Women

Gender parity in family business: How long till we get there?

When Charlotte Lamp was growing up in the 1950s and ’60s, no female family members worked in her family’s business, Port Blakely. The company, which is based in the Pacific Northwest and has been owned by the Eddy family since 1903, owns and manages working forests and markets renewable forest products.

Lamp’s brothers had summer jobs at Port Blakely, but “I was not allowed to, because I was a girl,” she says. In college, Lamp was a biology major and chemistry minor with a number of elective courses in field biology areas, but still she was barred from working in the forests. Although she didn’t realize it at the time, some of her female cousins also wished they could work in the company.

Lamp, a third-generation shareholder, says the opposition to women’s participation began with her grandfather, one of the first Eddy family members to lead the business. He believed “women at the table were to be seen and not heard,” Lamp’s mother told her. The second-generation CEO perpetuated that culture.

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It wasn’t until after third-generation member Jim Warjone became CEO in the 1980s that attitudes toward women’s participation began to soften. By the 1990s, the company had a female field biologist, though she was not a family member.

A task force was convened in 1999 to establish a family employment policy. The first Eddy family council grew out of that task force. One of the issues around family employment the task force was asked to address was the employment of women.

Social change and technological advances since the mid- to late 20th century have dramatically changed the way business is done, and many family firms now have women in key roles. Port Blakely, for example, currently has a majority-female board, and all its family directors are women.

Even so, studies indicate family businesses are still a long way from achieving gender parity. The Successful Transgenerational Entrepreneurial Practices (STEP) Project, a consortium of researchers from 48 universities around the world, surveyed more than 1,830 family businesses and found that only 18% of their current leaders are female. Women lead just 7% of the North American family firms, compared with 43% of the European and Central American companies and 25% in Latin America and the Caribbean.

“It’s better to have diverse folks at the table. That makes your company stronger,” says Betsy Cowles, fourth-generation chairman of Cowles Company, a Spokane, Wash., enterprise whose portfolio of businesses includes newsprint, forestry, broadcasting, print media, real estate and insurance.

media-element file-defaultAnn Dugan, senior managing director of advisory services at the Family Office Exchange and coauthor of A Woman’s Place … The Crucial Roles of Women in Family Business (Palgrave Macmillan, 2011), says research shows that family members who rise to the top have benefited from “individual attention and thoughtful planning.”

It’s important for daughters as well as sons to receive leadership training, says Dugan, a fourth-generation member of the family that owns Lang Building Supply of Brunswick, Ga. “Part of that could be educational, but obviously a big part of that is experiential.”

“I think there are more opportunities for parity in family businesses now than there were in the past,” says Susan Remmer Ryzewic, president and CEO of her family enterprise, EHR Investments, and director of The Remmer Family Foundation Inc. “And there are more opportunities for parity in family businesses than there are in other businesses. But I still think that there’s a long way to go.” 

Early challenges
Cowles spent three summers during college as an intern at her family company. She worked as a lawyer in Seattle before joining the family firm at age 29. Her brother, William “Stacey” Cowles, who also had experience outside Cowles Company, had entered the family business two years earlier. Their father, the company president, died suddenly before Betsy moved back to Spokane.

“The transition to leadership for us was very abrupt,” she says. “The two of us ­really had to figure out our own roles with each other.” They served for a while as vice presidents under their uncle, who had succeeded their father as president.

Today, Stacey holds the title of president and Betsy is chairman, a title that previously didn’t exist in their family business. While the titles might indicate a hierarchy, they each have distinct areas of responsibility and work closely together as equals on strategy and major decisions.

“My mother was very much a strong feminist, so I was fortunate enough to grow up in a household where I was told I could be anything I wanted to, and the same went for my brother,” Cowles says. “So there really wasn’t a presumption that it was going to be the men who took over.”

Yet she encountered sexism from outside the family business. “As a younger executive, when I traveled to industry meetings, people would presume that I was the assistant, the secretary or maybe even the girlfriend of one of our senior male managers.”

Anne Klamar, now board chair of family-controlled Midmark Corporation, based in Dayton, Ohio, joined the company’s board in 1993. The board named Klamar, a fourth-generation family member, as president of the company in 2000 and CEO in 2003. She stepped down from the CEO post and became board chair in 2016.

Klamar, a physician, had not planned to lead Midmark, a global manufacturer and supplier of healthcare products and equipment and diagnostic software. A brother who had been expected to succeed their father had left the company; the brother later passed away. An outside president appointed after Klamar’s father retired in 1995 didn’t work out, and her father returned to the presidency until Klamar was named to the position.

“My dad was pretty disappointed that he was going to have to put a daughter in the role of leader of the family company,” says Klamar. “He would have much rather have a son in that role.”

Klamar’s father, when speaking to her privately, expressed doubt that she could succeed as a woman in the healthcare industry.

His comments “really fired me up,” she says.

The team she inherited, she says, was “largely male.” She wanted to hire women in executive roles, “but it was not an easy trend to change, particularly in our rural location. But, that said, my team grew from pretty much all male to having one or two females in the C-suite.” Today, Midmark’s board consists of five women and four men.

“It’s pretty uncomfortable being the only woman in the boardroom,” Klamar says. For many years, she was the sole female on Midmark’s board. “I spoke rarely,” she recalls.

“It was a yes-man, good-old-boys, ‘dad’ board. I felt like token diversity.”

Dave Phillips, who had had a 32-year career at Arthur Andersen, joined the board in the late ’90s and offered Klamar his advice. “He was a really strong mentor for me in finding my voice in the boardroom,” she says.

In 2004, Klamar joined with other women to form Professional Women in Healthcare, a leadership-development organization that helps empower women in the industry.

“While I’m seeing more women in leadership roles in family businesses, what strikes me is how proud their fathers are of their daughters,” Klamar says. “I’m not sure that they wouldn’t be equally as proud of a son, but that leads me to believe that the father — the patriarch — may feel as though the climb for a woman is a little bit steeper than, perhaps, for a male heir.”

Julia Klein, now chairwoman and CEO of C.H. Briggs Co., a Reading, Pa.-based distributor of specialty building materials, entered the business after working in public policy and politics. Her father, the second-generation leader, hired her to work at the family firm’s first acquisition.

“Like all young women, it was difficult for me to be taken seriously” despite impressive academic and professional credentials, Klein recalls. 

“My father was also pretty quick to retire and move on, and I struggled to build credibility with his team. I see part of that as being gender-related, and part of it certainly age- and experience-related.”

Klein is now the sole shareholder of C.H. Briggs; she bought out her brother and parents and unwound the company’s ESOP. “I’ve often said to women in corporate America that the way to break the glass ceiling is to build your own house,” she says. “I think I would have done that even if I wasn’t interested in my family’s enterprise.”

It took a while for her to develop an interest in working in her family firm. A politician she worked with who came from a business family helped her realize that C.H. Briggs could be a vehicle for her interests in economic development and job creation.

Her father had been sending a similar message, Klein says. “He thought that I would enjoy business because it was about strategy and people and money, and I just didn’t get it. And then finally I got it, and he was exactly right.”

Governance offers a way in
The growth of family business as a field of research and practice since the mid-1980s has resulted in an emphasis on governance as a way to manage issues at the nexus of family and business.

Family councils and other family governance structures enable family members to contribute to the family enterprise even if they don’t work for the family business. Some women (as well as men) who proved themselves as leaders through service on the family council have later assumed roles in the family business or on the board of directors.

Susan Hanas, a third-generation member of the Duda family, built a career as a teacher, principal and superintendent of a private school while her brothers and male cousins learned to run the family business, A. Duda & Sons Inc., an agricultural and real estate company based in Oviedo, Fla.

Hanas served as chair of the Duda family council from 2004 (the year the council was formed) until 2012. She was elected to the company’s board in 2013 and was elected board chair in 2015. She is the first woman and the first family member not employed in the business to chair the board.

