Here’s a fun fact to wow your friends whether you’re sipping wine at the Hollywood Bowl, waiting to order a Chili Cheese Dog at Pink’s or stuck in traffic leaving the Hollywood Bowl: In 2010, Los Angeles/SoCal was the global headquarters for 22 Fortune 500 companies. In 2022, the number was down to 11.
You would expect the loss of half of the Fortune 500 companies over a 12-year period to have a devasting impact on the local economy. However, I certainly haven’t seen any fewer Tesla Model S, Porsche 911s or BMW X7s in Whole Foods’ parking lots so someone or something is making the SoCal economy hum. That something is the tremendous number of family businesses and family offices that comprise the backbone of SoCal’s economy.
The overlap of family, business, and wealth creates unique and hugely consequential issues within families. Over the past 30 years, family business centers that educate and support local family businesses have gained in popularity. These family business centers are typically connected to a university and endowed by a donation from a family business.
While there are number of family businesses groups associated with local universities, none of them have identified the next generation as the focal point to honor the past and drive the economic future of their family businesses and the SoCal region.
The LMU Family Business Entrepreneurship Program was started to meet the needs of businesses, alumni, and students looking for a community and resources to help address the unique challenges and opportunities faced by family-run businesses. LMU’s Fred Kiesner Center for Entrepreneurship partnered with Business Consulting Resources, one of the leading family business consultancies in the country, to create a unique program that provides education and community-building opportunities to support its members.
David Choi, Conrad N. Hilton Chair of Entrepreneurship and Faculty Director for the Family Business Entrepreneurship Center at Loyola Marymount University shares his vision for the center and the impact on the next generation of family business owners.
Questions
Why did you start the Family Business Entrepreneurship Center?
I always wanted to. It was in part to support our students and graduates who were in family businesses. But I noticed a very special role that family businesses play in our communities. They think long term and develop personal relationships with employees and members of the community (e.g., community organizations). They keep business sane and remind us that we can care while conducting business.
What is the mission of the Family Business Entrepreneurship Center?
We are a part of a Jesuit university that is always seeking to serve the community. Our goal is to help family businesses (and enterprises) thrive thereby supporting families, businesses, and our communities. We seek to assist family businesses of all types and sizes, and they do not need to have students or graduates from LMU.
Entrepreneurship and starting new companies are usually associated with raising venture capital? What is Family Business Entrepreneurship?
Fundamentally, I think that Entrepreneurship has to do with pursuing one’s dream (for themselves and their family), striving for success, and constantly seeking to transform oneself to be a better person. Entrepreneurship, of course, also has to do with building a great company. Any organization small or large needs to be entrepreneurship to survive and prosper including family businesses. We seek to help family businesses maintain/reinvigorate their entrepreneurial spirit, develop innovative growth strategies, and adopt the most current best practices.
Yes, entrepreneurship can also be about raising venture capital, and I should mention that our Entrepreneurship Program offers a number of great courses on venture capital, and that our graduates have raised hundreds of millions of dollars of it in recent years.
What do you see as the biggest challenges for the next generation of family business owners?
I think businesses in general will face enormous challenges. I am a fan of one of my former bosses, John Kotter of Harvard Business School, and his book Sense of Urgency. A number of factors (e.g., tradition, relationship, bureaucracy) prevent many businesses, but especially family businesses, from operating with the level of sense of urgency necessary. I feel the same way with universities by the way.
Why don’t more families participate in family business education programs?
One reason is the issues mentioned above, the lack of a sense of urgency.
But I think we also need to blame our family business programs. I don’t think we have been as effective in designing the quality curriculum/program for the family businesses.
At LMU, we are working on this. We will figure it out and get better in how we serve our families.
How can we get more families and next generation family business members to get involved in family business education?
It is our job to improve our program and make the case that we can be of service.
What is your five-year vision for the Family Business Entrepreneurship Center?
In five years, we will have built one of the most reputable family business programs in the nation.
We have been figuring things out and have been experimenting, but we are ready to take the next step. We hope to have a strong membership of family businesses really supporting each other and allowing each member to take giant leaps forward.
LMU’s Entrepreneurship Program has a traditional of having built great things. We have already built one of the highest ranked and largest undergraduate majors in the U.S. We have built two graduate programs. We have a leading diverse small business owner development program. Family Business is now one of our top priorities.
LMU Family Business Entrepreneurship Conference
Friday, September 29, 2023
LMU Playa Vista Campus
CLICK HERE FOR MORE INFORMATION
Allen Esrock is the Founder of NxtGen Nexus, a platform for the next generation of family business owners which is based on his experience of growing up in a family business. Prior to that he started Jitter Fingers, the first safe, social networking website for tween girls and their bffs with Jitter Finger clubs in 12+ countries and 250+ cities in the US.
