It’s no secret that the greatest source of wealth in the U.S. is contained in privately held businesses. But here's a sad fact: Many of the great fortunes never make it down to the third generation, and that’s what we’re talking about with businesswoman, entrepreneur and author Mitzi Perdue.
She wrote a book called How to Make Your Family Business Last: Techniques, Advice, Checklists and Resources for Keeping the Family Business in the Family. Mitzi is the widow of Frank Perdue, the chicken king, and daughter of Ernest Henderson, co-founder of the Sheraton hotels. She's also deeply involved in fundraising for the fight to end human trafficking. You can hear more about her work here.
See Family Glue and the Art of Keeping Families Together for audio.
Jim Puplava: Mitzi I want to begin with something you talk about in your opening chapter, the best investment family businesses can make is to cultivate a loving, high functioning family. Let’s talk about that because when you think of success, you sometimes don’t think of the personal side of that.
Mitzi Perdue: In the Perdue family we have a saying that I’m fond of and I think it applies to everyone in a business family, happy family: happy business—miserable family, miserable business. So it’s totally worth all the effort you can put to make it work out. But that immediately raises the question, what do you do to make yourselves high functioning? I’ve spent the last decade and half studying that and you will be happy to know I have the answer.
I think it was during Christmas and you were out shopping with one of your friends. Can you share the story of Carla when it comes to the importance of family or even money?
The story of Carla, and I’m disguising her name, but the amounts of money that I will be talking about are absolutely, totally real and it happened just around this time of year about a decade ago.
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We were walking down Madison Avenue in New York, and for those who aren’t familiar with Madison Avenue right around the holiday season, it’s just one of the most beautiful places possible; there are holiday decorations, people carrying their packages— it’s just a happy time. We were walking along and I got to talking about how I was looking forward to the next day to go back to Salisbury, Maryland where my family is and just kind of imagining how it was going to be to have the biscuits and turkey and everything for Thanksgiving. But then I look over at Carla and her face is looking drawn…and I said, “Carla what’s wrong?”
And she looked over at me and she said, “I wish I had a family to go home to,” but I said, “Carla you’ve got your brother Joe, can’t you spend Thanksgiving with him?” And she said, “No, about 10 years ago we had a quarrel over our inheritance, our father left each of us a billion dollars.” I asked her, “Well what went wrong?” She said, “We quarreled over the division of it. There was two billion dollars at stake and he wanted somewhat more than what he was getting already. We ended up in court and he lied about me in court.”
She told me when it gets to the point when a relative prefers money to the relationship that’s a bridge too far. Carla said, “We could never put it back together again, we haven’t spoken except in court for 10 years.” Carla said when she thinks of me going home to a happy family, she would give every penny of her inheritance if she had a family [with whom she could spend the holidays].
The conclusion I draw, and I bet everybody else draws the same conclusion, is good lord, relationships are more important than money. You’ve got to do everything you can to support and nurture them because if it falls apart the way it was in the case of Carla—she would have spent a billion dollars to have what many of us just take for granted.
Let’s talk about what a high functioning family looks like. You have the ideal family business and the family is getting along, what does that look like to you?
I’m going to quote one of my favorite authors, her name is Robyn Fivush and she’s from Emory University. She studies high functioning families and… [Fivush says] the families all love and support each other and they’re happy to be together. On top of that, in a really high functioning family, the kids are not as vulnerable to substance abuse as most families. They tend to do well in school, they aren’t truant, they work on their grades, they don’t get in trouble with the law… very often they go on to get a higher education.
Based on Robyn’s studies at Emory University, the factors of high functioning families all boil down to knowing their family stories. They have a strong culture; they know where they came from and they know what they’re about. They’re looking to the future and the past and it helps them live better in the present if they know their past and they can think toward the future.
Let’s move on to your chapter on tradition and how you explain it to be the lifeblood of family identity.
