About 10 years ago, I wrote an article on family businesses and how to navigate through the “minefields” that abound in them. The topic enters my mind each time we profile a family-owned organization in this magazine, such as our 2015 Supply House of the Year, Robertson Heating Supply/Robertson Kitchen & Bath Gallery in Alliance, Ohio.
You can read about the distribution firm and why we chose to honor it in this month’s issue, but I wanted to reflect on the family dynamics of Robertson’s for the moment. President Scott Robertson, the third-generation owner, works with his father and three sisters. Ouch, some of you may say. However, two of his sisters work part-time and his father is semi-retired. Scott runs the show.
Sue (Robertson) Neil is Robertson Heating Supply’s human resources director and the company secretary. During her career in the family business, she was a secretary to her grandfather, founder John Robertson, and her brother. As HR director, Neil has a higher standing in the firm and is in a position to educate her brother on hiring practices, compensation and benefit structure.
Such situations can create tension, and I’m sure that has happened on a few occasions at Robertson’s.
But talking with brother and sister, I saw mutual respect for each other and their roles in the company. Obviously, the president of any company has enormous responsibility for the direction and success of the organization, as well as its employees. But HR directors have an equal responsibility to it is “an employer of choice,” as Neil has positioned Robertson Heating Supply.
And both have nothing but respect and admiration for their grandfather and his legacy.
As I noted in my February 2005 feature (“A family affair”), business schools don’t talk about family businesses. Yet at least 4.1 million companies in the United States (as of 2005) are family-owned and -operated with a lot of family involvement. Another 12.3 million firms have some family involvement. These businesses account for about 42% of the gross domestic product.
“Very few family businesses survive to the second generation, but the third generation is even harder,” says Dennis Jaffe, Ph.D., founding member of the Aspen Family Business Group, professor at Saybrook Graduate School in San Francisco and author of “Working With the Ones You Love: Building a Successful Business.”
Jaffe adds that while 40% of family companies survive to the second generation, only 15% make it to the third. And only a minuscule 1% ever see the fourth generation take up the management reins. These companies fail because family issues take over the business or family members neglect the “renewal” of it.
I have no way of calculating how many plumbing and mechanical contracting firms are family owned, but I’m guessing they are the majority of companies. I base that on the fact of how many family-owned firms are represented at the many industry conventions, meetings and trade shows I attend.
And I’d venture to say that all those organizations have to deal with family issues at some point. They may not be critical issues, but they do need to be addressed.
Family members working together in a company must keep family and business issues separate, Jaffe says, and balance family and business goals. “Set boundaries within the home for talking about the business and create a respectful working relationship when a family member enters the business. This is especially crucial for family members who may not get along.”
Families also must have a realistic view of the financial picture of the firm; it may not be able to support all the family members and their families. I know some family firms had a difficult time during the Great Recession when deciding who to let go to keep it afloat. Family businesses should be not thought of as a life raft for family members who are having difficulty finding or keeping a job.
Another factor to consider is generational value shifts. “Each generation may have different values and expectations about how the business and money is used and managed,” Jaffe explains.
Regardless of how many family members are involved in the company or who is in charge, the primary focus must be to keep it a viable, successful enterprise. Old arguments from childhood or slights by another family member don’t belong at the company table.
Learning to work together as a team will do much to keep the company around for future generations — for your family, your employees’ families and your customers’ families.
Report Abusive Comment