WHAT WOULD YOU DO?Ruth Torgeson is a talented buyer for her mother's fourSummit Sports stores, which specialize in outdoorclothing. She'd like to run the company one day, but Ruthcan be abrasive in dealing with customers and employees.Karen Torgeson fears that Ruth's "attitude problem" couldsink a service business. Are Karen's fears justified?What lies at the root of the mother-daughter dilemma ?
THE DAY RUTH Torgeson threw three customersout of the store, her mother's concerns about thefuture grew. Well, Ruth didn't exactly throw themout, but that's how they felt about what had happened. They were executives of a Midwestern firm on an outing in the state of Washington andhad come into Karen Torgeson's Seattle store, SummitSports, after some trout fishing and beer drinking. Theywere loud, in a playful mood. One of them wanted to buy afly-fishing vest for his wife and asked Ruth to try it on for size.Ruth, who is 33 years old and chief buyer for her mother'sfour Summit Sports stores, happened to be the only womanpresent and agreed to model the vest.
She didn't like it when the customer remarked that shefilled it out better than his wife would. His friends laughed,but not Ruth. When he suggested in a mock whisper that sheretum to his cabin with him to take more precise measurements, Ruth called him a "sexist pig." Angrily returning thevest to the rack, she suggested that he and his friends getlost until they could show more respect for women. Retreating to the door in a huff, the offender shouted back, 'Young lady, you have a chip on yourshoulder. You can be goddamned surewe'll never set foot in Summit Sportsagain."
Karen Torgeson, who is 63, wasn't present during the incident but heard about it the next day from the store manager, Ray Dowd, who was. That night when Ruth came to dinner at herhouse near Lake Washington, Karen expressed disappointment in her daughter's behavior.
"You have an attitude problem, darling," Karen said. "Youcould have just asked Ray to wait on them. You didn't haveto throw them out.
"We have a lot of male customers who aren't liberated, I'mafraid. Their jokes are completely harmless. A lot of the people we buy from have told me you've insulted them, too. Ifyou want to be in this business, you just have to learn to control your feelings."
"Because I work in the company doesn't mean I have totake any crap from these guys," Ruth replied. "When theymake some stupid, sexuaI joke at my expense, I'm sorry, I won't stand for it."
Karen is a popular boss with her 32 employees, who aresplit among four stores that she opened in the seventies andthe Seattle office of the company, Torgeson Enterprises. Butshe has been suffering from arthritis and lately has found itpainful to keep up her hectic schedule. The time is near whenshe will have to think about retiring. Will she be able to entrust the running of the stores to Ruth, who seems to lackthe tact so essential in a service business?
By itself, Ruth's exaggerated response to the sexual innuendo was perhaps understandable, even excusable. That wasnot the first time that Ruth has irritated a customer and lostbusiness for the store, however. What is more, she often criticizes employees, and even the store managers, though shehas no formal supervisory responsibility. Would it be fair toKaren's staff, many of whom have been with the company foryears, to give the business to an abrasive person whom theyclearly dislike?
Ruth, in turn, feels Karen has been slow to recognize hercontribution. When she inquires about her mother's plans forthe business, Karen is evasive. Ruth keeps asking her father,Arthur Torgeson, a former Boeing Aircraft executive who isnow retired, whether her mother has written a will. Arthur, who was divorcedfrom Karen in 1982 but still gives her financial advice, usually says, "She's working on it." Ruth replies, "You mean Mom doesn't want to decide how to split the stock between the two of us." When Arthur admits she's right, Ruth says, "I don't think Mom ever wants to retire."
PEOPLE ALWAYS COMMENT on how much she and hermother look alike, blue-eyed, pale skin, tall—an unmistakable mother-daughter pair. When Ruthwas young, Karen and Arthur went back-packing with her in the nearby Cascade Mountains. Arthur taught her how to flyfish in the many rivers and streams surrounding Seattle.
Ruth was a self-sufficient child who had no shy, adolescent stage. Although she had close friends, she spoke hermind and never strained to get the approval of those she didn't like.
About the time Ruth graduated from high school, Karen was restless. A buoyant, talented woman, she felt a need to prove herself. With Arthur's help, she drew up a business plan to open the first Western store for Summit Sports, a New Hampshire-based company. The company was impressed by the plan and, in 1974, helped her set it up. Karen was then 47.