Hanas credits her leadership success to listening rather than talking, running effective meetings, learning from others in the room and working with people in all positions. She also sees herself in a unique role due to her gender and generation: She knows what has been done in the past and serves as a role model for the family’s future female leaders.

“When the third generation retired from Duda, their understanding of family, family shareholders and the business changed,” says Hanas, the youngest living member of G3. In one generation, the percentage of female family members working in the business jumped from zero to 37%. In fact, the fourth-generation women represent 44% of the family management team.

Beyond employment at Duda, women have also served in various capacities within the governance structure. Today, three female family members serve on the Duda board (30%) and seven women serve on the family council (63%).

Klein agrees that the focus on family governance has created more opportunities for family members to serve in leadership roles. “I’d also say that when there’s good governance, everything is just more professionally run, hopefully, and that can often take away some of the intrafamily drama,” she notes. “So as businesses get bigger and more sophisticated and are better governed, there is more ability for the cream to rise to the top — for real talent to be recognized. And that always helps women, regardless of the hat they’re wearing.”

“The family governance structure emphasizes the fact that you need to pull in all of the talents of your family — male or female,” Cowles says. “Because that just makes your whole family enterprise stronger for the long run.”

While acknowledging that family governance roles can be a good training ground for future leaders, some lament that in many firms these positions have been the only ones offered to women, while men are given a chance to serve in the business or on the board.

“You don’t have to be CEO to be a female leader in a family business system, but it’s interesting how these sorts of roles, which may be considered by some as softer and non-essential to the business, seem to be held by more women than men,” Klamar says.

“I’m not sure how easy it is for people to move from a family council — which is dealing more with questions the family has and avenues for communication with the business — to being on the business board, unless someone is interested and has the willingness and the ability to learn more about the business,” says Remmer Ryzewic.

“I think that varies a lot by the individual family and how much education they provide to the family over the years. Some of these families are really great at providing training programs, but a lot of them are sort of haphazard about it.”

A non-family female CEO
Anecdotal evidence indicates that most non-family CEOs of American family firms are male. GOJO Industries, maker of Purell Instant Hand Sanitizer, is an exception. In January, non-family member Carey Jaros, who had served as GOJO’s chief operating officer, became president and CEO of the Akron, Ohio-based company.

The promotion of Jaros is especially noteworthy because she serves alongside an executive chair who is also a woman: third-generation family member Marcella Kanfer Rolnick, who assumed that role in May 2018.

Kanfer Rolnick notes that GOJO was founded by in 1946 by a wife-and-husband team (her great-aunt and great-uncle, Goldie and Jerry Lippman), “and women have played important leadership roles in our company ever since.

“We have a history of building successful leadership teams by combining perspectives from within my family and beyond. We are continuing with this strategy, and Carey was the best person for the job.”

Jaros joined GOJO in 2016 as chief strategy officer and was named COO in 2018. “Carey brings a rare combination of strategic and operational skills,” Kanfer Rolnick says. “Her background as a business and strategy leader at GOJO and previous companies, as well as her many years as a strategy consultant, have prepared her for this role.

“As a leader, Carey is fearlessly optimistic, courageous and passionate about helping team members develop and grow.

“We have been planning our leadership transition for many years. Carey has been distinguishing herself through her contributions and hard work, so it hasn’t come as a surprise.

“Both of us have received an outpouring of well-wishes from employees, distributor partners and the community.”

Changing the culture
Do women aspiring to leadership in their family companies today face fewer challenges than their mothers and grandmothers did? Klamar says things are different now, though perhaps not easier.

“It probably depends on the situation, but I do see more mentoring of females, particularly in our industry, than I have seen in the past,” she says. “And if you have an openminded mentor, that path is a lot easier to travel than one where barriers may continually be put up.”

Lamp points out that it’s very difficult to change the culture of an organization. “You can’t change culture by rulemaking.” Change most often comes about through “little baby steps,” she notes.

When successful female family business leaders share their experiences publicly in a relaxed atmosphere, such as at conferences, old-school thinkers begin to see diversity as a viable option, Lamp says.

Lamp points out that a woman with an exceptional résumé doesn’t need to beg for a job in her family’s business. There are plenty of good career opportunities elsewhere.

“If she is in a family that is not going to acknowledge who and what she is,” Lamp asks, “is she going to work from within that family to change [the tradition of male dominance]? Or is she going to walk away?”

The war for talent shows no sign of abating, “so we really can’t afford to overlook half the population,” Klein says.

Copyright 2020 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permission from the publisher. For reprint information, contact bwenger@familybusinessmagazine.com.     

On the distaff side

In March, the United States celebrates Women’s History Month with exhibits, scholarship and events at the Smithsonian Institution, the Library of Congress, the National Archives and other federal institutions. On Aug. 26, the country will mark a milestone in women’s history: the 100th anniversary of the 19th Amendment to the Constitution, which gave women the right to vote.

In this edition of Family Business, we examine women’s ascent to leadership in family businesses. Since the days of Estée Lauder, women have proved they can lead a family firm and grow it to market dominance. Despite such successes, many families traditionally relegated their female members to informal roles and denied them the opportunity to contribute to the business.

This mindset persisted into the 21st century. In their 2008 book Family Wars, U.K. family business advisers Grant Gordon and Nigel Nicholson wrote, “It is well known in family business that women often occupy a subtle but determining role behind the scenes — sometimes as ‘Chief Emotional Officer,’ over the dining room table or on the conjugal pillow, gently but firmly nudging the minds and moves of the chief actors.”

While some women embraced the “chief emotional officer” role, others found it demeaning. It’s now widely acknowledged that a family governance structure, such as a family council, is a productive way to manage family issues. Several families retain the “chief emotional officer” title, formally or informally, but most use other designations for family leaders, who are often elected to governance posts. The establishment of family governance signals that disputes will be resolved by a diverse group of family members in a transparent process, rather than by “Mom” whispering to “Dad.”

Many families have developed employment policies stipulating that jobs in the family business will be offered based on merit rather than family status. Such policies may have enabled qualified women to join their family firms, but statistics show it’s still primarily the men who become CEO or chairman.

Age may be a factor in the persistence of the patriarchy. Family business leaders and board members are notoriously long-tenured. It’s possible that women will get more chances to step up when the older men step down.

Studies indicate that women who become CEOs of their family businesses may well be the type of leaders millennial employees want to work for. A 2019 survey of more than 1,830 global family businesses by academic researchers, known as the Successful Transgenerational Entrepreneurial Practices (STEP) Project, found that family businesses led by female CEOs are less autocratic than those with male CEOs. Research by Great Place to Work, an analytics and consulting firm, determined that millennials prefer inclusive leadership that gives employees more flexibility.

For a report in this issue, I asked about a half-dozen highly accomplished female family business owners for recommendations on developing young women for leadership in family firms. One key suggestion that emerged: Encourage all NextGens to engage with the business and give qualified women their due. Allow the women in your family to reach their full potential.

Copyright 2020 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permission from the publisher. For reprint information, contact bwenger@familybusinessmagazine.com.    

Powerful in pink

In recognition of the 100th anniversary of women’s suffrage in America, Family Business is dedicating this issue to strong female leaders. I count my grandmother among them. In fact, Grandma Selma, born in Missouri in 1886, was a suffragette. She recalled voting in 1920 — while 8½ months pregnant with my father — in the first presidential election open to women.

Grandma was active in politics, charitable organizations and cultural institutions. She was the first woman president of the Kansas City Museum. In her 80s, she took courses to finish her college degree. Later, she chained herself to Union Station, the landmark train station, to prevent the Beaux Arts building from being torn down (it wasn’t). 

An incredible role model who hosted mandatory family lunches every Sunday for over 40 years, Grandma was the influential woman behind her husband, who presided over our family business for four decades. While she was not actively involved in the running of our grain and flour business, she certainly understood it and saw her role as one of keeping the family together.

