When Marygrace Sexton named her local fresh-squeezed juice company after her 1-year-old daughter, she never expected Natalie to become her eventual CEO successor.
Decades years later, Natalie’s Orchid Island Juice Company brings in $120 million in annual sales, according to Natalie Sexton, 34 — who is now the company’s vice president of marketing, and preparing to take over whenever Marygrace, 65, decides to step down.
Amid the Fort Pierce, Florida-based company’s growth, the Sextons have spent years struggling with the complications of running a family business, even acknowledging it in a New York Times article back in 2016.
That story referenced a “second-generation curse,” citing a 1980s study: Only 70% of family businesses survive the transition to second-generation successors, and just 13% make it through the third generation.
The lifespans of all business types have declined since the 1960s, according to a 2012 report from management consulting firm Infosight. The problem may be particularly severe at family companies, where the founders can be more dedicated to building a business that lasts generations than their successors.
Succession is hard to execute, as illustrated by the HBO show. The next generation may not be interested or prepared enough to take on the responsibility, or see value in cashing out by selling the company.
The Sextons say they don’t want to fall victim to the statistics.
“It’s truly a fascinating concept to try and maintain a family business as you change generations,” Natalie tells CNBC Make It. “It’s definitely something that’s complex, but there’s tremendous opportunity with it as well.”
Making the next generation prove herself
There are stereotypes about second-generation business owners, Natalie says: “Sometimes the second generation can 1) be entitled, 2) not have the same work ethic, and 3) not be as mindful of how to grow the company from a financial standpoint.”
Natalie joined the company in 2012, a year after graduating from Winter Park, Florida-based Rollins College with an economics degree. Her uncles, who are also executives at the juice company, were initially resistant to letting their young niece help run the show, says Marygrace.
Initially, Natalie pushed for big digital marketing, rebranding and scaling plans. Marygrace and other family colleagues pushed back, skeptical that the brand’s personality could ever be authentically conveyed online and wary of the company no longer feeling like a local business.
Natalie ultimately found ways to incorporate digital marketing into the company’s grassroots approach, helping grow its annual sales by nearly $100 million since 2011, she says. And while Marygrace is still adapting to the idea of having such an online presence, she says she trusts her daughter’s gut.
″[My brothers] have to learn to trust that [Natalie] is going to make good decisions even though she’s brand-new, right out of the gate,” Marygrace says. “I knew in my heart that she had it in her, so I never questioned that.”
Finding competitive advantages at a smaller company
When Natalie graduated college, Marygrace remembers multiple people telling her that her daughter should find a job at a large corporation if she really wanted to learn business skills.
“That’s a myth that I think people need to get over,” Marygrace says.
Natalie’s Orchid Island Juice certainly isn’t small, but it competes with billion-dollar brands in a multibillion-dollar market. The U.S. bottled juices market generated roughly $8.7 billion in sales last year, according to market research firm Circana.
People also tend to view family-owned businesses as somewhat scrappy and therefore inadequate training grounds for company leadership, Natalie says.
To the contrary, Natalie says she’s received a “more holistic” business education because the smaller scale of the company allows her to work in every department. On top of her full-time marketing role, she is an acting sales executive and regularly helps with financial management, production and product development.
Her marketing counterparts at other companies may not receive the same well-rounded training, Natalie says: “They know marketing and sales, and that’s it. They don’t really know the ins and out of production or efficiencies.”
Using family feuds productively
Bobby Sexton, Marygrace’s husband and a Florida citrus farmer, used to discourage hiring family and friends. He wanted to avoid all the messiness that comes with blending business with the people you love.
Those potential pitfalls include nepotism, non-family employee exclusion, groupthink and fatigue from living and working with the same people, just to name a few.
The juice company isn’t immune to family feuds. Natalie has clashed with her uncles. Marygrace and Natalie butt heads on company strategy.
Those same family spats can also be a hidden advantage, Natalie says. Disagreement, when conveyed correctly, boosts productivity, experts say — and the Sextons’ familiarity with each other helps them communicate directly, rather than mincing words in the interest of corporate etiquette.
The Sextons also prefer communicating face-to-face, says Marygrace. That’s another proven way to communicate and disagree more effectively, research shows.
Navigating family dynamics while running a business takes extra “focus,” but comes with “a lot of benefits” when executed correctly, Marygrace says. Those include a unique level of trust with her colleagues, which she hopes will prove valuable when she passes her CEO role to her daughter.
“I always trusted Natalie, because I just have known Natalie all her life, and I just knew who she was,” she says.