Ken Natori of The Natori Company: 5 Things You Need To Run A Highly Successful Family Business

As a part of our series about 5 Things You Need To Run A Highly Successful Family Business, I had the pleasure of interviewing Ken Natori.

Ken Natori is the President of The Natori Company, an East-meets-West designer fashion brand, which sells globally through high-end department stores and on its flagship website at Natori.com. Ken joined Natori after careers in broadcast journalism and on Wall Street, and after earning his MBA from the Stanford Graduate School of Business. He lives in New York with his wife, two children, and the family’s new COVID puppy, Stevie Nicks.

Thank you so much for joining us in this interview series! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?

For most of my life, I was committed to establishing my own career path and forging my own destiny, never thinking about joining the family business. My dream growing up was to be an anchor on “SportsCenter,” so my initial career path took me to an internship at Bloomberg, which led to an on-air position as the reporter from the floor of the New York Stock Exchange. After five years of broadcast journalism, business school, then another career on Wall Street, I recognized the value in being able to help craft a company’s future, which led me to join the business.

Can you tell us a bit about your family business and your role in it?

We design fashion with our signature East-meets-West aesthetic. While we are most known for our core categories of sleepwear, bras and underwear, we have been actively expanding into a lifestyle brand by adding collections in everything from clothing, home textiles, legwear and fine jewelry to recent/pending launches in shoes, men’s loungewear and underwear, swim, scrubs and dog apparel. I have served as President since 2016 and focus heavily in our digital and licensing businesses, along with our finance and operations. I also remain committed to making sure our organization remains aligned with our core values.

Can you share the most interesting story that happened to you since you began this career?

My past career as a broadcast journalist at Bloomberg TV and Radio has been both helpful to sharing our story and fun for me personally. In 2013, I hosted a four-hour show on Bloomberg Radio called “Titans of Retail,” where I interviewed 14 of the retail industry’s most influential CEOs live on air. It was a successful show, and frankly, I really enjoyed being able to mix my passion for Natori with my inherent love of broadcast journalism. I enjoy continuing to go on air to promote our company and provide insight on our industry as much as possible.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

I started out by addressing my mother as “Mom” in group emails. That made people uncomfortable. I quickly switched to her initials — “JCN.”

What do you think makes your company stand out? Can you share a story?

We stand out by being true owner-operators where the family (including the founder) remain very hands on with all parts of the business. We have been fortunate to have secured a number of new partnerships in the last year, and the underlying theme is that all of our partners wanted to work hand-in-hand with a brand that had its key operators involved and accessible.

Are you working on any exciting new projects now? How do you think that will help people?

We remain committed to expanding Natori’s reach through product, distribution and geography. While many people today mostly associate us with our signature sleepwear, bras and underwear, our goal is for people to soon identify Natori as a global East-meets-West lifestyle brand across all categories. In addition to our flurry of launches this year, we are actively looking for partners in categories such as handbags, accessories and children’s clothing.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

I am most grateful not to a person but to a group of people. On a quest for more guidance on leadership, I joined the Manhattan chapter of YPO in 2016. Prior to joining, there were many business issues that I internalized, not out of choice, but because I didn’t have an appropriate outlet from which I could get feedback on sensitive or confidential issues. Since joining YPO, I have developed an integral network of colleagues and friends who have provided critical support for all aspects of my business and life.

How have you used your success to bring goodness to the world?

We established “Natori Gives” a few years ago to provide context to our charitable efforts as a company and family. To be honest, we never previously felt it was appropriate to publicize who we aligned with, but we now recognize how much customers want to know what brands stand for. The mission of “Natori Gives” is to support organizations that empower and educate women around the world, and we are happy to align with a number of great organizations that push forward that agenda.

Ok thank you for that. Let’s now pivot to the main parts of our interview. How do you define a family business? How is a family business different from a regular business?

A family business is one that is owned and led by a family (no need to pay me for that deeply insightful answer). Family businesses are more likely to prioritize values, loyalty and long-term strategy over short term profitability. If successful, a family business’s culture should emulate the values of the operating family.

In your opinion or experience, what are the unique advantages that family owned businesses have?

Because of a greater emphasis on values and longevity, family businesses are more inclined to have cultures that feature loyalty and dedication. Relative to non-family businesses, EQ is more prioritized (as opposed to IQ), which can lead to a more functional and compassionate work culture.

What are the unique drawbacks or blindspots that family owned businesses have?

Leadership being more ingrained and protected at family businesses can lead to a reduced level of accountability and consequence. Learning from mistakes can be more of a choice than a requirement. Furthermore, family businesses that don’t create effective channels for all forms of employee feedback can feature a reduced sense of employee buy-in and commitment.

What are some of the common mistakes you have seen family businesses make? What would you recommend to avoid those errors?

