Family Business Blog
Aug 26, 2011
The Smorgon Family Story
I recently attended the Mindshop Australia National conference and as usual there were many interesting and thought provoking presentations. From a family business perspective, the highlight was a key note address by David Smorgon, a member of the iconic Smorgon family business and inaugural chairman of Family Business Australia.
David’s address titled ‘The Ingredients of Success’ related the Smorgon family story which started when the family left Russia in 1927 to settle in pre-depression Melbourne. He spoke of his introduction to the family business and its traditions and in particular the family’s powerful culture. This included daily round table meetings of all family members involved in the business.
Some of the important lessons he learned included –
1. The importance of communication - family members of all ages met daily2. The need to have an opinion and to be able to express it in a constructive manner3. The importance of teamwork and respect for other people’s views
David also Spoke about 'The Smorgon Way’ – the values that encapsulated the way the family did business. These included –1. Two heads are better than one2. Everyone has the right to be heard in a non-threatening way3. The truth will be told4. Our word is our bond5. The needs of the customer come first6. There will be no surprises – put uncomfortable issues on the table7. Promote teamwork and leadership8. Be proactive corporate citizens
The development of family values is at the foundation of all strong family businesses. An insight to those of this powerful family may give you a starting point to commence the development of your own family values.
David spoke with considerable passion about the ‘death of the dynasty’, which occurred in 1995 when the seven families that comprised the Smorgon Group decided to go their own ways. The key factors that he attributed to the decision to break up the group were –
Sixteen years after the event, David’s pain at the dissolution of the family business is still evident. Comments such as ‘I was devastated’, ‘we had something special’, ‘I had dreamed that my three boys would be part of it’, indicated the depth of feeling.
David concluded with some key messages –
1. ‘the only times that success comes before work is in the dictionary’2. the power of persistence3. the critical role of communication in a family business
David’s address titled ‘The Ingredients of Success’ related the Smorgon family story which started when the family left Russia in 1927 to settle in pre-depression Melbourne. He spoke of his introduction to the family business and its traditions and in particular the family’s powerful culture. This included daily round table meetings of all family members involved in the business.
Some of the important lessons he learned included –
1. The importance of communication - family members of all ages met daily2. The need to have an opinion and to be able to express it in a constructive manner3. The importance of teamwork and respect for other people’s views
David also Spoke about 'The Smorgon Way’ – the values that encapsulated the way the family did business. These included –1. Two heads are better than one2. Everyone has the right to be heard in a non-threatening way3. The truth will be told4. Our word is our bond5. The needs of the customer come first6. There will be no surprises – put uncomfortable issues on the table7. Promote teamwork and leadership8. Be proactive corporate citizens
The development of family values is at the foundation of all strong family businesses. An insight to those of this powerful family may give you a starting point to commence the development of your own family values.
David spoke with considerable passion about the ‘death of the dynasty’, which occurred in 1995 when the seven families that comprised the Smorgon Group decided to go their own ways. The key factors that he attributed to the decision to break up the group were –
- The loss of trust and respect within the family
- A poorly managed succession process and
- The different attitudes and values of the younger generation
Sixteen years after the event, David’s pain at the dissolution of the family business is still evident. Comments such as ‘I was devastated’, ‘we had something special’, ‘I had dreamed that my three boys would be part of it’, indicated the depth of feeling.
David concluded with some key messages –
1. ‘the only times that success comes before work is in the dictionary’2. the power of persistence3. the critical role of communication in a family business
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