.
“Rather than being obsessed with hitting quarterly earnings targets, as public companies are, family businesses tend to think in terms of generations, which allows them to take actions that put them in better position to endure tough times,” Baron and Lachenauer reported.
Fostering an environment where family businesses can continue to grow, adapt and develop their business is important for America. They are our nation’s backbone and treasure.
Don C. Brunell is a business analyst, writer and columnist. He retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and now lives in Vancouver. He can be contacted at theBrunells@msn.com.
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