- Maintaining a family business let alone a cross-generational legacy is a challenge not many can say they overcame.
- In order to maintain their family's wealth, the Hixon family had to invest in not just the business, but in themselves as well.
- Find out how Frank Foster engaged the next generation of Hixon family business owners to ensure their legacy and wealth continue.
Conventional wisdom and statistics contend that most families accumulate and lose their wealth within three generations. The Hixon family, however, defies the odds — and not by accident. The family’s story began 160 years ago when Gideon Hixon got his start in the lumber business. His success led to an investment in Aircraft Marine Products (AMP), which eventually grew into one of the largest electronics companies in the world.
The family came to a crossroads in 2002, after the stock of Tyco, the company that had purchased AMP, took a dive. With the family assets at risk, the Hixons needed to decide whether they wanted to stay in business together or sell what remained and disperse. Frank Foster, Chairman of Hixon Properties and Managing Partner of the Gideon Hixon Fund, says the decision illuminated the need for the family to work more closely and intentionally with its younger members.
“I realized that we would need to double down on the development and training of our next generation if we wanted the Hixon family legacy to make it to a sixth or greater generation,” Frank says. The family's innovative approach not only ensures the continued success of the Hixons but also provides a road map for other families who want to prepare the next generation for their future.
Hunter Turpin, a fifth-generation Hixon, is an example of how that intentional shift in mindset has elevated the trajectory of the family. “A lot has to come together for this type of story ... it’s very much a group effort, a cross-generational process and whole systems approach,” Hunter says. “I was given a shot to learn about myself and the family and family enterprise in a supportive environment where everyone’s unique makeup was valued and appreciated and given room to grow and evolve.”
A risk not worth taking
It’s difficult for families to create and sustain wealth over generations. But to stop the pattern, you must understand why. Research shows that 60% of wealth transfer failures occur because of a breakdown in family communication and trust. Heirs that are unprepared for the requirements of their role and the related accountability make up another 25%. Families who succeed over the long term also take a broader view of wealth beyond the financial component — incorporating human, social, legacy and intellectual capital into their assessment of the family’s overall wealth.
Frank witnessed some of this firsthand as he helped his family navigate the decision of whether to sustain the family businesses in the face of a crisis. “I saw a generation that had become too reliant on the status quo and needed to improve its capability to make financial decisions under pressure that would affect the long-term legacy of the family,” he says.
He realized that simply hoping that the next generation would acquire the skills and knowledge they needed to help preserve the family’s legacy was too risky. “The stakes are too high if you leave it to chance, and the consequences of sink or swim are not good when they sink,” he says. Instead, the challenge ahead demanded an intentional strategy, one that may remind many of the professional development programs aimed at training up-and-coming leaders in successful organizations.
Leveling up the next-gen
The Hixon family approach requires effort and commitment from both the younger and older generations — each learning from and teaching the other. For instance, Frank created multiple programs for family members in their 20s, providing education and skill development related to the family business and general professional improvement. “I personally offered any young family member who had graduated from college the opportunity to work for me in the Gideon Hixon Fund, the family’s venture capital company,” he says. The family members received training, learned fundamental business skills, and gained exposure to the decisions and communications involved in leading a family-owned organization.
Just as importantly, Frank created a venue for family members under 40 to meet annually, to learn and ask questions about the family’s history and ventures. Called the G-5 Summit in reference to the fifth generation, these annual meetings last a weekend and give the rising generation a chance to interact with each other and with the young management of the company, along with “more freedom to learn and ask questions without the scrutiny of their parents,” Frank says. He notes that it’s also important to teach younger family members the language and concepts relevant to the family business so that when they do attend meetings, they can participate.
The programs developed by Frank caught the attention of Hunter. His quintessential California childhood had centered around surfing, skateboarding and the beach — and it felt worlds away from San Antonio, TX, where Hixon Properties, the core of the Hixon family’s business interests, is headquartered. Still, Hunter felt a deep connection to the family — he just wasn't initially certain how he fit in. “Being a member of the Hixon family was always something that I was proud of, and I knew it was a special thing, although in what ways, I wasn’t quite sure,” he says.
Then Hunter heard Frank giving an update on the Gideon Hixon Fund at the big Hixon family meeting (it occurs every three years). “It was exciting, relevant and entrepreneurial, and he framed the presentation in a way I could understand and relate to,” Hunter says. He instantly recognized that there was “an opportunity I should be taking advantage of.”
Elevating through the journey
Hunter worked with Frank in a specialized associate training program at the Gideon Hixon Fund for a year after he graduated college. The experience helped him figure out his own goals for the future and how best to integrate himself in the family business, while still staying true to who he was.
The opportunity to work in the Fund, be mentored by Frank, and continue to learn more about both the business and the family proved invaluable. Hunter developed professionally and realized that he could be both — himself and a Hixon. “I was able to elevate my self-esteem along with my own sense of capability and agility without sacrificing who I was at my core, or where I came from,” Hunter says.
Through the process, he also established new bonds, strengthened existing relationships with cousins and built deeper connections with the senior generation members. During the G-5 Summits, he and other fifth generation Hixons conducted site visits, walked through real-life case studies of the Hixon Properties business, and forged lasting relationships with company management.
Investing in the family's future
The results of the Hixon family efforts are already paying off. Hunter, as an example, received his MBA from Pepperdine’s Graziadio Business School, has served as an advisory director on the Hixon Properties board, currently serves as an advisory partner with the Fund and was recently nominated to serve as the family’s next Shareholder Communications Officer. He says the family’s renewed focus on proactive communication has been essential in garnering the rising generation’s involvement.
He is one of 13 family members to complete the internship program, and one of more than 25 who have participated in other educational programs. It’s a far leap from 22 years ago when Frank worried whether the family’s legacy would last. The program has been so successful that the family is now working with Pepperdine and the Graziadio Business School to create the Legacy Center for Next Generation Leaders, which will offer an innovative, fully accredited Master of Science degree in Family Enterprise designed to help next-gens develop the business understanding, professional skills and personal characteristics to succeed as stewards in a family enterprise context.
“The transition is smoother than we ever could have hoped because we have a group that has been given the knowledge and understanding to earn the trust of the older generation,” Frank says.
The Hixon family is an inspiring example for other families looking to create a road map to skillfully steward the full family capital: human, intellectual, legacy, social and financial. For additional insights on what actually works, see 8 Insights From Long-Lasting Global Enterprising Families, a series based on the research of Dennis T. Jaffe, Ph.D. of over 100 long-term successful families of wealth, published in partnership with First Republic’s Family Engagement and Governance Team.
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