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The Interview

Lessons from a legacy: Keeping business and family in balance to create a multigenerational enterprise

14 January 2025 • by Peter Vogel in The Interview

In conversation with IMD's Peter Vogel, Bruce Grossman, a fourth-generation family business owner, discusses his achievements and shortcomings in creating frameworks to unite the family business....

Fourth-generation family member Bruce Grossman tells IMD’s Peter Vogel about his successes and failures in establishing structures to unify the family enterprise and the lessons he hopes the next generations will take from the experience.

In the late 19th century, Bruce Grossman’s great-grandfather, a German immigrant to the United States, caught wind of a booming mining industry in Mexico. Just like the savvy entrepreneurs of the Californian gold rush, Leo Fleishman saw gold not in the mines, but in selling provisions to the miners. He moved to Zacatecas and, with a partner, began hauling water to the thirsty workers — a venture that would lay the foundation for a remarkable legacy.

Fleishman transitioned from water to soft drinks, founding La Pureza in 1912. Recognizing the rising popularity of Coca-Cola in the United States, his son HH Fleischman proposed they secure the rights to bring it to Mexico. A trip to Atlanta later, they had the permit and established Mexico’s first Coca-Cola plant. From then on, they bottled soft drinks and flavored water, catering to the influx of foreign oil executives.

The company continued to expand, and in the 1950s, Grossman’s father, who was a thriving advertising executive in the United States, was offered an equity stake in his wife’s family business. The family relocated to Tampico, where Burton Grossman worked alongside his brother-in-law. However, as time passed, tensions grew between Fleischman’s son, the expected heir, and his son-in-law, who showed greater interest and aptitude for running the company. After discussing it with his wife, Fleischman made a bold decision.

“My grandfather decided to split the business,” explains Grossman. “Half went to my parents, and the other half to my uncle and cousins. From there, everyone had their own trajectory.”

Grossman’s father ran his side of the business with tremendous discipline, establishing governance and structure as if it were a publicly traded company. This foresight paid off when the company was listed in the 1970s, securing a “Mexican identity” amid rising hostility toward foreign firms.

The company has since grown through a series of mergers and acquisitions into Arca Continental, Latin America’s second-largest Coca-Cola bottler, with operations in Mexico, Argentina, and Ecuador. In 2017, it expanded into the US by acquiring Great Plains Coca-Cola Bottling Company, which operates across Texas, Oklahoma, New Mexico, and Arkansas.

The 'no-family rule' not only reshaped how they operated but also pushed family members to follow their passions.

The ‘no-family rule’

Over time, the family shifted from managers to owners, enforcing a ‘no-family rule’ that bars family members from working in the business, though they can still serve on the board.

“I believe that having no family running day-to-day operations in the business was one of the most important decisions taken by my grandfather,” says Grossman. “We had to learn that our major decision-making powers had to consider all the families and people that were working for us. The way we treated people.”

He fondly recalls visiting a bottling plant with his grandfather at age seven or eight, watching him greet every employee and ask about their families on the way to his office. “We still do that today,” says Grossman. “I am 100% sure that when families show up in their factories and do a visit with the people that are cleaning the floor, this is how people come to respect you. We earn that every day. We need to have the people know that we respect them and that’s one of our cultural things.”

The no-family rule not only reshaped how they operated but also pushed family members to follow their passions. Grossman took a dual path, launching a consultancy to manage others’ wealth while also founding Mexico’s Family Business Network, which ran programs for over 15 years until he had exhausted his Rolodex.

Determined to preserve the knowledge gained, Grossman co-founded the Family Business Center at the University of Monterrey, dedicated to tailoring family business strategies to the Latin American context.

“My sister suddenly said, ‘We’re out. My husband, children, and I. Goodbye.’ We knew we had to let them go. No one begged them to stay. We allowed it”

The creation – and dissolution – of the family council

After Grossman’s father passed away, he aimed to reunite the dispersed family. Following the textbook approach, they hired consultants to establish a family council and constitution. This strategy worked smoothly for 10-12 years, until one day at a beachside gathering, the advisor asked how everyone was feeling.

“My sister suddenly said, ‘We’re out. My husband, children, and I. Goodbye.’ We knew we had to let them go. No one begged them to stay. We allowed it.”

Though the rest of the family decided to continue, the cracks had formed. A few years later, they stopped the gatherings. “To me, that was a failure,” Grossman admits. “I didn’t sell the vision. But I had to let it go – you can’t force people to stay. They have to want it.”

His hope is that the fourth and fifth generations will revisit the idea of a family council someday. “Now they have their own little bailiwicks to worry about – grandchildren, cousins, spouses. They’ll need to figure out how it all works. So why not experiment together?”

Grosmann’s grandson, Blake, believes that as the sixth generation comes of age what unites them is a commitment to continue the legacy of philanthropy and impact

Taking a back seat

There are signs that the family is warming up to the idea. Grossman, with his son, daughter-in-law, and grandson, attended a learning program at IMD. 

Although the family council failed, Grossman’s son Brett says it still changed the way he thought about raising his children and focusing on entrepreneurship. Now he’s thinking about how to bring these ideas back into the family business and have a bigger impact. “We’ve taken a lot of the lessons, and my family is ready again to revisit the concepts.”

Grosmann’s grandson, Blake, believes that as the sixth generation comes of age what unites them is a commitment to continue the legacy of philanthropy and impact.

“We invest in the future and a lot of it is thinking: ‘How do we keep this going until the eighth generation or the 10th generation?’” says Blake. “That’s a priority for us. Seeing how we can make an impact on the world through our investments, through the funds that we are really privileged to be able to access and allocate so I think that’s a really important mission that we will 100% continue.”

A visibly emotional Grossman knows it’s time to step back and let his family find their own way. “What I don’t want to do is to try to take the lead in all this. Because if it’s coming from them, then they’re going to be buying into the process.”

Though there may have been disagreements over the approach in the past, Brett says it laid the foundation for future generations. “We’re a family first in terms of how we treat each other. We may disagree on some issues but at the end of the day, we all share a common ancestry in a common heritage that has given us amazing gifts.” 

Expert

Bruce Grossman

Fourth-generation family business member in Arca Continental

Bruce Grossman is a fourth-generation family business member in Arca Continental, a Mexican bottling company ranked as the second-largest Coca-Cola bottler of Latin America and third-largest worldwide. He founded the Mexico chapter of the Family Business Network (FBN) and has been very active over the last decades in sharing his expertise in family business governance and ownership, and helping other enterprising families. He is also an alumnus of IMD family business programs Leading the Family Business and Navigating the Family Enterprise. In 2024, Bruce Grossman and the Grossman family joined the IMD Global Family Business Center Circle of Benefactors.

Authors

Peter Voegel - IMD Professor

Peter Vogel

Professor of Family Business and Entrepreneurship at IMD

Peter Vogel is a Professor of Family Business and Entrepreneurship, Director of the Global Family Business Center (GFBC), and Debiopharm Chair for Family Philanthropy at IMD. He is Program Director of Leading the Family Business, Leading the Family Office, and the Lean Intrapreneurship program. He is globally recognized as one of the leading family business educators, advisors and academics, has received numerous awards and recognitions and is the author of the award-winning books “Family Philanthropy Navigator” and “Family Office Navigator”.

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