This is a particularly good time to talk about it with Thanksgiving coming up. Traditions really are the lifeblood of identity. It helps to know who you are and where you came from. People go through life looking for meaning and one of the best sources of it is your family, especially if it is your family business. In both the Henderson and Perdue families we put so much effort into tradition because it’s traditions that transmit the values that you have.
I’ll share with you how we’ve passed down some of the traditions. Frugality is a tradition shared by both families and one of the ways we share this is through family newsletters. We also have a newsletter for children roughly six times a year and each newsletter has within it some kind of tradition or value that we really care about.
A recent one, and with Thanksgiving coming up this is appropriate, great grandmother Perdue always used to make the most wonderful biscuits for Thanksgiving and everybody loved them and looked forward to them. When she made those biscuits she’d make up the batter, she’d take a baking sheet, she’d cover it with aluminum foil and then she’d drop biscuits onto the foil, bake the biscuits, remove them and then—here’s the part that’s important—she’d choose to wash off the aluminum foil; soap and water, dry it, and reuse it. The point of that story is that she was frugal, she was ecological and she didn’t waste. We really want to embed that story within the kids so that it’s with them for life.
You talk about money and happiness. Money doesn’t buy happiness… when you think of some of the great fortunes we know of today— the Rockefellers, Carnegies, even the Bill and Melinda Gates Foundation and the Buffet Foundation— they think philanthropically. Let’s talk about that and happiness—it’s not all about money.
Frank used to have this saying, and it’s one of the most true things in the world: If you want to be happy, think what you can do for somebody else. On the other hand, if you want to be absolutely miserable, think what’s owed to you.
To me, philanthropy is a way, really in the end, to be happy because if Frank is right, the way to be happy is to think what you can do for somebody else. Philanthropy is a structured way for doing that. People sometimes ask me what is it that has kept the Henderson family together since 1840 and what’s kept the Perdue family together?
There are several things but I would put philanthropy right up at the top because if you’re being philanthropic, to me it’s an antidote to selfishness. To me it’s selfishness that destroys families.
Well, let’s talk about carrying this tradition on, when it comes to knowing your family’s stories. Especially, this is so important when you look at some of the great fortunes in the country, knowing about the grandfather who created the business, stories about it and you talk about creating a family book, and the meaning of what it means to be “us”.
Both the Henderson and Perdue families do this and even if you’re just starting your family this is worthwhile. It’s so easy to take your family for granted.
Maybe five or six years ago I started thinking, what does it mean to be us? And I felt that I couldn't answer it myself, so I began with our newsletter and I started with the Henderson’s and asked family members, what does it mean to be us?
They would write back 250 words or sometimes even 1000 words. I didn’t expect the project to grow as big as it did and it tapped into something really important which is people thinking, what does it mean to be members of this family? And what happened was people would write back a little essay of what it means to be us and I’d send their essay to the rest of the family and that would spark interest in other people, writing little essays and pretty soon we had something like 70 essays on what it means to be us.
The advantage of this is just enormous because it means the 80-year-olds can read what the 12-year-olds are thinking [and vice versa]. It’s just a fabulous way of focusing on the value of being a member of this family and everybody gets to know each other a little better too… I found it deeply moving and the feedback I got was that it was a tremendous factor for what we call family glue.
I wonder how many other families think of family glue, whether they’re a business family or not. There are things that pull you together, I call that family gravity or family glue and then there’s the centrifugal force that pulls families apart. I want everybody to the extent that it’s possible to focus on things that are gluey, things that bring you together, because honestly, can you think of a greater source of either happiness and joy or misery and despair than in your intimate relationships? That’s where you heart is.
Again, take the case of Carla, she had a billion dollars, and she’d give every penny of it away if she had a loving supportive family to go home to. The things I’m talking about, they do take effort, but good lord they’re worth it.
For more on Mitzi Perdue and her book, How to Make Your Family Business Last: Techniques, Advice, Checklists and Resources for Keeping the Family Business in the Family, you can visit her website. For more Financial Sense interviews with Mitzi click here.
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