Another female leader whom I have greatly respected and admired is my college friend Carol Lavin Bernick, who began working with her parents, Leonard and Bernice Lavin, at Alberto Culver right out of college and went on to build it into a multibillion-dollar consumer products company until it was sold to Unilever in 2011. At the time of the sale, Carol was executive chair of the board.

As she recounted in her book of lifelong lessons, Gather as You Go, and in a Wall Street Journal podcast, it was not an easy journey. Her father, a brilliant, dynamic legend in the industry, was very hesitant to hand over control. Carol’s (now ex-)husband also worked for the company, eventually becoming CEO, but they each reported separately to Leonard. After many years, Carol finally confronted her parents and said she and her husband were prepared to leave if control was not passed along. Her parents stepped back and the company, and its culture, progressed.

Despite enormous personal and professional challenges, such as her divorce and later the sale of Alberto Culver, Carol says that she loved working in the family business — “There is nothing better!” Today, her three married children have joined her in various business ventures and civic endeavors.

A diligent worker, Carol moved up through key areas such as marketing, product development and operations while raising her children. She lived her own philosophy of work/life integration. “Find a company that values families,” she says. “You will still work just as hard, but the best companies judge your performance by the points you put on the scoreboard, not by the hours you are face to face — though being there with the team most of the time is critical.”

Opportunities for young women today are better than in her day, Carol says. “I think there are more mentors and success stories today, and I believe that women in family business — or any business — should be proactive and find role models who make it work.” She encourages working somewhere else first, “for two reasons: to build your credibility, but also to take the good stuff back to your family business and implement it.” Solid advice from someone who was recognized by Harvard Business Review for establishing the unique and successful culture at Alberto Culver.

As I reflect on the many successful female leaders that I have known, I am hopeful that the world of my four granddaughters, joined recently by a grandson, will be brighter, with limitless opportunities to flourish.

Copyright 2020 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permission from the publisher. For reprint information, contact bwenger@familybusinessmagazine.com.    

Seeing pink

One of my four granddaughters had her fifth birthday party recently, and as I watched the cousins play together, I realized that one day one of them may become CEO of our family business. When my grandfather was running our family flour company in Kansas City, women were not expected — and definitely not encouraged — to enter the business. Granted, I had a brother and two male cousins, so succession was somewhat guaranteed. Things have certainly changed with respect to women in business since then.

Over the past eight years at our Transitions conferences, I have noticed more women serving in leadership roles in their family companies, whether as CEOs, senior managers or family council chairs. Approximately half our attendees are women, particularly in the NextGen category. Today, family businesses are more open to female leadership. Working hours are more flexible to accommodate childcare, even though the workload tends to be the same as in the public arena.

In Family Business Magazine’s November/December issue, we introduced “Family Leaders to Watch,” which celebrates those who work to bring the family together in support of the business. Of the 17 family leaders we highlighted, 11 were women, including Meghan Juday at IDEAL Industries, Brittany Timmons at Canal Insurance Companies and Joanna Morrill at Leupold & Stevens.

In addition to family leadership roles, today more women are holding the top position in the family business. Twin sisters Katie Rucker and Jenny Dinnen are co-presidents of MacKenzie Corporation, each staking out her own niche that capitalizes on her expertise.

Among the other top female executive business leaders who have been profiled in Family Business or spoken at Transitions are Anne Klamar of Midmark, Carol Bernick of Alberto Culver, Maria Luisa Ferré Rangel of Grupo Ferré Rangel and Marcella Kanfer Rolnick of GOJO.

Others who hold management positions include four Yuengling sisters at D.G. Yuengling & Son,  their family’s brewery. NextGen member Alex Jackson Berkley has joined her mother, Karen Caplan, and her aunt, Jackie Caplan Wiggins, at Frieda’s, a specialty produce company.

Of course, not all women leaders at family companies are family members. According to Carrie Hall, Americas Family Business Leader at EY, her firm’s research on the world’s largest family businesses “shows that they are advancing women into executive leadership positions at greater rates than their non-family counterparts. While it might be expected women family members would aspire to and achieve leadership positions within the business, non-family women exceeded those of the family by more than three times.”

In general, Hall says, “women are drawn to and flourish in family business environments as they tend to focus longer term and often on measures other than profit first. This includes inclusiveness, sustainability and social responsibility.”

Hall suggests the rise of women in family companies is self-reinforcing. “As more women in leadership serve as role models, younger women can see themselves in the business,” she says. “This has resulted in a significant increase in interest by younger female family members to join the business.” This bodes well for the NextGen in my family!

Copyright 2019 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permission from the publisher. For reprint information, contact bwenger@familybusinessmagazine.com.

Women's progress: Steady but slow

In a book of family business cartoons published in 1990, women are depicted as nagging wives, wealthy widows, marriageable daughters and “Ms. Buxum,” the secretary. We’ve come a long way, baby.

Today, that view of women in family business isn’t just reactionary; it’s ridiculous. Around the world, one can find women thriving in leading roles at their family firms: as company executives, board directors, trustees and family leaders. But despite this progress, it remains unusual to see a female CEO or board chair of a multigenerational family firm. Though founders’ daughters, granddaughters and great-granddaughters are succeeding in the management ranks and in the boardroom, their brothers (or male non-family executives) are still more likely to get the top jobs.

In a 2016 survey of key decision makers at 160 family companies conducted by PwC, only 10% of the respondents were women. The findings of that study, however, hinted that the picture might be different in the future. Nearly two-thirds (64%) of those surveyed said their NextGen women and men would be considered equally for future leadership positions. Time will tell whether the decision makers will merely consider the NextGen women or actually anoint them as successors.

Sexism (overt or subtle) isn’t the only factor keeping women from the corner office. Some women decline the CEO’s job, often out of concern that the demands of the position would interfere with childrearing. An advantage of working in a family business is that those who want to maximize time with the kids needn’t withdraw from the workforce entirely; family companies tend to be more understanding than non-family firms about the need for work-life balance.

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One way that women commonly reach the top of their family businesses is through the unexpected death or departure of a male CEO, whether it be their father, husband or brother. That’s what happened to Katharine Graham, legendary publisher of the Washington Post, portrayed by Meryl Streep in the recent film The Post. Graham took over the Washington Post Co. after the 1963 suicide of her husband, Phil Graham

As Family Business noted in a 2001 article, Katharine Graham had not been involved in operations at the Post and had to learn the business quickly. She was viewed with resentment by company executives until she built her own team, including executive editor Benjamin Bradlee. When the company went public, she ensured family control through a dual-class share structure, and she orchestrated a smooth transition to her son, Donald Graham. Though she hadn’t planned to lead the family enterprise, Katharine Graham excelled in that role. But her legacy is bittersweet. Though the Grahams remain in business, they sold the Post to Amazon founder Jeff Bezos in 2013, 12 years after Katharine’s death.

According to the U.S. Census Bureau, women are more likely than men to hold a college degree. Their educational achievements are engendering more opportunities to join their family businesses. Let’s hope these opportunities lead more of them to the highest ranks.

Copyright 2018 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permission from the publisher. For reprint information, contact bwenger@familybusinessmagazine.com.

Women at the wheel

Perseverance is the key to success for women whose family businesses operate in male-dominated industries.

 

Barbara Moran-Goodrich was told she would never run her family’s automotive business because she was a woman. Her father told her this several times, in fact.

Today she is the CEO and sole owner of the Moran Family of Brands, based in Midlothian, Ill., which oversees the franchising of automotive aftermarket repair shops. From 2015 to 2017 alone, the company saw an 18% increase in system-wide revenues.

While Moran-Goodrich’s father discouraged her from entering their business, Dick Yuengling asked all four of his daughters to enter the family’s brewery, D.G. Yuengling & Son in Pottsville, Pa. The women have succeeded at Yueng­ling even though there are few women in their industry.

When Katie Poehling entered her family’s plumbing supply business, First Supply in Milwaukee, she was often the only woman in the room when business was discussed. She found she needed more mentoring and, since receiving that support, has been promoted to COO.

