By Don Brunel
We’re just weeks away from 2022 and it’s already shaping up to be another tough year for the 5.5 million American family businesses facing the coronavirus pandemic. Rampant inflation, supply chain bottlenecks and acute labor shortages continue.
Family businesses are vital to America. According to the Conway Center for Family Business, they represent two-thirds of our country’s GDP, just over 60% of jobs in the United States, and 78% of all new jobs created.
They are really strong and agile. Family businesses, especially third- or fourth-generation ones, have learned from experience to survive tough times, says José Liberti, a finance professor at Northwestern University in Chicago.
The Moriguchi family is one of many people who have lived through stressful times for almost a century. 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.
The legacy of their family business dates back to 1928, a year before the onset of the Great Depression. Fujimatsu Moriguchi opened a store in Tacoma, which expanded its sales of fishcakes to Japanese farmers, loggers and fishers on construction sites.
At the start of World War II, 120,000 Americans of Japanese ancestry were sent to relocation camps and forced to give up their personal possessions – homes, farms, businesses – and most importantly, their freedom.
In 1942, the Moriguchi family was among 18,000 people placed in the Tule Lake internment camp, the largest of 10 War Relocation Authority (WRA) camps. It’s a desolate area 30 miles southeast of Klamath Falls, Oregon, in northern California that’s hot and dusty in the summer and cold and muddy in the winter.
Upon their release, the Moriguchi family moved to Seattle and re-established their shop in the International District. Over the years, they have been mainstays of Seattle’s business community. Last year, to honor their community involvement, retired CEO Tomio Moriguchi and his family received Seattle-King County’s First Citizen Award.
Like other successful family businesses, integrating the next generation into operations is essential.
Over time, families that bring the next generation into the business and leverage their abilities have a better chance of succeeding. They focus on creating various types of value (financial, social, relational and reputational) and have an edge, said John A. Davis, who directs family business programs at MIT’s Sloan School of Management.
The current CEO of Umajimaya is Denise Moriguchi, who earned her Masters in Business Administration at Sloan. She is a granddaughter of the founder. She and her family moved to Seattle from the East Coast eight years ago and took over the reins of the business in 2017.
“At Uwajimaya, our values are to treat our employees and customers well. It started with my grandfather. I heard that if his employees or customers needed help, he always helped them,” she added.
One of the best indicators of 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 both state-owned (52%) and state-owned companies (46%).
Researchers Josh Baron, an assistant professor at Columbia Business School, and Rob Lachenauer have found that, on average, family businesses last much longer than typical publicly traded companies.
“Rather than being obsessed with meeting quarterly profit 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 the hard times,” Baron and Lachenauer reported.
Fostering an environment in which family businesses can continue to grow, adapt, and expand their business is important to America. They are the backbone and treasure of our nation.
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 reached at [email protected]