Family Guardians

“Our responsibility was to guard that heritage. That’s why we call it co-guardians to look after it and start thinking long-term because our job is to look after it for only a certain period of time. It’s a transition from generation to generation.” - Fred Mouawad

This week, we came across a wonderful podcast worth sharing that highlights the Mouawad Family's global jewelry business (courtesy of @MikeBoyd and the Business of Family Podcast). Most importantly, we wanted to share our thoughts on what helped the family grow over multiple generations to become a world-renowned luxury jeweler with several Guinness World Records. 

A Focus on Adaptability

“It was interesting to see how we had to reinvent our business and reposition it based on where we thought the world was moving towards. It was an exercise of not necessarily innovation but adaptation and being able to forecast how the markets are going to change over the long run and how we should prepare for that change.”

After years of selling multiple product lines across the quality spectrum, Fred Mouawad observed that the market was demanding (and they were best at crafting) luxury pieces, and recognized an opportunity to focus the business on the highest quality pieces. This adaptation to the market trends helped the Mouawad Family cement their brand's image as one of the highest quality jewelers in the world, and has resulted in multiple Guinness World Records.

A Focus on Scarcity

“We have the inventory; we have the expertise. If we create masterpieces and truly craft extraordinary (pieces) and position the brand at the very top, then we should be able to build a very niche business. That would stand in the marketplace and have a very clear image.”

Let's face it, there just aren't that many $55M diamond necklaces or $3.8M handbags out there. The Mouawad family realized that if they focused their business on the top end of the market, there was a natural scarcity of product and very little competition. This scarcity of product led to both strong pricing power and brand recognition over time.

A Focus on Continuity 

“I think it’s all about preparing the next generation to be the right stewards for the organization and how do you get there? You get there by exposing them to the business, by having them get richer with experience. By exposing them to different elements in the business and outside the business.”

To ensure that a business transitions smoothly from one generation of leaders to the next, Fred Mouawad helped his family's business draft a living constitution for the family enterprise. In this document, the 'guardians' of the business recorded decision-making procedures for approval of key initiatives and created checks and balances that will serve as a guide to the business's operations for future generations. To ease the transition from one generation to the next, the 'guardians' expose younger members of the family to the business at an early age to allow them to learn the business from the ground up.

Family businesses can be very difficult to maintain over multiple generations, but Fred Mouawad is a great example of how family leaders can position their enterprise for longevity, flexibility, and continuity through attentiveness to market trends and leadership training of the next generation. We love stories like the Mouawad Family's, and strive daily to build our family of businesses by partnering with organizations that take a similar long-term approach to business success and longevity. 

Big-box stores, worried about Amazon, were ready for coronavirus (Wall Street Journal)

+ "Several factors tie their success together. These big companies had already invested to build their online businesses and had cash on hand to adjust to the pandemic. They were selling what people were buying and had large supply networks they could tap to eventually restock. In addition, most were deemed essential retailers early in the pandemic and thus have largely remained open. When the coronavirus surfaced in the Raleigh-Durham area this spring, Target stores were ready for the sharp increase in online orders. Most had already allowed shoppers to pick up items in parking lots. All had staffers in back rooms packing up orders."

Fred Mouawad - billionaire diamond owner & 4th generation co-guardian (The Business of Family)

+ This is an episode worth listening to for its clarity of thought around family business continuity. 

What happens to freight rates in a pandemic? (Supply Chain Dive)

+ "Spot rates in the trucking market hit their lowest point in April, down around 25% year over year. Since then, "we've seen quite a dramatic turnaround in rates," said Avery Vise, VP of trucking research at FTR, adding that rates are rising at a time when they usually trend downward. Trucking rates will typically fall throughout the summer until the holidays. Spot rates were up 10% year over year in July and have continued to trend upward, according to DAT. "I think it is likely to moderate," Vise said. "But it quite possibly will still hold much higher than certainly we thought it would just a couple of months ago.""

Meet the “menu engineers” helping restaurants retool during the pandemic (The Hustle)

+ "You’d be hard-pressed to find many people who have thought more about restaurant menus than Michele Benesch. In 1968, her grandfather, Walter Baker, started Menu Men, Inc., a creative consultancy that specializes in infusing menus with fanciful designs. At the time, says Benesch, the art of the menu was largely neglected. Sensing some room for disruption, Baker convinced restaurateurs to invest in fully customized designs."

6 small steps for handling the emotional ups and downs of work (First Round Review)

+ "Maybe you’re a founder shouldering the heavy load of steering a company through a global crisis. Or a marketer tasked with pivoting to virtual events. Or a manager struggling to support your team through a tumultuous time while simultaneously trying to cultivate healthy remote habits. Or more universally, you’re facing an everyday struggle to navigate a chaotic outside world and an upended life at home, which serves as the backdrop (and now Zoom background) for your work. Whatever the case, every emotion you feel sits beside you at your desk — whether you realize it or not."

Alternative forms of wealth (Morgan Housel)

+ Morgan Housel offers a variant perspective on what 'wealth' can look like for each of us during tough times.

How Saudi Prince Sultan bin Turki II 'disappeared' (Vanity Fair)

+ "Prince Sultan bin Turki II was cut off from the Saudi royal family’s cash flow after criticizing the regime. So he appealed to Prince Mohammed bin Salman for help—and was never seen again."

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