Some women who join family businesses in male-dominated industries find it difficult to rise through the ranks. Even when women are welcomed into these companies, they face challenges. They say they’ve had to work a little harder than their male counterparts for professional respect and recognition. They cite three keys to their success: getting buy-in for their role, educating themselves on business strategies and networking with other women in their industries.

Though gender parity in the top echelons of the business world remains a long way away, women have slowly been making progress, particularly in family firms. Many companies that aspire to be government contractors have recognized the advantages of being a certified women-owned business (see sidebar). As more women view the family business as a viable career option and acquire the skills and experience to work there, parents are beginning to see their daughters as potential successors.

Convincing Dad
Moran-Goodrich says when she entered the family business in the 1980s, “it was a different world for women in business.” Her brothers were involved in the company, and her father, Dennis Moran, told her she’d never be more than the office manager. She went back to school and got a college degree.

“My father came back and said, ‘I now see you can go a little further in the business,’” says Moran-Goodrich, now 51. (Her husband, Paul Goodrich, is no relation to the BF Goodrich tire company.)

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The company grew. After the Morans acquired Mr. Transmission, a Nashville-based transmission repair franchise, in 1990, Dennis Moran asked his daughter to fly to Nashville and move the Mr. Transmission headquarters to Chicago. There was a complication: She was very pregnant.

“I was [nine months] pregnant and it was as if he didn’t realize [it],” Moran-Goodrich says. “I said, ‘I can’t go.’ He fired me.

“He says to this day it was because he wanted me to stay home to raise my children,” she continues. “Well, that should have been told to my husband and me at the time, because we had just bought a house.”

Two months after having her daughter, Moran-Goodrich went to work as a legislative aide for Illinois State Rep. Jane Barnes. Once her father realized she wasn’t going to be a housewife, he invited her back to the family business.

When Dennis Moran got “indigestion” that turned out to be a heart attack, the family went into high gear to find a successor.

Moran’s sons had left the business by this time and were not interested in taking over. He called on his daughter, who had worked her way up from receptionist to franchisee and franchise developer — not to be the successor, but to meet with a management consultant, Bob Gappa, to find a new CEO.

“After three days, the consultant said, ‘I know who needs to be running your company.’ He left the room for two hours!” Moran-Goodrich recalls with her infectious laugh. “After two hours he comes back and says, ‘It’s you.’

“I was laughing and said, ‘That’s not going to happen.’ The consultant said, ‘Well, I just got off the phone with your father, and he’s in agreement.’”

Moran-Goodrich had been a franchisee for seven years at that point. Gappa told her she was the logical choice based on her experience on both sides of the business. He said she also knew how to make tough decisions.

“Before Barb left to find the next leader of our company, she asked that I consider her for the position,” writes Dennis Moran in an email to Family Business. Dennis adds that once Gappa weighed in with his opinion on his daughter’s potential, “it confirmed for me what I felt.”

Barbara Moran-Goodrich accepted the CEO position and took on the task of convincing franchisees that the business was safe in her hands. Here, also, she had to deal with men who didn’t believe she could do the job.

“I went to visit a franchisee and I had a VP — a man — with me,” Moran-Goodrich says. The franchisee didn’t answer her questions directly. “He would turn to the VP and answer him.”

In the car after that meeting, Moran-Goodrich predicted that a scheduled town hall gathering of franchisees would be poorly attended. “The VP didn’t even realize what had just happened,” she recalls. “I was right — no one came.”

In addition to Mr. Transmission, the Moran Family of Brands now encompasses Multistate Transmissions, Alta Mere — The Automotive Outfitters and Milex Complete Auto Care.

Moran-Goodrich says proving herself “didn’t happen overnight.” She says she has had to demonstrate her business know-how and her passion for cars.

“I think I handled it well,” Moran-Goodrich says. “Instead of getting angry and telling [franchisees], ‘You have to listen to me,’ I had to show them I was worthy of the position.”

Learning the ropes
For 188 years, D.G. Yuengling & Son was just that —  a brewery run by generations of fathers and sons.

But in the sixth generation, that will change. Fifth-generation owner Richard “Dick” Yuengling has no sons. He does, however, have four daughters. They all work in the business and could someday own it.

In the mid-1990s, Dick was at a tipping point. He had bought the brewery from his father in 1985, and the brand had grown extensively. He needed to make a substantial investment in the company to expand.

“My dad was really at a crossroads with an influx of growth and struggling with demand,” recalls Jennifer Yuengling, 46. “He wanted reassurance that our generation was interested in coming into the business.”

Three of his four daughters went into the business as they completed their higher education; one joined after working elsewhere. Jennifer, the eldest, jumped into brewing with both feet.

Sage Advice

Family business women who have risen through the ranks in male-dominated industries suggest the following success strategies:

Be committed. Succession in a family business is a long-term endeavor, especially if the company is planning major investments or an expansion.

Let your experience speak for itself. Don’t tell people why you’re qualified — show them. Immerse yourself in the industry, and be prepared to answer questions and make tough decisions.

Find mentors. Reach out to more experienced colleagues in your field. When possible, find another woman who has worked her way up and can educate you on the nuances of industry culture. But don’t rule out a male mentor — in family businesses fathers may not naturally step in, but will help when asked.
Be confident. Even if there is pushback on female succession, inside or outside the company, stand strong. If you don’t believe in yourself, no one else will, either.

“I found my niche as I finished up my undergrad [degree in business administration] and grad school [studying counseling psychology],” she says. “We didn’t have a map or a direction to where my role would be, so I worked through it. With my interest and skill set, I gravitated toward the operations.”

She says she learned as much as she could by working in the brewery; she also took a 10-week course in brewing 10 years ago. Out of 25 to 30 people in the class, there were two women.

Jennifer says employees are supportive of the all-woman generation who will take the helm. In an industry marked by consolidation, family continuity is a plus, Jennifer says.

“I don’t think there are any reservations anywhere in our organization,” she says. “I’d like to think they’re very proud of the company we are, not giving in to being bought by outsiders. They feel that stability.”

Over the last 20 years, she’s learned a lot about not only the business operations, but also the history and growth of the company. She recommends the same for any NextGen entering the family firm.

“Learn as much as you can,” Jennifer says. “Attach yourself to that older generation and pick their brains. I understand what they’ve been through and appreciate that — that my great-grandfather or great-great-grandfather went through wars and Prohibition.

“We went through some very lean years. And the more I’m here, the more I appreciate what was done in the past.”
She’s also excited about the present. When she attended the Master Brewers Association annual conference in Atlanta in October, Jennifer took note of the gender diversity in the audience.

“I was pleasantly surprised how women there were compared to seven or eight years ago,” she says. “I do see some inroads being made.”

Today, Jennifer is the brewery’s vice president of operations; Debbie Yuengling, 42, is the pricing and sales administration manager; Wendy Yuengling, 41, is the chief administrative officer; and Sheryl Yuengling, 38, is in order services, working directly with distributors. However, the four sisters see themselves as utility players, Wendy says. “We’re not a company that really has titles that are significant,” she says.

Wendy, who has a degree in marketing, was the last to join the business in 2004. She worked as a project manager for a market research company and in advertising before setting her sights on the brewery.

“I wanted the opportunity to work for someone else first,” she says. “I wanted to have experience in case I did go back to the brewery so I would have something to offer. To me, that was important to make myself a well-rounded individual.”

She felt she had a foundation of knowledge in the family business, having worked in Yuengling’s gift shop and given brewery tours in her teens. She treasures early memories of roller skating in the warehouse and hanging out while her dad drove a forklift around the distribution center.

The daughters work side by side with their dad. Succession plans have not been formalized, Wendy says, so they feel they have time to continue to learn about the beer business.

“A lot of learning is watching what he does, understanding why he does things,” Wendy says. “As you get more involved, you learn the challenges and nuances of the business.”

Seeking support
Katie Poehling, 35, joined her family business — First Supply LLC, a 120-year-old wholesale distributor of plumbing supplies — about five years ago. She started in sales and is now COO of the company’s kitchen and bath design stores.