The biggest mistake I see family businesses make is to bring in family members too early. To the degree my time at Natori has been successful, it has been so because of the careers and education I had prior to joining the company. Logging hours and succeeding outside of the business is important to everyone: the employees, who can see the joining family member is bringing relevant skills and experience to the job; existing family operators, who don’t have to spend time or capital making up for a younger generation’s inexperience and/or incompetence; and most importantly, the joining family member, who can have confidence that his/her joining the company is due to merit, as opposed to lineage. Giving a family member responsibility that he or she isn’t ready or qualified for can often be a lose-lose-lose to all parties.

What advice would you give to other CEOs or founders of family businesses to help their employees to thrive?

I have done my best to nurture employee buy-in on strategy, culture and operations as much as possible. Family businesses can go in one of two directions. On one hand, they can feature a hierarchy where all decision-making, accountability, and risk-reward live with a small number of people. Such a culture can make employees feel unheard, unimportant and worst, disinterested. We have recently tried to push things in the opposite direction, where we focus on communication, feedback and collaboration as we shape our future strategy. Our hope is that this effort has led to a greater sense of employee engagement and commitment. Family businesses are prone to both extremes, and operating families can help steer in which direction their company leans.

How do you define “Leadership”? Can you explain what you mean with a story or example?

This is harder than the “How do you define a family business” question. I think leadership is inspiring people to act, behave and operate in the best interest of the company, not by force, but by example. The great business leaders are ones that employees want to emulate on their own, as opposed to being forced to follow out of necessity or by mandate.

Here is our main question. What are the “5 Things You Need To Run A Highly Successful Family Business”? Please share a story or example for each.

1. A collective wide range of skills, interests and methodologies. While theoretically cut from the same cloth, my mother and I (the two family members at the company) are polar opposites in terms of process vs. impulse, planning vs. improvisation, and left-brain vs. right-brain. (I am the former in all three). That said, because we are so different on a number of fronts, at least one of us is almost always able to address/relate to any kind of issue, question or piece of feedback. Spanning this wide range of approaches, interests and methodologies helps us collectively address almost anything.
2. Boundaries — Boundaries … are good. My mother and I (as I’m sure many operating family members do) have our share of disagreements and are comfortable highlighting and discussing these issues, sometimes candidly. That said, we also recognize, identify and acknowledge certain issues that are “off limits” for each other due to their importance, where we will allow the other to “win.” At the end of the day, all family operators need to figure out how to keep the peace.
3. A company culture that reflects family values — Operating family members have to prioritize making sure their business reflects their values. Nothing is more important, including workplace productivity. At the end of the day, operating family members will be identified with the culture of their workplace and how team members do business on behalf of the company. For us, reputation and culture always end up taking priority.
4. Give employees career paths — One danger of a family business is that non-family members may feel limited in terms of their potential, based on the additional roadblocks ahead of them. We identified this issue a while ago and addressed it by creating a leadership group that specifically acknowledged and recognized the next generation of leaders at the company, proactively sought their feedback, and gave them training on how to become better managers. This effort was very warmly received.
5. Try to enjoy work and life — It’s a major problem if operating family members aren’t happy with their work existence. Not only is it unhealthy to them, it is also visible to employees, which can be problematic. The constant dumpster fire of uncertainty, stress and fear last year was at many times unmanageable. Now that we have emerged, I feel like I owe it to myself, my family and our employees to approach work in a way that brings joy. Similar to company culture, personal happiness is very visible to your team, and operating family members need to find a way to achieve it or find another solution.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

Two quotes:

1. Don’t Let “Perfect” Be the Enemy of “Good” (Harvard Business Review article)
2. The pursuit of perfection can often lead to the disastrous outcome of not getting anything done or finalized. Many businesses are required to do more with less. Efforts need to lead to results, even if you fall short of a perceived perfect outcome.
3. “So open up my eyes. Tell me I’m alive. This is never gonna go our way. If I’m gonna have to guess what’s on your mind” (Mumford and Sons)
4. Encouraging candid employee feedback has been really helpful to our company culture, by both increasing employee buy-in, and improving our operations.

We are very blessed that some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch with, and why? He or she might just see this if we tag them :-)

Mike Fleiss, producer of “The Bachelor.” Because of my TV/reporting background, my commitment to fostering interpersonal dynamics, and my wife and my allegiance to “The Bachelor” franchise, a number of my friends encouraged me to apply to be the next host when Chris Harrison stepped down. If you’re offering me a potential in/meeting, I’ll take it!

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

The biggest single change in my journey as a leader and as a person came when I found a regular outlet in which I could identify, voice, share and get feedback on issues that were affecting me at work, and personally. For me, joining YPO was the unlocking trigger, but there are countless other resources that can help accomplish something similar for anyone committed to exploring. While getting guidance, advice or hearing of shared experiences was incredibly helpful, the process of simply voicing some of these challenges was monumentally helpful on its own. Especially at a time when technology is fostering more isolation and collective mental health is a growing concern by the day, I think it is more important than ever to lead efforts that help our culture prioritize vulnerability, sharing, and a commitment to discussing and resolving problems.

How can our readers further follow your work online?

Anyone interested in our mission can follow our corporate Instagram @natoricompany and mine @ken.natori. I try to be funny, sometimes successfully.

Thank you so much for joining us. This was very inspirational.