Outreach Highlights
November 2008

Strengthening Family Businesses in Good Times and Bad

Family Business Center director Ira Bryck (center) sometimes calls on the wisdom of famous friends to help dramatize the ins and outs of mixing family and business.

Let’s face it: Running any kind of business has rarely been as challenging as it is right now.

But when a business happens to be family-owned, a whole new and sometimes unique set of challenges comes into play during tough economic times… challenges that, in any other business, might seem less emotionally charged.

For instance, how, when all is said and done, does the business get passed on to the next generation? What rights and responsibilities come with ownership or management roles? How do decisions get made that involve multiple sibling and cousin families? What happens when family issues get dragged into the workplace?

The UMass Family Business Center (FBC) has been helping family-owned companies answer those questions since 1994. That’s when local financial advisor Charlie Epstein, already familiar with the special issues faced by family-business clients, initiated the program through UMass Amherst Continuing & Professional Education—still its home within the UMass Outreach family of programs.

Since then, Ira Bryck has been the center’s director, offering a special kind of outreach to family businesses in good times and bad, and doing so with a reassuring sense of humor and a showman’s ability to tease out the most delicate issues in ways that make them seem somehow less perilous.

In the mid-1990s, says Bryck, two issues dominated family business consciousness.

“Family business was a forest-and-trees situation,” he notes. “People didn't see that a lot of reasons why businesses were succeeding and failing were family issues. They’d think, 'I'm in a crazy, shameful situation,' and not realize that they're in the normal range. Once you recognize you're normal, you're more able to dispose of the shame, and overcome a serious learning disability.”

The other dominant issue was succession. Most businesses had been started or continued by World War II or Korean War vets, who were aging and stumbling as they brought children into the business, or were transitioning from sole proprietor to partnership to multigenerational management and ownership. Too often, they would neglect to consider the implications of these structural changes, and fail to “treat the business like a business.”

“I'm still amazed how many successful companies don't even have job descriptions for key employees, which is Step One,” says Bryck, adding that next steps include performance reviews, compensation strategies, budget awareness, building a meritocracy and a company of stakeholders.

Marc, Dan, Chris, Larry Grenier of Grynn & Barrett Studios

“If you haven’t started down this path of professionalizing, you also probably don't have funded buy-sell policies, you probably haven't had the conversation that we’re all going to die one day, and it's unlikely that your child will ask you, 'How come I'm president but I don't own anything?' You're not open to the discussion. That's why a lot of these centers like ours have become important—to allow them to discuss those undiscussables.”

Bryck began the series of continuing dinner forums, bringing in experts on family business and on best practices for any kind of company. The seminars are clearly valuable; 14 of the center's 72 member companies have participated since the first year.

Over time, Bryck added a number of other programs, such as the three ongoing roundtable discussions: for presidents, for successors, and for women in business. Recently, the Center launched a series of what he called “Sibling Summits.”

Siblings, notes Bryck, can have a wide range of issues, even within the same family. Sibling co-owners may be a decade or more apart, with older siblings perhaps thinking about their own children entering the business, while their younger siblings are still thinking about day care.

The Sibling Summits arose in response to a request from the Neveu family, owners of long-time FBC member Notch Mechanical Constructors. All five Neveu siblings served on a panel for first summit, held in May. Discussions at the summit focused on:

• Adjusting to taking the control of the business from the previous generation, with evolving ideas of authority and leadership
• Integrating family members, especially children, as well as key non-family managers
• Communication and management styles among siblings, and dealing with the problems of some siblings having greater authority than others

The event was successful enough that another is scheduled for November 20. Bryck plans future summits on other topics, such as spouses in business, cross gender multigenerational partnerships (fathers and daughters; mothers and sons), and more.

Summits, roundtables, and dinner forums aren't Bryck's only tools. He has a special, and sometimes dramatic, ability to “get people talking.”

“I created three plays as discussion starters, and we engage speakers who will show, not just tell, what they are talking about as they involve the audience,” says Bryck.

“We've had some offbeat presenters, including Abraham Lincoln and George Washington, telling tales of leadership. Our attendees appreciate alternate ways to learn, and I'm very proud of the part of my website where speakers talk about how they enjoyed talking before our thirsty membership.”

Center members, adds Bryck, may be better equipped to face a recession than many other companies. Many have instituted the good governance and decision-making procedures repeatedly advocated by the Center's visiting experts, such as non-family boards of advisors and written succession plans. And a higher-than-typical percentage of senior owner-members have successfully transitioned their companies to the next generation—a process that can be fraught with peril.

As wallets tighten, member companies are redefining their missions and retrenching around core competencies, Bryck notes. For example, founding member Grynn & Barrett Studios (formerly known as The Greniers, A Family of Photographers), which used many FBC resources in transitioning from the founder to his sons, no longer defines itself as in the photography business. It is now in the business of memories and “mojo”—helping people remember themselves and their loved ones in their best moments with an attractive combination of vitality and glamour.

For Bryck, the challenge of a down economy is to show, through the success of companies like Notch and Grynn & Barrett, that membership in the Family Business Center is itself a key to survival, and not a dispensable luxury: “You can't afford to isolate yourself,” he warns. “More than ever, you have to be part of a community, and take part in its collective wisdom and frank discussion.”

— Shel Horowitz