Guest Commentary: Family business are vital to America’s economic survival in turbulent times
Nimble, resilient …
Don BrunellJanuary 27th, 2022
We are only a few of weeks into 2022 and it is already shaping up to be another challenging year for America’s 5.5 million family businesses dealing with the coronavirus pandemic. Rampant inflation, supply chain bottlenecks, and acute worker shortages continue.
Family businesses are vital to America. According to the Conway Center for Family Business, they account for two-thirds of our nation’s gross domestic product, just over 60% of U.S. jobs, and 78% of all new jobs created.
They’re really resilient and nimble. Family businesses, particularly those which are third or fourth generational, have learned from experience to survive through hard times, says José Liberti, a professor of finance at Northwestern University, in Illinois.
One Washington family that has dealt with many stressful times for over a century is the Campbell family. It is a fifth-generation award-winning family business that has owned and operated Campbell’s Resort, at Lake Chelan, since 1901.
The family legacy dates back to 1898, when Clinton Campbell, a Sioux City, Iowa, magistrate, traveled by train to Wilbur and hiked three days to Lake Chelan. He purchased the original hotel property for $400. In 1901, he and his wife, Caroline, completed construction of a 16-room hotel.
The original property owner, who famously said he’d “sold a sand dune to a sucker,” would be amazed to see Campbell’s Resort today with its 170 guestrooms, conference center, and restaurant. That “sand dune” is now part of 1,800 feet of prime waterfront beach along one of the world’s most scenic and pristine lakes.
Over the years, the family weathered tough times. Clinton and Caroline’s only son, Arthur Campbell, was a World War I veteran who contracted the deadly Spanish Flu and survived. Later generations struggled through the Great Depression, had two sons serving in World War II, dealt with disruptions caused by area wildfires and economic downturns, and now the coronavirus pandemic.
The sudden onset of the COVID-19 pandemic abruptly decimated Campbell’s meeting and events business and closed the dining room. Subsequently, the resort has gradually reopened, but inflation, worker and supply shortages, and social distancing limits added to operating costs.
The silver lining is visitors started returning last year to local wineries and for family vacations. It helped that Chelan Public Utilities District wisely invested in high-speed internet, which allowed people to work remotely.
What are the ingredients for family business longevity?
Researchers Josh Baron, adjunct professor at Columbia Business School, and Rob Lachenauer, found, on average, family businesses last far longer than typical publicly traded companies.
“Rather than being obsessed with hitting quarterly earnings 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 tough times,” Baron and Lachenauer reported.
Over time, the families that bring the next generation into the business and leverage their abilities have better chances to succeed.
Fostering an environment where a sixth generation of Campbells can continue to grow, adapt, and develop business is important for America. Families in business must be able to be nimble and financially strong to weather disruptive times.
Don C. Brunell is a business analyst, writer, and retired president of the Association of Washington Business. He now lives in Vancouver, Washington, and can be contacted at theBrunells@msn.com.