What do Donald Trump and the Chicago Cubs Have in Common?

Posted by Rock LaManna

What do Donald Trump and the Chicago Cubs Have in Common?

The first answer is obvious: They both pulled off stunning victories in the fall of 2016. The second answer is not: They are both products of successful family businesses. Let’s take a look at why their family business structures work -- even against all odds.

After the Cubs beat the Cleveland Indians in a remarkable Game 7 of the World Series, I had planned on writing a post about the Ricketts family, and the amazing rebuilding job they’d engineered since buying the team back in 2009.

Then Donald Trump stunned the world in the Presidential election. The fact that both victories were made possible via successful family businesses proved that Peter Drucker’s prognostication from 1997 was proven true: The clan is where it’s at.

Peter Drucker’s 1997 Prediction Comes True

Photo Courtesy of Alchetron.com.Photo Courtesy of Alchetron.com.

Perhaps not wise to invoke the word “clan” considering the applause coming from white supremacists following Trump’s election, but my clan has a “c.” And it’s referring to an interview I read in a 1997 Forbes magazine interview with Peter Drucker.

It’s amazing to read through this article today, as much of management guru Peter Drucker’s visions of the future have been realized.

Peter Drucker was a management consultant and author who died in 2005. He wasn’t just any management consultant, however. “In the world of management gurus,” McKinsey Quarterly declared in 1997, “there is no debate. Peter Drucker is the one guru to whom other gurus kowtow.”

“Everything is Built Around Clans”

So what did this writer of exquisite clarity have to say about clans?  Actually, he was referring to Chinese clans. Check out this excerpt from the article:

“ ‘The Chinese are likely to make the family into a modern corporation,’ he said. He predicts this kind of organization will be built around family and regional relationships -- ties that are personal, rather than impersonal, as they are in U.S. business.”

Drucker adds, “Everything is built around clans in which positions of influence or authority are staffed with people whom you can trust because their parents came from the same obscure little villages and because they speak the same subdialect.”

The Trumps, the Ricketts...and the LaMannas

When I read that back in 1997, it always stuck with me. That’s because I hail from a family business. We’ve documented the rise of the LaManna “clan” in this blog before.

Being a child of a family business has given me an inherent understanding of what Drucker was talking about.

I lived it. I saw it. I benefited from it.

That’s because I lived it. I saw it. I benefited from it.

And I saw the same success the LaMannas had repeat itself this fall (albeit in a somewhat larger scale). So why were each of these families so successful? In each case, they adhered to the two-system approach.

The Family System and the Business System

In this blog, family business guru Tom Hubler has explained the “two systems” that make or break a family business.  

The family system is “emotion-based.” It’s oriented towards the security and nurturance of its members. It places a high value on loyalty and protection of the kind, and it operates to maintain the status quo. It resists change, and maintains stability.

What family is all about.

That’s what a family is all about, right? It's the people you can always count on.

The business system is the opposite. It’s “task based.” It is oriented towards production of goods and services. It operates to exploit change in the interest of growth and survival. It’s designed to cope with ever-present change.

As we’ve noted in this blog before, businesses can never stand still. They are either growing or shrinking. Change is inevitable.

The Overlaps That Makes or Breaks the Family Business

Naturally, there is going to be overlap between the two businesses, and it’s not easy. As Hubler notes, “You love, cherish and are connected to each other emotionally and spiritually. Then you have to go down to the office and talk about money and competency.”

What’s critical for a family business is to have set processes and business metrics, so that emotions don’t cloud management decisions.

He recalls the story of a father firing his son for not meeting business expectations. The father delivered the news, based on performance goals. Then he “took off his owner’s hat,” and told his son that he felt terrible that he’d lost his job.

What make a family business work.

Hard stuff. But it’s what makes a family business work. So let’s get to the Ricketts and the Trumps.

Why the Ricketts Got to Fly the W

For a detailed account of why the Cubs were successful, I’ll refer you to this article from the New York Times, written in September of 2014. It accurately details the foundation the Ricketts family was building.

There are several key points to why the Ricketts family was successful.  They adhere to Hubler’s two-system model:

1. Joe Ricketts Didn’t Want the Team

Joe Ricketts is the Ricketts’ patriarch and builder of TD Ameritrade. It was Tom’s dream to buy the Cubs, but he needed his father’s assistance (i.e. cash). But Joe was reluctant - he wasn’t a baseball fan. He wasn’t a fan at all.

