By Don C. Brunell
We are only a couple 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 continues, as do supply chain bottlenecks.
America’s family businesses are vital. According to the Conway Center for Family Business, they account for two-thirds of our nation’s GDP, 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, Chicago.
The Moriguchi Family is one of many that have survived stressful times for nearly 100 years. They own and operate Uwajimaya Asian grocery and gift market chains in Seattle, Bellevue and Renton. The company employs more than 400 people.
Their family business legacy dates back to 1928 — a year prior to the beginning of the Great Depression. Fujimatsu Moriguchi opened Tacoma’s first store, which sold fishcakes to Japanese farmers and loggers.
At the beginning of World War II, 120,000 Americans of Japanese ancestry were sent to relocation camps and forced to relinquish their personal possessions — homes, farms, businesses — and especially their freedom.
The Moriguchi family was one of 18,000 people who were placed in Tule Lake Internment Camp in 1942. This camp was the largest among the 10 War Relocation Authority camps. It is a desolate area located 30 miles southeast of Klamath Falls, Oregon, in northern California — hot and dusty in summer, and cold and muddy in winter.
The Moriguchi Family relocated to Seattle after their release and reopened their shop in the International District. They have been a mainstay in the Seattle business community for many years. In recognition of their community involvement, Tomio Mriguchi, a retired CEO, and the entire family were presented with the Seattle-King County First Citizen Award.
Like other successful family businesses that have incorporated the next generation into their operations, it is essential.
Families that bring in the next generation and use their skills to grow the business have a greater chance of success. They focus on creating various kinds of value (financial, social, relational and reputational) and have an advantage, said John A. Davis, who leads family enterprise programs at M.I.T.’s Sloan School of Management.
Umajimaya’s current CEO is Denise Moriguchi, who received her MBA from Sloan. She is the grand-daughter of the founder. She and her family relocated back to Seattle from the East Coast eight years ago and took over the company’s reins in 2017.
“At Uwajimaya, our values are to treat our employees and customers well. My grandfather was the first to do this. I heard if his employees or customers needed help, he was always helping them,” she said.
The level of trust that the public has in family businesses is one of the best measures of their success. According to the Edelman Trust Barometer 2016, more respondents trusted family businesses (66%) than public corporations (52%), or state-owned (46%).
Josh Baron, an adjunct professor at Columbia Business School and Rob Lachenauer found that family businesses last on average longer than those of 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.
America must foster an environment that allows family businesses to continue to grow, adapt, and develop. They are our nation’s backbone and treasure.
Don C. Brunell, a business analyst, writer, 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 theBrunells@msn.com.