Family Business: The Dynamic Manager’s Handbook On How To Build A Successful Family Company

By Dave Donelson

Family businesses confront the same problems faced by any small company—and then some. Squabbles over titles and responsibilities get confused with sibling rivalries while adapting to changing market conditions often conflicts with cherished tradition. The very real family-owned companies in this handbook represent a cross-section of enterprises passed down from generation to generation. In every one, they’ve faced down the demons of family involvement and built growing, successful companies.

“The Family Business Soap Opera” explores the major dramas family business owners live through every day.

“Changing Direction From Generation To Generation” tells how a jewelry retailer overcame the foibles of a patriarch who dominated the company for 40 years.

“Growth Through Family Ownership” explains how family ownership helped an LP Gas distributor increase sales 50 times.

“Family Ownership But Not Family Management” shows how one family in the publishing business turned management over to a non-family team while maintaining control over their company’s future.

“Adapting To A Changing Market” is the story of a daughter who re-created her father’s small manufacturing company in response to customer demands.

“Mixing Family And Non-Family Owners” explores how a real estate investment and management firm communicates with dozens of outside investors while keeping management in the family.

“Family Dynamics Move The Business” is the story of how an auto dealer group deals with sibling rivalries and an 80-year-old founder who won’t let go.

“The Family Tyrant” looks behind the scenes at one of the golf industries most successful equipment companies to see how the strong-minded patriarch nearly destroyed it.

“Learning At The Founder’s Knee” looks at mentorship from the second-generation’s perspective in a janitorial supply business.

“Mixing Technology With Tradition” follows the development of a paint and home decorating retailer as it passes to the fourth generation of family ownership.

“Family Tragedy Shapes Company Future” is the story of how three very young brothers and their sister saved their family’s ski resort and real estate company after their parents died in a plane crash.

“It’s Never Too Late To Plan For Succession” explains how to prepare yourself and your company for ownership transition.

• Language: English
• Publisher: Dave Donelson
• Release date: Jul 21, 2011
• ISBN: 9781466001190

Dave Donelson

Dave Donelson’s world-roving career as a management consultant and journalist has led to writing and photography assignments for dozens of national publications. The Dynamic Manager's Guide series is based on his work with hundreds of business owners and managers as well as his own experiences as a successful entrepreneur. He is also the author of Creative Selling: Boost Your B2B Sales and two novels, Heart Of Diamonds and Hunting Elf.

Book preview

Family Business

The Dynamic Manager’s Handbook On

How To Build A Successful Family Company

by Dave Donelson

Donelson SDA, Inc.

Copyright 2011 Dave Donelson

ISBN: 978-1466001190

Smashwords Edition

A note from the author

The Dynamic Manager Handbooks are for entrepreneurs, managers, and others who want to succeed in small business by learning more about management techniques, operations, and best practices. Each volume in the collection is devoted to a single topic. The material was extracted from the Dynamic Manager Guides, my series of books based on my experiences as a business journalist, consultant, and entrepreneur.

Table of Contents

Chapter 1 - The Family Business Soap Opera

Chapter 2 - Case Study: Changing Direction From Generation To Generation

Chapter 3 - Case Study: Growth Through Family Ownership

Chapter 4 - Case Study: Family Ownership But Not Family Management

Chapter 5 - Case Study: Adapting To A Changing Market

Chapter 6 - Case Study: Mixing Family And Non-Family Owners

Chapter 7 - Case Study: Family Dynamics Move The Business

Chapter 8 - Case Study: The Family Tyrant

Chapter 9 - Case Study: Learning At The Founder’s Knee

Chapter 10 - Case Study: Mixing Technology With Tradition

Chapter 11 - Case Study: Family Tragedy Shapes Company Future

Chapter 12 - It’s Never Too Soon To Plan for Succession

About Dave Donelson

Chapter 1

The Family Business Soap Opera

Family dynamics add drama to everyday management decisions

Hey Dad! Can I take the company out for a spin?

It’s not hard to imagine a family business founder hearing those words. Nor is it difficult to feel the patriarch’s gut-wrenching reaction. He slaved for years building a successful business, creating a product, toiling to find customers, striving to beat the competition. How in the world can he entrust his life’s work to that kid who once vomited in his lap on the roller coaster at Coney Island?

Such dilemmas and dramas are inherent in family businesses as they pass (or not) from generation to generation. In addition to finding good employees, the family business owner has to somehow fit his or her offspring, cousins, and in-laws into the workforce. Without destroying morale. Or the business. He or she has to not only mediate customer complaints but somehow separate siblings whose rivalry makes the Yankees-Red Sox look like a love fest. And should he fire daughter Susie’s ex-husband before or after the divorce is final? Or not at all?

Usually, family business problems have less to do with money and more to do with the roles of family members, according to consultant Joe Pastore, Professor Emeritus and former University Provost at Pace University’s Lubin School of Business. The root of most problems is the role conflict between family position and business position. It’s extremely difficult to separate the two.

Or, as White Plains, NY, attorney Andrew Karlen, who has specialized in family business matters for 35 years points out, The business is the business and Thanksgiving dinner is Thanksgiving dinner.

Karlen says family dynamics are almost inevitably intertwined with how the business is run. I was meeting with a family management team once, he says, and the dad took me across the hall to show me how messy his son’s office was. You’d think he was showing me a teenager’s bedroom at home. Normal business relationships become complicated when family is involved, he adds. I may work at the family company and have ownership, while my brother may be CEO and also have ownership. We both may get dividends, but I’m not entitled to the same salary just because my last name is the same. Sibling rivalry, anyone?

The dynamics of managing employees are different in a family-owned business, too. Let’s face it, Pastore says, family members are treated differently than non-family members. Most employees recognize a slight sense of injustice there. You can’t tell a non-family employee they better stop coming in late, for example, when a family member gets away with it.

Such issues face a surprisingly large number of companies, although the exact number depends on how you define a "family