Dad was all about keeping the business system separate. So Tom took his father to the game, showed him the sellout attendance (win or lose), and pointed to the packed adjoining rooftops where spectators watched the game.

He made the business case, instead of assuming he was entitled to the family riches. And Dad agreed to the purchase.

2. The Family is Loyal and Respects Their Differences 

The Ricketts Family - photo courtesy of the Chicago Reader.

The Ricketts Family - photo courtesy of the Chicago Reader.

The family makes the management system run because roles are clearly defined. Tom is the hands-on chairman of the Cubs, and his two brothers and sister sit on the five-person board.

The family is remarkably close and loyal to each other -- despite their differing political leanings and sexual orientation. Pete is a staunch conservative. Laura is a lesbian activist and one of the Democratic Party’s top fund-raisers. Todd leads the group Ending Spending, which looks to reduce government spending.

There are differences outside the business realm that could divide the family. But the family accepts their differences, and keeps them well with the Family System.

Trumping Convention: Embrace Change, Follow Metrics

Donald Trump 

I debated quite a bit about writing anything about President-Elect Trump. This is a blog about achieving growth in the printing and print-related industries. It’s not about politics.

However, there’s no denying that Donald Trump has a strong family business. Three of his four adult children are all active in the Trump empire, and they all are demonstrating attributes of a successful business.

There’s also not a lot written about the inner workings of the Trump family, but here’s what I’ve gleaned:

1. A Passion, Not Just a Privilege

The Trumps are fiercely competitive, and focused squarely on business. There’s no coddling. Donald Trump’s father Fred worked constantly, and as a young boy, Donald was told that if he wanted to spend time with his dad, he needed to work with him at the office.

Expectations seem to be just as high for his kids. All of his adult children attended prestigious schools (The Wharton School of the University of Pennsylvania for Donald Jr. and Ivanka, Georgetown for Eric, University of Pennsylvania for Tiffany). Three of the four hold positions in the organization.  

We have no way of knowing how things work within the organization, but it’s obvious Donald trusts his children. We’re not sure if metrics are tied to their performance, as in the Tom Hubler story I related earlier, but my guess is no one gets a free ride.

You may counter with “Didn’t Fred Trump give Donald enormous loans?” Sure he did. But that was his decision to invest in the family business and back Donald’s ventures.

2. Embrace Change With Business and Stability With the Family  

There’s no denying Donald Trump’s acumen for adapting to change. How many executives have used Twitter with the staggering impact of Donald Trump?

I understand there’s quite a bit of showmanship wrapped up in social media, but Trump adapts to the modern day world like no one else.

While I can’t speak to the stability of his family (he’s been married three times), I do see some evidence that he does his best to maintain a sense of stability for his children. Ivanka, for example, converted to Judaism when she married husband Jared Kushner. Donald Trump supported her decision.

Like Hubler said - the business side is for change. Home is for stability.

The Shared Bond Between the Ricketts and the Trumps: Invest in Your Business

There’s little doubt that the Ricketts and the Trumps are risktakers and believe that in order to grow a business, you have to invest in the business.

Both are shrewd at buying businesses at rock-bottom prices, but they also are willing to invest heavily in an enterprise to make it work. The Ricketts paid $845 million for the Cubs. Today the organization is valued at approximately $2.2 billion.

The Trump family continues to expand their empire, with investments beyond real estate, hospitality and entertainment. They’ve ventured out into products ranging from energy drinks to books to mortgages. Always investing, always looking to expand.

Bottom Line: Build a Family Business by Sticking to the Fundamental Law of Two System

I didn’t write this post to inspire angry comments during politically rocky times. I wanted to write about how two family businesses have succeeded against all odds.

Who would have thought the Cubs would win the World Series?

Who would have believed Donald Trump would be elected President?

Why, their families, of course.

By respecting the family and business systems, they were able to succeed. Sure, both Donald and the Ricketts were buoyed by the wealth of their parents. But they adhered to the family business fundamentals.

And that’s why they shocked everyone except themselves.

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Topics: Family Business