Enterprising families often have multiple connected businesses and family offices — and when these are thoughtfully connected, they can strengthen each other. This is the case for Marshall Lockton, who is principal of Meraki Investments, LLC, which is invested in by his immediate family’s family office. Before founding Meraki, he worked for 13 years at his family’s business, Lockton, the world’s largest family-owned insurance brokerage. He is also active in the broader Lockton family’s family office.
The two family offices he is part of are connected by the same underlying principles. And his work in the family enterprise has inspired the investing he does today.
As part of an overall plan to stay united as a family and as a Lockton company, the shareholders of Lockton, the family business, participate in a family office together. Lockton Companies is owned by family shareholders with the intention of being perpetually private, and several family members are active in that business. The family office is professionally managed by a multifamily office.
This Lockton shareholder family office provides the framework for education and social engagements between the rising generation and the broader Lockton family.
“We work with the multifamily office on human capital: family meetings, education and other things that are necessary to get the family engaged in the idea of keeping Lockton private,” Lockton says. “Our goal is to have high family engagement and education. The family worked together on our first two official family events, which I took a leadership role in launching.”
In addition, Lockton, his father, his sister and their spouses have more recently set up their own family office for their joint holdings, under which Meraki Investments operates. Lockton is one of the three managers of this family office. They rely on the same multifamily office as the larger family office does, plus other financial advisors, for investment advice. Investing is the main function: in operating businesses, equities, fixed incomes and private equity. The office has some services, primarily taxes and accounting, but does not offer heavy-duty concierge services.
“It’s a hybrid family office in partnership with a multifamily office, which helps with investment selection for the traditional investing, private markets and nonoperating company investments,” Lockton says. “For me, the really interesting part is Meraki Investments — a holding company that invests in lower middle market services businesses, really focusing on ones where people are the differentiator and culture drives performance. We have several minority investments in startup-type businesses related to human capital-related services, through employers and their people: two tech-enabled recruiting firms and one related to food as medicine through health insurance. We also have the first majority investment in a mature operating business: The Knight Agency. This will be a platform business to acquire other complementary businesses.”
Branching out in business
Lockton, in partnership with his father, Dave, took the initiative to start Meraki Investments as part of their family office. Lockton worked on a business plan for Meraki for about six months before stopping working at Lockton.
“It looked at the underlying philosophy and the value that we would add — telling a buyer why they would want to sell to a family office instead of traditional private equity or a strategic buyer,” Lockton says.
He then started sourcing opportunities.
“The philosophy is based on years of learning from the success of Lockton as a culture-oriented service business — plus a deep belief that businesses are the best form of impact, and that positive culture and engaged people drive business outcomes,” Lockton says. “I’m a believer in stakeholder capitalism: I believe that businesses exist to do more than make a profit.”
He found an opportunity in The Knight Agency, the operating company Meraki has invested in.
“It really does help clients connect different stakeholders,” Lockton says. “I like the impact that we could have on doing well, but doing good.”
The Knight Agency, a 30-year-old marketing business out of Orlando, Fla., is Meraki’s first majority acquisition of an operating business.
“For the past 10 years, we’ve really been focused on how to use marketing to connect people to the organization,” Lockton says. “We focus on building connection through internal communications, employee experience and family and stakeholder education. I had seen through Lockton the importance of culture and communications to company success and had grown passionate about that.”
That idea — along with Lockton’s background in marketing — informed the overall viewpoint of Meraki Investments.
“I hadn’t seen a business use marketing to reach all the stakeholders, including employees, the way The Knight Agency does,” Lockton says. “I was able to establish a strong partnership with the founder, and we agreed to work together to grow the business to the next level. I thought I could bring my experience from Lockton, helping build a world-class services business, to the table.”
The power of storytelling
Knight focuses on family businesses because of their long-term orientation and the fact that they typically understand the value of preserving a company’s culture.
“We have worked with a range of family businesses on questions like: How do they tell their story? How do they reach their stakeholders — including employees, but also the family members and other investors? And how do they activate it — through documentaries, education, campaigns, external brand and other forms of communication?” Lockton says. “We help them capture not only the legacy story, but also the story of where they’re going. Another big piece of this is personalizing it to the individuals. How do you get people — whether they’re a family member or an employee — to connect their own story, purpose and values to the organizational purpose and values, and to the organizational story?”
The Knight Agency works to capture a company’s story and help them articulate it — then activate it and integrate it into the organization.
“There’s plenty of data that shows that connected people will stay longer, work harder and put in more discretionary effort,” Lockton says. “We believe storytelling is the most effective form of communication to create real motivation and persuasion. We use it to connect people to the company, to their work, to each other and to their leader. With effective storytelling, we think we can really shape the norms of behavior within an organization and make people care.”
Lockton’s two family offices, family business and family office investments are all connected.
For example, at the inaugural Lockton family event, the family used some of The Knight Agency’s ideas to make the family retreat come to life, using storytelling in two places.
“We had a video that included stories of people from the Lockton business. We also had family members from ages 10 to 75 share with each other their story from the previous year and then share it with the whole group,” Lockton says. “It was full circle: We used Meraki’s operating business to support the family business, using lessons learned about how to connect people to the organization through stories to do that.”