Generations often pull in different directions

It is often said that you should not mess with a good thing – if it ain’t broke, don’t fix it.
In a family-owned business, this is often the mindset of a first-generation owner who has a traditional way of thinking – but it also could be a very dangerous and constraining way of running a family business today, say experts.
When Rudi Hauser Jr. joined his father’s chocolate-making business in 1985, things were done by hand. Ordering was done by writing each order on paper with three pages of carbon copy; accounting was done with a notebook and pen.
So when Hauser took the reins at Hauser Chocolatier in Westerly in 1990, seven years into the company’s operations, things were not broken, but he gave them a shake-up anyway. He got the innovative ball rolling and has not stopped since.
For his father, Rudy Hauser Sr., a Swiss-born pastry chef, it’s taken some adjusting.
“When I proposed to spend $15,000 on a computer system to write checks and handle invoices, he almost had a heart attack,” the junior Hauser said. “It was at that time a huge battle.”
Michael McGrann, assistant director of the Institute for Family Enterprising at Babson College, said it’s a common issue when businesses move from generation to generation. The older generation thinks “We don’t need to change, because look what we have done so far.”
“That can be a constraint in a family business,” McGrann said. Once previous-generation owners embrace changes, however, the combination of tradition and innovation can strengthen the business, he said.
One good way to look at it, experts say, is to think of the family business as an economic unit whose goal is to build and maintain wealth for the family. That is what keeps the legacy going.
The challenge for family-owned businesses is how to create new strands of wealth across all of the generations, and to do that, experts say, you have to be both conservative and flexible.
The history of Kongo Gumi, the 1,400-year-old Japanese temple building business that survived 40 generations, illustrates that point. Kongo Gumi kept the business in the family by breaking Japanese tradition and having sons-in-law take the family name and lead the business during generations when the family had no male heirs.
Provided that they are willing to take risks and adapt over the years, McGrann said, family-owned businesses can out-compete their non-family-owned peers.
Hauser Chocolatier continues to thrive by combining tradition with innovation. The chocolates themselves are based on classic Swiss recipes, but they also include modern and unusual flavors, such as pomegranate, and the office is fully computerized, from supply orders to accounting.
Rudi Hauser Jr. also set up a Web site for the business, so it can take online orders. And although all the technology has required a large investment, Hauser said it has resulted in big returns. Even his father acknowledges the improvement, he said.
“He sees that there is no way we can do what we do today without computers,” Hauser said.