Kirk Ring thinks a lot about family, especially when there’s money involved.
Ring is an assistant professor at Wichita State University and the new director of the 19-year-old Family Business Forum, which assists family-owned businesses.
He succeeds long-time director Ron Christy, who died in April.
Ring, 36, a native of Vicksburg, Miss., is married to Melissa and they have three children, all younger than 3.
The basic idea is to provide educational opportunities for family business owners and their family members as a way to better understand the dynamics when you mix business and family. What you wind up with is a focus on three or four key areas. We focused more heavily in the beginning on family business succession and that is something we still focus on now, but we have had a fair number of members who have been with us for a long time, so we have diversified what we do.
This year one area of focus will be building leadership in the next generation. So, we have a gentleman coming in from Asheville, N.C., who worked with the Vanderbilt family. It’s kind of funny because some people say when you tell them he worked with the Vanderbilts “Aren’t they billionaires?” but even a family like that has the same type of issues when you mix family and business together.
There is difficulty in talking about certain issues, particularly death and estate planning, because it feels like the next generation is trying to push the senior generation out, when it’s not really that. They are focusing on the business side, but the senior generation often feels they are waiting for them to leave the business or leave – in general.
There are really two forms of succession. … There’s an ownership succession and a management succession. Management succession can be an easier task to deal with because it’s very much based on the activities within the business. So, I’m CEO, founder and patriarch of the business, and I have two children. I have to decide how the task is going to be split and who will be the next CEO. And some of that can be touchy in terms of who you select, based on their skills and abilities. There is a lot of information out there from common consulting that companies do on succession, but when you add in the family component, there is the dynamic of where we see each other at church on Sunday or we have dinner together and Christmas together.
This where you see a lot of the problems arise because in the U.S. culturally we don’t talk about money with our kids. Now the kids are asking “how do we value the business?” And the assets have grown over the years. It’s not mom and dad’s checking account – it’s big and they pay taxes on it – and they are not just going to give it up because it’s their retirement. So now, the kids have to buy it and what if it’s multiple millions of dollars. You have to figure out early on: How do you build the wealth in the next generation so they can do the buy-sell agreement. Gifting, estate planning, there are all kinds of ways to make it work. We have experts who do that.
Around 30 percent of family businesses are successfully passed on to the next generation of that family. The rest, something else happens. It’s sold or closes or whatever. When you look at the companies that fail, the biggest issue is the lack of communication. That is where they have their sticking point. So we focus heavily on that.
Growing up, I helped my uncle start a company back in Vicksburg. He used us as free labor for the first few years. He started a lawn service, and when he started out, he boot-strapped it, like most entrepreneurs, so he found as cheap a labor as he could, and most of it was next door, because we lived next door. After working a lot of hours, my pay was something like $350, which was a lot of money because I was only 13, but my dad had a talk with him. ... Over the years, I worked for him, helped him with the business. Then I worked with a close friend, whose family had a 100-year-old lumber company.
Not as much as you would think. I looked at Kansas as a place that wasn’t too removed from the family farm. Not everyone, but I’ve meet a lot of students who are one generation from the family farm. So there is a work ethic and down-home values that are very similar to Mississippi.