The document summarizes a presentation on the role of the CFO in a family business. It includes perspectives from Dann Van Der Vliet on communication and governance in family firms, founder Nord Brue on how the CFO can help grow, sustain and sell the business, and Lawrence Writer on the complexities of working for a family business as both CFO and COO of Louisville Slugger. Key topics discussed are the importance of the CFO providing objective financial strategies and analysis, effectively communicating the business story to stakeholders, and asking questions around shareholder alignment, succession planning and accepting the complex dynamics of a family-run company.

1. Surviving and Thriving in the
Family Business
What the Family Wants You to
Know…
and DO to succeed as their CFO.
CFO Playbook
October 28, 2013

2. Agenda
Dann Van Der Vliet – University of Vermont
•
The family business system
•
Contributions of the CFO to a family business
•
The two priorities: Communication and governance
Nord Brue – Founder of Bruegger’s Bagels
•
Role of CFO in growing, sustaining and selling the business
•
Where I needed my CFO the most
•
What I wish my CFO knew that I never (or couldn’t) told them
Lawrence Writer – Louisville Slugger
•
Louisville Slugger story – why have they endured?
•
Complexities of working in a family business
•
What I wish I knew from the family members

3. Perceptions…

4. Issues “most on your mind”
• Incentive compensation
• Board effectiveness
• Keeping family shareholders informed
• Sustaining the business
• Updating arcane business practices

5. Understanding Family Business
Original research suggested two separate and competing entities TWO CIRCLE FRAMEWORK
Family
Issues
Business
Issues

6. Understanding Family Business
In time, research suggested the two entities overlapped
Family
Issues
Business
Issues

7. Understanding Family Business
Eventually, researchers realized that ownership was its own circle –
THREE CIRCLE FRAMEWORK
Ownership
Family
Business

8. The Three Circle Model
Ownership
2
4
5
7
Family
1
6
Business
3
Taiguri & Davis 1993

9. Three Circle Model
1. A family member who is neither an owner nor an employee
2. An owner who is neither a family member nor an employee
3. An employee who is neither an owner not a family member
4. An owner who is a family member but not an employee
5. An owner who is an employee but is not a family member
6. A family member who is an employee but not an owner
7. An owner who is a family member and an employee

10. Two key priorities in a family business
• Communication
• Governance

11. Communication can be
enhanced by giving each circle its
own governance structure.

12. Adding value
Source: Gurd & Thomas 2010

13. Adding value
Source: Smith & Briggs 1999

14. Adding value
Source: Strike 2013

15. Nord Brue
Founder, Bruegger’s Bagels

16. The Owner’s Perspective
Role of CFO in growing, sustaining and selling the business
•
Know where the enterprise is (at all times)
•
Know the trajectory of enterprise
•
Create financial strategies to improve trajectory
•
•
•
Financial Strategies a la McDonalds
Capital Structure Strategies ala Marriott
Tell story of the enterprise to financial world
•
Shareholders
•
Bankers
•
Potential investors/Buyers
•
Other parties as appropriate
•
Be credible teller of enterprise story
•
Act as consigliere to CEO

17. The Owner’s Perspective
Where I needed my CFO the most
•
On my flank
•
In a spot to create objectivity
•
•
Close enough to know;
•
•
It’s hard to check your own work
Far enough to stay out of weeds
In a position of “emotional neutrality”
•
Sales chief can be cheer leader
•
Operations can be apologist
•
Need the straight dope from the CFO
•
Garrison Keillor “He’s Steady”s

18. The Owner’s Perspective
What I wish my CFO knew that I never (or couldn’t) tell them
If there is something you can’t tell your CFO
•
•
•
You are doing things you shouldn’t be doing
Your CFO is not “up to speed”
You’ve got the wrong person in the CEO slot

19. Lawrence Writer
CFO & COO

20. Company History

21. Company Overview
Founded in 1884
Signed Honus Wagner in early 1900’s – First Sports Endorser
~80% of Hall of Famers used Louisville Slugger – Babe Ruth, Ted
Williams & Ty Cobb among them.
~55% of today’s professional players still use Louisville Slugger

22. President
Cleveland
President
Roosevelt
World War II
First PC
World War I
Mark Twain
First Automobile
Wright Brothers
Television

23. What we are today
BBCOR
Gloves
Fast pitch
Slow pitch
Protective
Leading provider of Diamond Sports Equipment

24. Fresh thinking: ideas to execution

25. Fresh thinking: ideas to execution

26. Why does a 130-year old company need to change?
Hyper-competitive landscape
Competition with deep pockets
Regulation – Standard changes, lawsuits
Innovation – Product is King
Marketing – How do we remain relevant?
Growth – What is next?
Goal: ignite the power of LS

27. We believe that lasting greatness is only achieved by living
the values of team sports; driven by sportsmanship, hard
work, and dedication.
We believe that confidence is the most valuable tool you
REMOVE bring to your game.
We believe working with elite athletes leads to the creation of elite
products.
We believe that we have a responsibility to grow and
protect the legacy of Louisville Slugger as a American
icon.
Louisville Slugger
exists to make players
great
We activate the power of
Louisville Slugger to ignite
an emotional connection to
our brand and the game.
Fresh Thinking: Ideas to execution.
We design and market
performance sports
equipment
27

28. Working for a family business
Questions to ask:
Shareholder interests aligned?
Acceptance?
Wealth creation?
Succession planning?

29. Follow up
Dann Van Der Vliet
Daniel.VDV@uvm.edu
@fambizsuccess
Nord Brue
nlb@nbrue.com
Lawrence Writer
Lawrence.Writer@slugger.com