Making It Official: Women-Owned Business Certification

Certification as a women-owned business is a wise move for family firms planning to transition ownership to daughters. Certification enables a company to participate in various corporate supplier diversity programs and federal procurement programs. These programs, which provide for a certain percentage of their contracts to be awarded to businesses owned by women, generally require certification to ensure their female-led contractors are bona fide.

To be eligible for certification as a women-owned small business by the U.S. Small Business Administration (SBA), a firm must be “at least 51% directly and unconditionally owned and controlled by one or more women who are U.S. citizens.”

The federal government’s goal is to have 5% of its contracts awarded to women-owned businesses, according to the SBA.

The Women’s Business Enterprise National Council (WBENC), the largest third-party certifier of women-owned businesses for the private sector, says it has certified more than 14,000 women’s business enterprises in the U.S. Of those, WBENC certified 4,676 as women-owned small businesses.

WBENC president and CEO Pamela Prince-Eason says the council often works with family businesses. She says the process of certification can seem “document intensive,” but notes that doing business with corporations in general usually involves a comparable number of documents.

Family businesses that are owned in trust will have to submit trust documents to prove majority female ownership, as well as papers documenting the history of the company.

“When it comes to the company’s history, sometimes family lore takes over,” Prince-Eason says. “Someone will say it was established as a partnership, but was it 50/50 or 20/80?”

She suggests owners consult the WBENC website (www.wbenc.org) to learn more about applying for certification. Council staff walk businesswomen through each step and sometime serve as advisers in the process, she adds.

Corporations and government agencies need verification that they are doing business “with a women-owned, -operated and -controlled business,” Prince-Eason says. “They don’t want to find out later that it was just a shell company.”

Certified women-owned businesses can also take advantage of incentivized loan programs, training and networking opportunities. Some states also give tax incentives to contractors or subcontractors who use women- or minority-owned businesses for services.

Certification through a third party such as WBENC is not universally accepted. Companies seeking women-owned business designation should check with the particular government agency or company to verify what type of certification is necessary. — April Hall

Poehling’s father embraced her coming into the business, but he didn’t often step in to mentor her directly. On top of that, when she went to meetings, inside or outside of First Supply, she stood apart from the crowd. She was usually the only woman there.

When she reconnected with her friend Ashley Martin, who had joined her family’s business, the women realized they had a lot in common. Martin is now vice president of wholesale sales at NIBCO, her family company, which manufactures valves, fittings and flow control products and is based in Elkhart, Ind.

“We looked around and realized often as women, we’re islands,” Poehling says. “And there are others around the country who are the only woman in the room [at business meetings].”

To bring those women together, in 2014 Poehling and Martin formed Women in Industry, a subset of their trade association, the American Supply Association. The group, which now boasts nearly 300 members, provides networking opportunities, training and skills development.

“We have women who are fresh out of college and starting their first job, to women getting ready for retirement,” Poehling says. “It’s been a neat experience to get this group going. We had some skeptics, people who said, ‘Our industry doesn’t need that type of group.’” Poehling is grateful for the opportunity she’s had not only to connect with mentors herself, but also to connect others and perhaps serve as a mentor herself someday.

“We recognize that, gosh, this must have been even more poignant in years before — looking for mentors or examples,” she says. “Things have really changed, and I think people are now less surprised when women are engaged in industries that were formerly male-dominated.”

Support is also available in the beer world. Women now constitute 25% of the brewing industry.

While the Yuenglings support general industry organizations such as the Master Brewers Association, they, like Poehling, are also a part of a group targeting women in their industry. The Pink Boots Society, for women in brewing, celebrated its 10th anniversary in 2017 and has 56 chapters around the world.

Wendy Yuengling says her company needs to support such groups because “We’re going to be female-owned someday.”

Moran-Goodrich says she encourages women to buy franchises in the Moran Family of Brands, whether it’s transmission repairs or auto accessory installation.

“Any time I can have a woman come into our system, I welcome that,” she says. Her company’s 2017 Franchisee of the Year was a woman who owns a Mr. Transmission in Florence, Ky. The winner is chosen by other franchisees.

What does Moran-Goodrich see as the secret to her success? “I think I had just had tenacity,” she says. “My father said I would never take no for an answer.” She suspects other family business daughters have the same personality trait. “That must be the common aspect to push through these barriers,” she says.

Poehling says she’s often asked by other women how to succeed in family business.

“I think I struggle with it myself,” Poehling says. Her advice: “Be an advocate for yourself. Be well informed and know exactly what you’re asking for in the business and why you’re asking for it. Know how the company will be better if you’re in a certain role.”    

Copyright 2018 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permission from the publisher. For reprint information, contact bwenger@familybusinessmagazine.com.

 

                                  

A fruitful female partnership at Frieda's

 

Wolfgang Puck, Anthony Bourdain and Gordon Ramsey may be rock stars in the cooking world, but all foodies owe a debt of gratitude to Frieda Rapoport Caplan. A pioneer in the produce industry, Frieda almost singlehandedly introduced Americans to once-exotic, now commonplace produce items like kiwifruit and spaghetti squash. Had it not been for her, many U.S. consumers would never have tasted shiitake mushrooms, Belgian endives or passionfruit sorbets.

Frieda, now 93, still works a few days a week at Frieda's Inc., the Los Alamitos, Calif.- based specialty produce company she founded, but she long ago turned ownership and management over to her daughters. Karen Caplan, 61, is president and CEO; Jackie Caplan Wiggins, 58, is vice president and COO. Business doubled within five years of Karen's taking over in 1986. Now the sisters are starting to look at transitioning to the third generation, currently limited to Karen's elder daughter, Alex Jackson Berkley, 27, a senior account manager. Karen's younger daughter, Sophia, and Jackie's children, Frankie and Rachel, are not in the business at present.

Frieda never planned a career in produce, but her aunt and uncle needed bookkeeping help at their stand in the Los Angeles Wholesale Produce Market. She knew little math and even less about vegetables, but she wanted a flexible part-time job after Karen was born.

She got her start in sales when her relatives went on vacation. As she rang up every order, she asked customers if they needed mushrooms. Few did, but one supermarket buyer pounced. It was a mad scramble to fulfill the enormous order, involving a drive to a nearby mushroom farm with baby Karen in the car, but Frieda realized that offering things other people didn't was the key to success.

In late 1961, Frieda was working for her aunt and uncle when she was approached by the owners of Southern Pacific Railway. The railway, which owned the Produce Market land and buildings, had two stalls available at the produce market, and its owners had been watching Frieda sell for about five years. They convinced her to go into business for herself.

Frieda launched her business in April 1962 against considerable odds: Like the famous chef Julia Child (who later became a friend), she was a female in a male-dominated industry, and she sold fruits and vegetables that nobody had heard of.

Frieda's marketing savvy was the secret to her success. Kiwifruit, for example, used to be known as Chinese gooseberry. In its fuzzy brown uncut form, the fruit wasn't especially inviting, nor was its name. Earlier attempts to rename it had been unsuccessful, but once Frieda championed it and convinced growers in New Zealand to rebrand it as kiwifruit, it became a fruit salad staple. Today, few consumers know it was ever called anything else.

Frieda also pioneered the concept of prepackaged fruit. When customers confused sunchokes with ginger, her solution was to bag and label the tubers, and include a recipe that featured them. De rigueur in the produce world now, this was a revolutionary strategy then.

"When I introduce myself as Frieda's daughter—which I still do on occasion—that just opens doors," says Karen Caplan. A documentary about Frieda's rise in the industry, titled Fear No Fruit, was an official selection of film festivals in San Luis Obispo, Newport Beach, Carmel and Sedona in 2015.

Always a supportive sounding board, Caplan's husband, Al, had his own career as a labor relations consultant and was never part of the Frieda's empire. He passed away in 1998.

Karen, Jackie and Alex recently chatted with Family Business about their fruitful enterprise. An edited transcript of the conversation follows.

