A Family Business That's Literally About Having Skin in the Game
Royce Leather has successfully made the transition from parents to sons by passing along values as well as the business.
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William (Billy) Bauer and Andrew Royce Bauer run a third generation family business, Royce Leather, based in Secaucus, New Jersey. Their products include GPS Tracking Wallets and Fingerprint Locking Briefcases. Their parents, Harold and Kathy, transferred the business to the brothers, but Harold still works for the company in New York at the age of 67 handling sales calls. Harold and Kathy consult the brothers, and hold them accountable for success in their generation. Billy runs the sales program from Paris, where he is receiving his MBA. Andrew runs the creative design from North Carolina where he is receiving his Bachelor's degree. Their products include RFID blocking technology, such as a briefcase that requires you to swipe your thumb to unlock it. Andrew shared some keys to family business success:
Learn to transform anything into money.
Billy started working for his parents in the family business at age 16, working 50 to 60 hours a week. "I worked relentlessly throughout high school. I was never paid," Billy shared. He had to come up with an alternative. One way he earned money was to collect and sell Halloween candies. He patiently waited until after the holiday passed, to sell free candy bars for $2 each at his locker. He also sold $15,000 worth of high school and college text books on EBay. He would ask people for the books, and then sell them out of his basement. He credits these learning experiences of making money from free items to his family business becoming one of the fastest growing privately held companies.
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Andrew and Billy really don't care about the expectations of others as to how or what they should be doing to build their family business. They embrace a disruptive nature in business, bending the rules of engagement. For example, they weren't afraid to call and push past gatekeepers to get to key business leaders that are far more known and successful than they are. Billy explained, "The key to my success is is being creative, aggressive, and honestly not caring about the consequences of my actions whether good or bad." They were first to come up with purple and bright pink leather goods. It was bizarre at the time, but it's now acceptable. The rewards of different kinds of disruptive activities and a strong sense of not caring include relationships with CEOs of multi-billion dollars and multinational companies who they can access at anytime. It also garners media attention and innovates their industry.
Get attention for your team.
The Bauer brothers have veteran team members who have bought into their family business' culture of continuous innovation. One way to inspire loyalty and earn buy-in from team members and employees is to get them or their work featured in the media. One publication used a beautiful picture of one of the company's craftsman. It reinvigorated him in his work, along with other staff whose works are also profiled from time to time in the media. Getting attention for your team and their efforts reaffirms that they are doing something right. Who doesn't want to see their name and picture in the press as a reward for their accomplishments?
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Only do what you do best.
Some family business owners create an atmosphere that's counterproductive when there aren't clearly defined roles and responsibilities. Andrew explained, ""In order to avoid ownership-related conflict in family business, we sought out legal advice once it was clear that there would be a transition towards the next generation assuming sovereignty over the operations. Once there was a clear agreement, we removed all uncertainty." Andrew is photogenic and great with technology, which is why he's in the public eye more. Billy is strong in sales and operations management, which keeps his focus more on business growth. They wrote down their roles to ensure that neither one of them step into the others' domain by mistake or on purpose. They have learned how to l leverage their core competencies and strengths, without crossing boundaries. Disruptive activities work well outside the family business, but not within. They admit that every once in a while it happens.
Serve your community.
The local community is everything to Andrew and Billy Bauer. Billy explained,"We don't work for our own gain.There's a strong connection between family business and the local community. Without it, the family business would not flourish in the first place." They have a diverse workforce with all kinds of backgrounds. They've made concerted efforts to hire people who have just completed rehab and those who have served in army. They adhere to the principle of "service above self," and seek to uplift and empower others in their external and internal communities. Their internal community of employees have a sense of ownership and believe that they are a part of the family business success. Employees typically stay an average of 12 or 13 years.
The Bauer brothers learned from their parents how to run a successful family business. Billy offers this as advice: "The trick to working together as a family is to ensure that parents don't overshadow their children. [My parents] have been pretty successful in ensuring that my brother and I's voices were heard and that new ideas (products, distribution channels, promotional concepts) were not only recognized but also experimented with. Even if they did not always work out, there was a strong element of freedom that encouraged challenging the status quo."
Related: The Power of Giving Back: How Community Involvement Can Boost Your Bottom Line