New Jersey native Diana Schad is now leading the Grand Rapids-based Family Business Alliance as its CEO. The former Washington, D.C. lawyer — whose husband, Matt Schad, runs the family-owned Nucraft Furniture Co. — believes that family-owned businesses tend to operate very differently from other companies and therefore require specialized advocacy and research. Schad spoke with MiBiz on these topics, as well as her desire to diversify the Family Business Alliance’s membership.
Aside from your own involvement in a family-owned business, what drew you to taking this position?
There’s a number of things. Number one, they’ve done studies on family businesses in downtimes and they are one of the last businesses to get rid of employees because they feel a commitment to the employees, who become like family. I really like that integrity. I really like the values that go into a lot of family businesses. One of the things I’ve discovered over the years, and even in the last couple of weeks interviewing people, is how involved family businesses are in the community — either through nonprofits, through different types of projects — to make the community a better place. I really admire that. I think there are interesting, unique (people) that come up with family businesses.
Turning that around, what are some of the unique challenges with family businesses?
If you have an employee who’s not up to speed, it’s more difficult to fire a family member. It’s more difficult to figure out where somebody’s going to fit in. Or if the next generation isn’t capable of running the business, where do you go from there? I think there are some interesting issues that we address through our programing that can help our membership.
What does that programming consist of?
We have a program coming up this September that’s going to be on an outside board of directors. That’s something that a lot of family businesses don’t have. They just rely on the family members to make the decisions, and sometimes it can be really beneficial to have outside resources to give you a fresh perspective. When you’re in the family, you look at things one way. And if you have somebody from the outside, they may bring new insight into the decisions that you’re making.
In our conversations with owners of family businesses, one of the topics that comes up most frequently is making time to work on succession planning. What are some best practices?
One of (the) best pieces of advice (I’ve heard) was to do these before the crisis hits. Have (family) meetings before problems arise, because you get in a habit. I’ve seen our family benefit from that. We’ve been doing these meetings, my gosh, probably for 14 or 15 years, and it started out at a time when the economy was great, everything was terrific. In those 15 years, a lot has happened. We had the recession of 2008. We’ve had some family situations that have come up. We had a divorce situation. We’ve had a health situation. So if you have those meetings in place, you have a venue to talk about them.
In your new role as CEO at the Family Business Alliance, what do you hope to contribute to the overall organization?
We have a great team in place and have had a great team in place for operations. … What we’ve been missing is (discussing) where do we go from here. There’s kind of a discussion: Do we reach out to a wider audience of members? Do we reach out geographically to more members? And with that comes, how do we expand our programs? Right now, we do four quarterly programs a year and we’ve done some smaller programs. But we’d like to see what our members need. Part of my job is to get out and meet with the board, meet with the members, meet with our sponsors and see what is there that we’re not doing now.
The Family Business Alliance operates within the Grand Rapids Area Chamber of Commerce. Why do you see the need for a subgroup specific for family-owned businesses?
I’ve been meeting with the Chamber on that, too, because they’re already providing some wonderful resources to smaller businesses in the community, and larger businesses. I think what … we can offer to our members is the family business experience.
What do you mean by that?
The Chamber (represents) all kind of businesses. Some are family business, some are not. And I think we address issues that may be unique to the family business environment. And again, with these peer groups, they are primarily younger. … We have a next-generation group that’s a lot younger, just starting out, who’s figuring out where they fit in with the business. They’ve got a father or mother who’s worked with the business for 30 or 40 years and oftentimes need guidance. Where do they go from here? How do they fit into the business and what can they contribute to it? And again, I think family businesses (are) not just about money. Sometimes you’re supporting multiple generations.
As you start this position, what’s keeping you up at night?
I think the things that I need to work out is there is still a lot of potential. There are gaps in our membership. We’re missing diversity. There’s a lot of women-owned businesses and minorityowned businesses that we really should be reaching out to. That’s important for all of us. And so I have an idea of where I want to see us go, it’s just how we go about achieving that and how quickly we can achieve that. That’s somewhere where I need to be a little patient about things.