Family Business: One of the hardest things to do is take over from a parent who is an iconic figure. How did you step out of your mother's shadow and forge your own path as president?

Karen Caplan: In the beginning it was really difficult. People would always ask, "Where's Frieda?" I was young and trying to make my own way. Internally I struggled with it, but I never communicated it.

FB: Fear No Fruit shows that Frieda is a brilliant marketer, but you doubled revenues within the first five years you were president.

KC: Mom opened doors for the business; I grew the business. There was this small repertoire of growers nobody but Mom paid attention to, but she was waiting for the growers to come to her with product. When my mom started, it was just her and another guy or two who sold at the L.A. produce market to brokers, who sold to others. I was into selling more and making those numbers bigger. I hired a national salesperson, and two or three of us went to [trade] shows.

FB: How did you convince your mom to turn over leadership?

KC: I said, "I'm doing the job of president, but my title is vice president." I was 30 years old and I'd heard of this organization called Young Presidents Organization (YPO), and you could join if you were president when you were 30. Frieda suggested waiting till the company's 25th anniversary to name me president; I was thinking more like "Tuesday." She talked to my dad; she didn't make a big decision without checking with him. I don't know if he decided or she decided or they decided together, but I became president on Tuesday, July 1, 1986.

FB: Did you and Frieda have any disputes about your different philosophies for the business?

KC: I'd either just become president or was about to become president when I took a Dale Carnegie management course that cost about $800. For our final project, everyone in the class had to come up with a project that would save as much money as the course cost. Frieda's had a small facility at the produce market, and about 3 miles away we had a bigger warehouse and offices, about 40,000 square feet. My idea was to sell the produce market location and merge into one facility. I calculated we would save $134,000 per year. When I told Mom, she said, "OK, go ahead. Sounds good." That's the kind of confidence she had, and that tells a lot about our two personalities. She was very willing to try new things, happy to accept my recommendations, and she trusted me. She also realized she had a lot of self-limiting beliefs. She didn't see us expanding nationally, or moving out of the produce market. She's very open-minded about product, but didn't envision the company so big or so well known.

FB: Jackie, how have you forged your own path with an iconic mother and a highly successful sister?

Jackie Caplan Wiggins: From about 10 years old, I spent summer and winter vacations working—stuffing envelopes or, [when I was] a little older, on the sales floor. I had done a little traveling once I graduated college and decided not to go back, but as I traveled around the world, people would ask what I did for a living and I'd talk about our family business. They'd say, "Wow, you have a family business and you're not going into it?"

After about the 10th person said that, I realized I'd really enjoyed working in the business on vacations. No day is ever the same, and I am someone that needs a lot of change, so I made the decision to work in the family business. I don't know who was more surprised—the family or me!

A natural path for me was in sales. Karen had me join the national sales staff. I learned a lot about the business and customers, but it became evident that my passion was on the operations side. There was an opportunity to divide duties between sales and marketing and operations, so for the past few years I've overseen operations. The benefit of having been in sales is that I understand a lot of sides of the business.

FB: From the way your partnership is depicted in Fear No Fruit, it seems that Karen figures out what to do and Jackie figures out how to get it done. Are things usually that smooth between you?

JCW: Karen and I think very differently but have this way of working together and looking at things from different perspectives. And in the end, Karen is the CEO. Karen owns 55%; I own 45%. Karen is ultimately the decision maker, but I don't think either of us would make any decision that impacts strategic direction without consulting the other.

KC: Any conflict Jackie and I have had is usually around people, someone we shouldn't have kept. She gives me 100 reasons why not—and later we have to get rid of them and I have to admit she was right. When we have a lack of alignment on a decision, especially if it's an irreversible decision, we spend an enormous amount of time on it. If it's a reversible decision, we don't need to have a meeting about that.

FB: The documentary said you had some early sibling friction and Frieda had to step in.

KC: That was in 1983. Jackie had been there three months, and it never happened again.

JCW: When we're at work, we talk about work. When it's a weekend or at a family event, we do not talk about the business. When you cross over you get that tension. Karen and I are very clear on what our individual strengths are.

FB: Do you have an outside board?

JCW: We don't have an outside board of directors, but both of us belong to Vistage, an executive peer advisory group. We're in separate groups and we meet monthly with other owners and companies from outside our industry. Interestingly, a couple of members are business partners with one partner in Karen's group and one partner in my group. We see challenges when partners don't approach things the same, and it's intriguing to see how people resolve that.

FB: Was Frieda ready to let go when you took over?

JCW: When Karen took over as president, Frieda went on vacation for two weeks. It was the first vacation she'd taken in years, and it was on purpose, to show she was handing over reins. Mom was just so happy to not have to deal with running the business—but she likes handling the invoices and doing the filing.

KC: Mom once said, "I'm afraid you're eventually going to sell this business, and what am I going to do without the business?" I promised that if Jackie and I ever did sell we would make it part of the contract that she still gets an office and still gets to come in.

She would sign checks and negotiate with growers and do back-office work. She also got involved with organizations outside the produce industry and now volunteers on community boards. Now she can't walk unassisted, so she's not doing filing anymore, but she comes in three or four days a week for a few hours.

JCW: She looks at some of the printouts and some of the emails, but she's not involved in the intricacies or structure of the business.

FB: Since there are only two of you, do you have a lot of non-family executives?

JCW: Key managers—all department heads—are not family members. It's 50:50 male to female just because that's what they are. We have an org chart, which a lot of family businesses don't have, and we have clear roles and responsibilities. It's very, very structured here. I think that has a lot to do with our success, and I think that has helped us recruit. We have 70 to 75 on the payroll; some are contract employees through a temp agency that ebb and flow through the year.

FB: How did Frieda transfer ownership?

KC: I joined the company in 1977; Jackie joined in 1983. In the mid '80s, Mom and Dad were doing their estate planning. The biggest asset my parents had was the business, so they initially structured it with me having 70% and Jackie having 30%. When she had been there a few years, I remember going to my parents and saying I think ownership should be more even. It's not good to have it be 50:50, so I proposed 55%:45%. Back in the day, the one-time gift exclusion [for taxes] was $600,000 per person; the other half we paid through earnings. On Nov. 10, 1990, Jackie and I bought the business.

FB: How did the Fear No Fruit documentary come about?

KC: Originally, the idea was to videotape Frieda telling her own stories about the business as a way to chronicle the history of Frieda's. Through one of our employees, the idea of a documentary was brought up. The plan was to produce a "short" (no more than 40 minutes), but when [filmmaker] Mark Brian Smith came to show us some of the footage, he convinced us—easily—that he had enough to make a full-length documentary.

FB: Did either of you ever resent that your mom was so business-driven in an era when it was the norm for mothers to stay home?

KC: Growing up, I did have a hard time with having my mom work such long hours. It seemed that all my friends' mothers took them shopping, helped out at school and did the typical "mom" things back in the 1960s and 1970s. But Mom was also very accessible. Jackie and I had a special phone number at the office that we could call any time of day or night. My dad always got mad at how big our phone bills were, but Mom insisted she wanted to be accessible to us.

JCW: I have always been fairly independent, and didn't feel a void because my mom wasn't physically there. I was always able to reach her. Our joke was even though she was not a stay-at-home mom, she always knew where we were, as opposed to our neighbors' moms, who often didn't know where their kids were! I have several memories of her attending school events and supporting me, and it was always a treat to go to work with her. So did I resent the fact that she wasn't always at home? Absolutely not.

FB: What about the next generation?

KC: Both Jackie's daughter and son have done internships. My elder daughter, Alex Jackson Berkley, is in sales; she's in a leadership role but has no ownership. We're in discussion now on succession planning. There's nothing specific at this point, but we have been saying we're not getting any younger, and we've always said we're not coming into office at 80 and 90 like Mom. We're discussing what our financial goals and personal goals are, what the options are for leadership of company. We're working with a CPA and business attorney.

FB: Alex, what is your goal within the company?

