The Family Business Legacy

“The most successful executives are often men who have built their own companies.  Ironically their very success frequently brings to them and members of their families personal problems of an intensity rarely encountered by professional managers.  And these problems make family businesses probably the most difficult to operate.”

-Harry Levinson

In 1959 my grandfather, with a 3rd grade education began our company.  Riding the waves of success through the early 80’s until the bottom dropped out on the market, devastating our company as well as so many others. But somehow we managed to hold on, and although at a great cost we emerged smaller, yes, but stable.  Not much else can be said about those times, as i myself did not have the opportunity to experience first hand the trouble and financial mess we experienced as a company, as i was still very much in diapers.  And therefore, i can not truly tell that story.  I can however say that while we maintained the title of the largest supplier of our kind in the world, that title, as many have experience is one that although attainable, is virtually impossible to hold onto.

Fast forward a decade and we find that the emergence of the 2nd generation of leaders is starting to prove dangerous.  Although many years of experience has been undergone, there begins the rift that so often can appear when siblings are involved in a family business that is lacking in governance and direction.  This is only compounded when external ventures begin to take a financial toll on the parent company.   Those involved in the parent company or that which is producing financial gains, upon which an entire family depend, usually feel resentment and may at times question the existence of a non-income or even debt producing venture.  However, what may have been a logical and rational concern, can easily be drawn into a negative light and that is our case.  Two brothers left to share control, with one laboring endlessly to sustain financial growth, while the other took to laboring endlessly on a venture which drank from that financial growth.  And so everyday disputes began to take the form of extreme mistrust and lack of communication.

This part of our story, is concluded by merely stating the facts as plainly as possible.  Disagreements continued until one brother accused the other of misappropriation of funds, and with the aid of other executives de-throned the brother who had worked hard to maintain the parent company.  There were even a few punches pulled and the collision of one brothers face with a wrench.  But i deviate.  The fact is, in the end, the dethroned brother agreed to buy out his brother and to regain control of the company that had been started so many years ago.  And although the buyout eased the tension for many, and the two were finally free to go their own way, it came at the cost of one brother’s relationship to the other.  Today, at the time of this writing that split, fifteen years later, is still a great divide.  What could have been a more amicable split unfortunately ended in pain, loss and the cost of family.

Now, today, as eldest of the 3rd generation i find myself looking out over the past and present of the company that has become a legacy to my family.  To see the success and failures, the good times, and the bad, and to see at what cost to our family these have come.  I see the future, if only vaguely and i wonder at what can be done to learn from history and to prevent this wonderful opportunity from falling to the dark side.  And so i have begun that journey, to learn, listen and work my way through all the good and bad that is a family owned business.  50+ years in our industry and the one thing i see is that we are theoretically in the worst shape ever, lost and without direction or organization.  The later of which i seem to find has never trully existed.

50+ years!  What have we learned, and where will we go?