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Like father, like...
Communication is key issue for family-owned businesses
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FATHER'S DAY
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Published: June 15, 2008
Open communication and the ability to separate the different expectations of home and work are the keys to a successful father-child business relationship, experts say.
There are few neutral opinions when it comes to the father-child dynamic in family-owned businesses, said Wayne Rivers, the president of the Family Business Institute in Raleigh.
"That's why the lows can be lower in a family business than with other employers," Rivers said. "But the highs can be so much higher than any achieved with other employers because of the emotional investment of the family members."
For this Father's Day, the Winston-Salem Journal interviewed three fathers and their children who work with them. Richard Smiley works with his stepdaughter, Brittany Johnson, at Smiley Fitness by Design in Winston-Salem. Joe Brewer works with his son, Greg, at their law office in Wilkesboro. And Steve Brown and his son, Cory, run a two-man shop started by Steve's father -- Henry's Electric Motor Service in Winston-Salem. (Their stories are on Page A14).
For father-child businesses to succeed, analysts said, open communication is a must. That's because fathers, mothers and their children typically view the family business through personal motives.
"Fathers in a family business frequently exhibit a parental attitude toward their adult children in the business," said Tom Juenemann, the director of the Institute for Family-Owned Business at the University of Southern Maine. "Mothers are concerned with egalitarianism."
That's why mothers tend to serve as the "chief emotional officer" of a family-owned business, said Tom Ogburn Jr., the director of the Family Business Center at Wake Forest University.
Juenemann said that "parents frequently don't see their children, whose diapers they once changed, as possessing the same kind of verve and tenacity.
"They enjoy having their sons and daughters close to them in the business, but they smother them with their own needs for control," he said.
Meanwhile, the children are concerned with sibling encroachments and parental indecision.
"One or two will feel entitled to certain company powers, paychecks and freedoms," Juenemann said. "Each family business member sees the business from a different perspective. Some will see it as a family monument. Some will see it as a family gold mine. Others will see it as a mausoleum to be avoided at any cost.
"Successful business-owning families adopt an attitude of dealing with issues, not personalities, in which everyone has a legitimate say, and every person is treated with complete respect, regardless of what has been transpired before."
Rivers said that families are doing a better job with handling estate planning -- primarily to avoid a big hit from the estate tax -- but not so good with succession planning in family businesses.
"There is a difference between ownership succession and management succession," Rivers said.
"Most families also don't have a clear-cut way of measuring productivity at work. Sometimes the family member who is the most efficient doesn't get the same respect as the person who is less efficient, but works the most hours," he said.
Despite the potential for tension among family members, Rivers said that there is "a strong gravitational pull" to a family business.
"That's especially true in smaller towns, because many opportunities in life can be tied up there -- jobs, wealth, social, identity, family closeness," Rivers said. "But some think that the gravitational pull is unhealthy for those who don't share the family dream."
Ogburn said that some parents view a family business as a way to educate their children about the ways of finance and getting along at an early age.
"Children working in a family business tend to pick up the values of the family quicker than those who don't," Ogburn said. "They learn respect, accountability and even get to draw a paycheck."
■ Richard Craver can be reached at 727-7376 or at rcraver@wsjournal.com.
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