Alex Jackson Berkley: Karen is laughing because I always avoid this question. In sales I'm trying to grow the business and push our numbers forward and to be a good leader, family member, employee. In my generation, I try to strive for a little more balance than my mom and grandmother, but I try to make sure the reason I achieve something isn't because I'm Karen's daughter but because I'm Alex.

FB: Do you hope to someday be the CEO?

AJB: Some days yes, I think I'm on that path and would be great at it, and some days I'm not sure. Produce is a perishable business and you're dealing with Mother Nature, but 75 people are relying on you.

FB: Do you anticipate competition from your sister or cousins?

AJB: I don't consider it competition. I talked to my cousins and my sister about this, and they're all exploring their passions. We're all very different. I have a passion for produce in general, not just Frieda's, but that led to a passion for the family business. They say, "You have that passion and I don't yet."

I don't even know what it would look like if they came into the business. We're not the kind of family business that will find a place for you if you want to join. It's very clear that you can't just walk in here and get a job. They know that and they respect that. My degree is in PR and communications with a minor in business. That was my first job at Frieda's: I was able to come in as they needed someone to fill that position.

JCW: Alex and I had a conversation a year or so ago when she attended a leadership course, and some of the attendees told her she needed to work outside family business to be effective in the family business. Alex came to me very conflicted because she loves what she's doing. So I asked her, 'What are you not getting that you need to get? Do you think you can't get that here and you have to get that somewhere else?' As long as she is getting exposure to the things she would get in other organizations or places, she can get it here. Alex is on the board of a non-profit school, and dealing with other business leaders, and that's something she might not even get working for another company.

FB: Do you feel you're getting the right opportunities at the right time?

AJB: Yes, I'm fortunate that I have. Karen and Jackie and other managers in the company do a great job of including me on different teams. I sit on the company strategy team; that's new for 2017.

FB: Your mom and your aunt had different feelings about having a career-driven mother. What about you?

AJB: I didn't know my mom being away and working was different than anyone else. It was never brought to my attention [except for] moments when I was the last child picked up from school, or didn't have my parents there at a school event to watch me perform. It has only become something I realized as an adult, now that I am establishing my own priorities and thinking about having children in the next few years. My mom's balance of work, life and family has definitely influenced the balance I have and intend to have when I start a family.

FB: Is there anything you'd like to be doing that you haven't been able to?

AJB: Only one—I want to learn how to drive a forklift! All the great leaders I've ever met have said, "I wouldn't ask employees to do something I can't do myself." I have never loaded a truck, and I want to know how.

KC: I did load trucks. I do know how to operate a forklift. It was a long time ago, before you needed a license. If Alex wants to learn how, we'll make sure she does.

Hedda T. Schupak is a business writer based in the Philadelphia area.

Copyright 2017 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permission from the publisher. For reprint information, contact bwenger@familybusinessmagazine.com.

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Family business boards need women directors

Global companies—public, private and family-owned—compete with everyone everywhere for everything. Good directors can help companies acquire a competitive advantage in the global marketplace. If a company does only what worked in the past, its directors will wake up one day and find that they have been left behind.

The complexities of modern society, government and business models require exceptional corporate governance in order to handle global challenges, shifts in economic climates and new risks and opportunities. To manage all of this, great companies promote inclusion, candor, courage and cohesion in the boardroom. Companies must rejuvenate their boards to maintain their vibrancy and effectiveness, and a diverse board is essential to a company's success.

As a family company changes over time, so should its board's composition. Some of the newer skills in demand are an understanding of social media and other new technologies, as well as experience in emerging markets, cyber security, innovation, global branding, corporate social responsibility, strategic talent and supply chain management. Diversity brings new, relevant perspectives to the decision-making process for boards—perspectives that take into account the latest insights on addressing these newer challenges.

As General George Patton said, "If everyone is thinking alike, someone isn't thinking." And the reality is boards that look the same gender-wise and demographically as they did 20 years ago—or even five years ago—are likely to have too many directors who think alike. Family business boards need male and female directors who will bring the best-of-the-best ideas to the table and offer the broad thinking companies need to deal with the broad challenges they face.

There are a number of ways in which women directors can build stronger boards. Here are a few of them:

• Women bring fresh perspectives. Directors must understand the complex issues the company confronts. Women like looking at the big picture before making decisions. Because women—who are generally newer to boards—are less likely to have long-standing ideas about "the way things are done" on a board, they aren't limited to preconceived notions about what kind of impact a board can and can't have.

• Women build trust. During tough times, board relationships can break down; when there are problems, it is very easy to start pointing the finger. Women on boards are particularly good at negotiating conflict and rebuilding bridges.

• Women tactfully ask important questions. Women can often raise topics in a way that listeners find less threatening, thereby making others more willing to be open; they ask the tough questions in a diplomatic and appropriate way. They also know how to disagree without being disagreeable. By the time a woman becomes a corporate director, she's learned the value of courage and candor--qualities needed when confronting an elephant in the room.

• Women are mentors. The chair of Frontier Communications and member of the Xerox and Procter & Gamble boards, Maggie Wilderotter (who is also the co-chair of WomenCorporateDirectors' Global Nominating Commission), reports that every couple of years the four women on the Frontier board have a two-day retreat with senior and high-potential women in the company. In addition, all of the board members become mentors to C-level executives for a two-year period and see them three or four times a year outside of board meetings. This is a way for the board to get to know the talent in the organization. Then, when the board goes through the succession plan, each board member presents the executive with whom he or she worked. This helps the rest of the board get to know these executives and understand their capabilities and their potential.

 

Complexity on family business boards

Sitting on the board of a family business introduces an additional dimension to board service. While all board members represent outside shareholders, those on family business boards must represent the interests of the family as well. Family businesses often face extra complexity with competing family interests and sensitive questions around succession planning. And in many cases, it can be difficult to impose strict governance procedures in family-run companies.

A survey by Professor Boris Groysberg and Deborah Bell at the Harvard Business School, conducted in partnership with WomenCorporateDirectors (WCD) and Heidrick and Struggles, showed that directors on family business boards ranked their boards' performance as less effective than that of non-family business boards on almost every measure. Most directors of family businesses said the family companies' succession practices are inadequate and a low percentage said they are advancing diversity on their boards and in their companies.

Many family companies lack an adequate succession plan. There are either too few or too many potential candidates, which creates confusion and uncertainty for investors, customers, suppliers and employees. Family companies must first position themselves for the future by investing in robust leadership development, and by undergoing succession-planning processes. Then, they must understand the competitive landscape for talent; the different characteristics of family, private and public companies; and the motivations of the executives who are best suited to a family company role. Finally, they must know when it may be necessary or appropriate to consider candidates from outside the organization and what to look for in those candidates.

In family businesses, women often are the "family glue" or "Chief Emotional Officers." Women originally entered family businesses as widows; they would ensure the transition from their deceased husbands to the next generation, and sometimes stayed at the helm for many years. Today, however, we see more and more women succeeding their fathers or uncles as CEOs of family businesses.

WCD recently formed a Family/Private Business Council whose mission is to continue to enrich the WCD community through leadership, best practices in corporate governance, education, and diversity of thought and experience. WCD's Family Business Council will be helping conduct a deeper dive into researching family businesses later this year with Harvard professors Groysberg and Bell and Spencer Stuart.

Advisory boards can be an excellent tool for family businesses. For example, one family enterprise, EHR Investments Inc., created an advisory board for its aviation financing business—EHR Aviation Inc.—in 2008 to help determine the best approach for dispensing with repossessed aircraft. EHR Investments' president and CEO, Susan Remmer Ryzewic, notes that the advisory board members had deep knowledge of the market and its key players. An added benefit for Ryzewic was the personal relationship she was able to form with the advisory board members and how helpful their expertise has continued to be, even after the completion of the board's term. "Needless to say, I wish that I had established the advisory board earlier," Ryzewic says. "We might have avoided some of our business pitfalls."

