New Knowledge

When Family and Business Meet

BY | KAITIE CATANIA

PHOTOGRAPH BY |

ANDY DUBACK

you know that feeling when you

finally realize something and then you can’t stop noticing it—you seem to find it everywhere? That’s how a class or conversation with Pramodita Sharma, director of the Family Business Institute at Grossman School of Business, might leave you—seeing family businesses everywhere.

Sharma is renowned for her extensive research on succession, governance, entrepreneurial leadership, and sustainability, which serves as the “go-to” literature in her field. Recently the inaugural SchlesingerGrossman Chair of Family Business was named among the top one hundred influencers in family business by Family Capital, a London-based online magazine.

When asked about the significance of family businesses and why she chose to build a career around it, “Dita”—as her students call her—makes it clear why she’s earned a reputation among Grossman students as one of their most beloved professors.

“What did you do this morning? What did you eat? What are you wearing? What are you using right now?” she asks in a non-invasive way, but rather a genuinely curious way. She wants to make that connection between each individual and the enormous entrepreneurial ecosystem that unknowingly affects them.

“Every single product, everything you touch comes from a business family. Who is manufacturing it? Who is distributing it? We tend to use the products and services of business families, and these families remain in the background,” she says.

Of course, there are the well-known heavy hitters like the Walton family of Wal-Mart, the Buffet family of Berkshire Hathaway, the Murdoch family behind Fox News, and France family behind NASCAR. Together they employ nearly three million people and earn more than $750 billion in revenue. But what Sharma challenges her students to understand is that those billionaire families aren’t the norm, nor are they the only ones worth studying. They’re just the tip of the iceberg.

A family business is defined as any business involving two or more family members, with a majority of ownership or control belonging to a family. It’s estimated that roughly 90 percent of American businesses are family-owned or controlled.

Sharma puts it this way: “If I have an idea for a widget, who’s going to lend me money first? I’m probably going to go to people who already know me or trust me, who will say, ‘Ok I’ll take a chance on you.’” From there, that simple investment can be a one-generation operation or grow into a multi-generational organization that changes hands with the times.

In fact, the oldest family-owned business operating in the United States today was originally founded in 1623 in Constantinople (known now as Istanbul, Turkey). The business? Zildjian cymbals—as in the musical instrument you might find on a drum kit. The family’s metal craft survived nearly four hundred years of ownership, multiple wars and revolutions, and an international move. For scholars like Sharma, there’s a lot of history, innovation, and governance to unpack in a business like that.

“The literature has moved beyond ‘family business or not family business.’ Most businesses are family businesses. Let’s now understand the ones that do thrive and why others don’t thrive,” she says.

Closer to home in Vermont, the von Trapps might be the first family that comes to mind, but they are far from the only business family in the Green Mountain State. American Flatbread at Lareau Farm in Waitsfield, Rhino Foods in Burlington, and even the award-winning craft brewery The Alchemist in Stowe are all family businesses. They’re also among the select winners of the annual Family Business Awards—established by Sharma in 2012— to recognize successful homegrown businesses. Through the years, many of these local business owners have made guest appearances in Sharma’s classes to share their knowledge with students.

“Connecting to people runs very deep for family businesses. It’s not only their name on the product or their services, but it’s their loyalty to customers, communities, employees. The trust and the pride, those are distinguishing factors of family businesses,” she says. And the respect and recognition for her support is reciprocal.

“Dita’s a go getter,” says Ted Castle ’74, owner and president of Rhino Foods. “She’s out there trying to have closer ties to community members and businesses in Vermont, and she’s very good at nurturing relationships. She deserves a lot of credit for being authentic in her efforts. She’s very authentic about making the business school be bigger, broader, better, and more distinguished, doing everything it needs to do to be a great institution.”

The cookie dough producer for Ben & Jerry’s ice creams (Rhino Foods) and drum cymbals from Zildjian are a far cry from the behemoth that is Wal-Mart or the salacious businesses featured in hit shows like HBO’s Succession and Fox’s Empire. And Sharma wants to dismantle the high-powered, cutthroat rendition of family businesses we tend to see in the media. In reality, they’re kind of the opposite, she says.

“At UVM, if you go into any school with a named chair or endowment of any sort, there is a business family behind it. ‘Grossman’ is a third-generation family business,” she says of the school’s namesake, Steven Grossman ’61, whose family manufactured custom corrugated packaging. “And Steve Schlesinger, who partnered with Grossman to endow my position, is a second-generation business leader of a market research company his mother started,” she adds.

“I’m sitting at a school that exists because of a family business, at a university that relies on the generosity of family businesses. We say they are the biggest philanthropists in the world and they are the biggest community builders in the world, but that’s not an image that’s portrayed in the media.”

Coming from a business family in Northern India herself, Sharma understands the mischaracterization first-hand. Though she briefly dabbled in her family’s manufacturing and distribution business, it wasn’t for her.

Now, having lived all over the world before settling at the Grossman School of Business in 2011, she brings an intentional global perspective to her teaching and to the school—literally. Before these virtual times in January 2020, the annual international family case competition she spearheads brought eighteen universities from eleven different countries to UVM’s campus to talk family business. “My charge as a faculty member is to prepare our students for the world that we are going to build and lead. When we cannot take our students around the world, we try to bring the world to them.” UVM

SUSTAINABILITY IS GOOD BUSINESS

Building on their existing body of co-authored research, Pramodita Sharma and Sanjay Sharma, Dean of the Grossman School of Business, offer a granular view of ways in which family businesses implement sustainable business practices in the 2021 book they co-edited, Pioneering Family Firms’ Sustainable Development Strategies (Edward Elgar Publishing).

The collection describes the sustainable development journey of fifteen business families committed to using their enterprises as a force of societal good. In turn, each family reaps benefits of high economic returns, while contributing to society and environment. The youngest family firm is in its twenties, while there are others over one hundred years of age. Size, industry, locations vary. But all these business families share a deep shared commitment towards sustainable development, control over strategic decision-making in their firms, and trans-generational continuity intentions.

Family values embed their enterprises with a strong sense of purpose to achieve their chosen sustainable development goals. Professionalized systems and processes foster the development of capabilities, and partnerships with a variety of stakeholders ensure the simultaneous achievement of social, environmental, and profitability goals.