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The Ongoing Journey of a Family Business: A Legacy in Transition
Kevin Kelly, CEO of Emerald Packaging, stands at the helm of a family-owned enterprise that has withstood the winds of change for more than six decades. What makes his story noteworthy is not just the steadfastness in traditional business values, but also how he embraces necessary evolution in leadership. Kelly's journey reflects a delicate balance between historical family practices and modern business acumen.
The Family Business Model: Tradition Meets Modern Needs
Emerald Packaging began as a small venture, focusing on bread bags in Berkeley, California. Today, they have transformed into a leading manufacturer of flexible plastic packaging, yet Kelly emphasizes that the company is not just family-run; it's family-owned with professional management. As he points out, “I emphasize ‘family-owned’ because it’s not family-run anymore.” This strategic shift is imperative for survival in a fast-paced marketplace.
But why is this model effective? Family businesses often face the dilemma of leadership inbreeding—a situation where family ties overshadow the need for competent management. Kelly's decision to hire outside talent for day-to-day operations has proven to be a crucial factor for Emerald’s success. This trend is echoed in Robert Sher's commentary about the critical need for family businesses to adapt and grow by incorporating outside leadership.
The Importance of Professional Leadership in Family Firms
Many family-run enterprises falter when they cling too tightly to family members in leadership roles, as evidenced by industry trends showing that only 12 percent of family businesses survive past the third generation. Kelly’s narrative echoes this reality; he faced significant adversity early in his tenure, yet he turned things around by prioritizing innovation and hiring experienced leaders. The outcome? A remarkable sales growth from $16.5 million to over $90 million in a remarkably short time.
Sher highlights the value of appointing capable outsiders, who can infuse an organization with fresh perspectives and skills. The hiring of skilled executives from outside the family, as seen in the case of Torani, a company that revitalized its operations under Melanie Dulbecco, illustrates how making tough decisions can lead to significant business growth.
Innovative Strategies: Staying Ahead in the Market
Emerald’s commitment to embracing technology and innovation sets it apart in the competitive packaging industry. Kelly asserts that the company is a pioneer in using food-grade recycled plastics for retail packaging, ensuring they stay one step ahead of competitors. Such advancements not only streamline operations but also enhance sustainability, resonating with the growing consumer preference for eco-friendly products.
This ongoing innovation serves a dual purpose: it affirms the company’s relevance within a shifting market and reinforces their legacy of quality and responsibility. As Kelly points out, it is essential for entrepreneurs to be adaptable and strategically invest in new technologies while maintaining core family values.
Building a Family-Oriented Culture in a Corporate World
The human element remains at the core of Emerald's operations. Kelly highlights a moral responsibility to his employees, emphasizing the importance of loyalty and nurturing a strong workplace culture. “I believe that smaller companies must work with employees where they are to ensure products get out,” he states. Cultivating this family-oriented culture strengthens employee loyalty and ultimately contributes to retention, which many larger corporations struggle with.
In many ways, Kelly represents a new wave of family business leaders who understand that fostering strong employee relationships is integral to sustaining growth. This perspective necessitates a more flexible approach within the often rigid structures associated with traditional family businesses.
Future Predictions: What Lies Ahead for Family-Owned Businesses?
As family businesses evolve, they face increasing pressure to adapt to external changes, whether technological advancements, market dynamics, or shifts in consumer preferences. The transition seen in Emerald Packaging is merely one example of an essential trend that will likely define the future of family firms.
Kelly's proactive approach sets a precedent for family-owned businesses looking to thrive. By recognizing the importance of professional management and investing in innovation, these enterprises can not only survive but flourish in an ever-changing corporate landscape.
Conclusion: The Family Business as A Testament to Resilience
The narrative of Kevin Kelly and Emerald Packaging serves as a vital reminder that while traditions hold an essential place in the hearts of family businesses, the road to sustained success often requires a willingness to embrace outside influences and innovative practices. By balancing the embrace of heritage with a vision for modernization, family businesses can overcome obstacles and ensure that their legacies continue to thrive for generations to come.
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