Alison Winter, co-founder of WCD and director of Nordstrom Inc. and Blain's Supply, comments, "Many family businesses will reach a critical size and complexity that compels them to seek outside directors to give them a wider perspective on how other businesses in similar sectors are dealing with the issues of growth, talent development and development of plans for transitioning to the next generation of management. This fresh set of eyes can be enormously helpful to the owners and a great opportunity for qualified women."

Diverse boards can be a competitive advantage for corporations. They can provide an outside view; overcome blind spots in strategy; raise awareness of external risks; and build relationships with governments, society and other stakeholders in ways that executive teams can't always accomplish. For family company boards, independent directors also mentor, develop business support for the CEO and help draw the line between family and business issues. Moreover, having women on a board sends a "positive signal" to the market—a signal that the company has a greater focus on corporate governance and is performing well.

Top research organizations including McKinsey, Credit Suisse and Catalyst have found in their studies evidence of a high correlation between gender diversity and significantly better financial performance.

In their 2013 article in the International Journal of Business Governance and Ethics on their study of more than 600 directors, Chris Bart and Gregory McQueen reported that women are more likely than men to make decisions based on complex moral reasoning. Women's capacity and willingness to consider multiple perspectives enables them to more consistently make fair decisions when competing interests are at stake, the researchers reported.

WCD's global co-chair, Henrietta Fore, was elected to the board of directors of each of her father's companies. He taught her at an early age to understand what it means to hold a business through good times and bad. When the general manager of a family company died of a heart attack, Fore stepped in. She initially planned to operate as the general manager for two weeks—but stayed on, successfully, for 12 years. "I went on to serve on several major company boards, including ExxonMobil, and served as the administrator of the U.S. Agency for International Development (USAID), and director of United States Foreign Assistance," says Fore. "None of us knows where this training for girls and women in family businesses will lead. The paths will be varied and fruitful, and our businesses and world will be better for it."

We need to strengthen the role of women as directors and the performance of the companies on whose boards they serve. We must move together to create corporate governance as it should be—for it will take all of us to create it. Diverse family/private business boards that are multi-gender, multi-skilled, multi-national, multi-ethnic and multi-generational can make a difference not only around the table, but also in the world, and for the world.

 

Susan Schiffer Stautberg is the president and CEO of PartnerCom, which assembles and manages advisory boards globally for governments and corporations, both public and private. She is CEO, co-founder and co-chair of WomenCorporateDirectors (WCD), the only global membership organization and community of women on corporate boards (sstautberg@womencorporatedirectors.com).

 

 

 


 

 

 

Copyright 2014 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permission from the publisher. For reprint information, contact bwenger@familybusinessmagazine.com.

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New Year's blessings

The New Year customarily brings resolutions and renewed optimism for the coming months. The highlight of my 2014 is the expansion of our family. Both our daughters-in-law have announced pending births—one this month and another around Mothers’ Day. What a tremendous blessing this is! One daughter-in-law has revealed that a little girl is on the way. Gender, of course, is not important to me as long as the babies are healthy. And certainly with respect to working in our family business, gender will not be an impediment for this next generation. More and more family businesses are establishing employment policies emphasizing hiring based on merit, not primogeniture.

However, according to Jim Kristie, editor of Directors & Boards, corporate America is lagging behind family firms. Just 4% of Fortune 500 CEOs are female, and only 16% of the directors at these companies are women. While the business glass ceiling is still prevalent—notwithstanding the naming of Mary Barra as the first woman CEO at General Motors—medicine and law have been much more balanced.

When I graduated college in 1975, women were just beginning to expand their career choices beyond the typical teaching and publishing positions. Harvard Business School had recently invited women to join their class ranks (1973), and business in a broad sense was beckoning. I began my career with a regional commercial bank that generously paid for me to work on my MBA at night. Many of my prospective male clients resisted working with a female banker, particularly one who was 24 years old. I definitely could have used a book like Sheryl Sandberg’s Lean In to deal with this concern.

Times have changed and, of course, so have the laws. Young women today don’t consider gender to be a detriment. Moreover, many women are choosing to stay home with their children while developing businesses on the side. Another pivotal improvement for working women is the availability of female mentors. Fashion icon and family friend Tory Burch, for instance, established a foundation that supports economic empowerment for women in the U.S. through microfinance, education and mentoring.

Thus, my outlook for 2014 is one of optimism for the next generation, particularly for young women. As my husband, Bob, pointed out in his Thanksgiving address to our family, “We have laid sufficient groundwork so that you, our children and grandchildren, can succeed. Starting out, you have more education and greater resources than any other generation in history … combined with guts, hard work, and imagination, you can apply your talents and resources to creating a future that will live up to your hopes and dreams.” Amen, and Happy New Year.

 

 

 

 


 

 

 

 

Copyright 2013 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permssion from the publisher. For reprint information, contact bwenger@familybusinessmagazine.com.

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Learning the business from the ground up

Creepy-crawlies, long spindly legs, winged critters, furry tails. Close encounters with insects, rodents and nuisance wildlife were only one of the challenges my sister and I learned to master when we entered our father’s pest-control business.

Our father, Bernard Stegman, founded Arrow Exterminating in Lynbrook, N.Y., in 1947. Today, Arrow is a full-service pest management company that employs approximately 100 people. Our company serves the New York metropolitan area and all of Long Island.

About 25 years ago, my sister, Debby Tappan, and I made the decision to enter the business full-time and leave our professions (teaching and advertising, respectively). In making the transition, we’ve had to overcome obstacles both in the office and in the field. We quickly realized that growing up in a family business and helping out after school as a child is not quite the same as pursuing it as a full-time career. Chief among our challenges was the need to prove ourselves to the Arrow team and to our customers.

In the office, we’ve both had to overcome being the “boss’s daughters” and everything that implies. To tackle this, Debby and I worked extremely hard to prove our commitment to, and our understanding of, the pest-control business. We’ve taken countless courses over the years in all aspects of pest control and in business management, as well. Our hard work paid off; gradually, we won the respect of the Arrow team as industry professionals and managers. Today, employee retention is at an all-time high.

Out in the field, I was often on the road, doing inspections, making sales calls and learning the business from the ground up. This was back in the days when there were very few women in this field. Someone once closed a door in my face and told me to “send over a man.” But on the whole, I found that after customers got over the initial shock of seeing a female pest control professional at their door, most were actually very pleased to see me doing something unconventional.

I realized that to establish my credibility, I had to make customers aware of my expertise. This often meant squeezing through dark, tight crawl spaces under customers’ houses, flashlight in hand, looking for bugs, rodents and nuisance wildlife. I am the first to admit that this wasn’t my favorite part of the job, but I absolutely had to do it to be taken seriously. And it worked. In its “Best of New York” feature for 2007, New York Magazine cited us as the best pest control company in the New York metropolitan area.

Over time employees and customers alike became accustomed to dealing with Debby and me instead of our father. At first there was some resistance to this transition, but eventually we proved that we had the knowledge, ability and commitment to be trusted at the helm of company in an untraditional industry for women. My sister and I have often said to each other that if we had been sons instead of daughters, we probably would have pushed our father out of the business a long time ago. But as daughters, we respect and value his opinion and have enjoyed working with him tremendously.

We consider ourselves extremely fortunate to have a very close family, and we believe those strong ties were a major factor in our ongoing success and lack of conflict. We know that working with family members can be difficult, but we’ve never experienced that. We advise other women considering going into their fathers’ businesses to make sure they have the knowledge and temperament for the business, whatever it may be. Try tackling each new aspect of the business gradually to make sure it’s what you want and that you can do it successfully.

Debby and I agree that working with our father has enriched our lives both personally and in a business sense. We have thoroughly benefited from the experience and, luckily, we continue to benefit even now. Our advice to other women is to embrace the opportunity if it’s what you really want.

Jackie Grabin and her sister, Debby Tappan, are co-presidents of Arrow Exterminating in Lynbrook, N.Y. (www.arrowexterminating.com).

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