The Seattle store racked up record sales in its first month.Karen threw herself into the challenge of building the business. She enjoyed the people part of the work most, the dailygive-and-take with customers and staff. To promote the store,she organized hiking and rafting trips, on which she entertained the ladies and drank beer with the men. Within two years, the Seattle store was showing such a good profit that Karen opened two new stores. Two years later, she opened a fourth. She and Arthur financed each new store out of the profits of the others. When outdoor recreation boomed in the eighties—and, along with it, the rugged, casual look in clothing—the four stores reached a total of almost $8 million in revenues.
But while the business prospered, Karen and Arthur's marriage was coming apart. Now that she was meeting many varied, dynamic people, she was beginning to see Arthur's faults. He was Mr. Reliable, a comfortable old shoe whose ambitionshad faded years ago. Karen was bored.
In 1985, Karen met ayounger man in Colorado who hadreal estate interests all over the world. Donald Jayne, in hisfifties, was a well-known collector of pre-Colombian sculpture.They were married the following year.
Ruth studied filmmaking at UCLA and was active in one ofthe most militant feminist groups on campus. After gettingher degree, she went to Hollywood, where she worked forseveral months as a film editor. The long hours and constanthassling from producers exhausted her. She quit herjob andtraveled for almost a year.
While in high school, Ruth had been employed as a clerk in the Seattle store. She was thinking of going back to work at Summit Sports. Her mother was delighted when Ruth asked for a job,and in 1982 put her to work as an assistant manager in the Evergreen, Colorado, store.
Ruth showed a shrewd instinct for changing fashions in this market segment. She bought outrageously colored shirts and parkas, form-fitting neoprene waders, and fancy jewelry and watches that her mother was dubious would ever sell. But yuppie vacationers were scooping up the stuff as if it were caviar and Chablis.
After two years in Evergreen, Ruth became a vice-president and returned to the Seattle headquarters where her mother put her in charge of buying and marketing for the four stores. Karen promoted her daughter, even though she was hearing stories about Ruth's "attitude problem." Longtime friends of Karen's among the clothing makers had complained that Ruth could be snippy in her dealings with them. Karen thought her behavior might be just a cover for her lack of confidence in dealing with experienced businessrnen.
More and more, however, Karen was also hearing complaints about Ruth from loyal employees. She would ask them to help set up a display for new merchandise when they were supposed to be on the floor selling.
One day in the Seattle store Ruth discovered that not a single pair of the shipment of Cokey boots that she had orderedwas on display. She criticized manager Ray Dowd in front ofemployees.''Those boots have been here for three weeks,"she screamed.
Dowd, an amiable manager, well-liked by customers, stammered something about not being aware that the shipmenthad arrived; he clearly felt humiliated.
That night, mother and daughter had dinner together in Karen's modern A-frame near the lake. The two had taken to eating together almost every night. Karen's second marriage was breaking up, and she was alone again.
"Ray is one of my oldest and most-valued employees," Karen said about the blowup in the store. "If he leaves, we're going to lose a lot of our hunters and fishermen. How could you chew him out right there, in front of the others?"
Ruth acknowledges that she shouldn't have attacked Ray in public. Nevertheless, she feels Dowd and some of the other employees are too lackadaisical on details.
"What you don't consider," her mother replies, "is that people resent taking orders from the boss's daughter. You have to earn their loyalty."
"Mom, they'd do anything for me if they knew I was someday going to own the company, that they'd be working for me," Ruth says. "Right now, I have no authority. Ray Dowd got along fine with you, but hates the idea of working for a younger woman who won't let him get away with things."
IN THE MONTHS after their argument, Ruth meets a lawyer she had known in California. He visits her in Seattle and proposes. Marrying Adrian may mean moving to San Francisco. Ruth would hate to give up her work. Faced with a major decision, she is even more frustrated about being in the dark about her future with Summit Sports.
Seeking advice, Ruth goes to her father, who has been seeing a lot of Karen since she and Donald Jayne decided to get a divorce. Ruth tells him she is considering marrying Adrian and asks what will happen if her mother dies without a will. He tells her they will probably have to sell the company in order to pay the estate taxes on Karen's two-thirds of the stock. Ruth asks him why there is no plan.
"Your mother has been agonizing for months over what to do with the stores," Arthur says. "She wants you to have the business. But she fears you are just too abrasive to managea company that depends so much on pleasing customers."
"Why am I spending my time working so hard for this company, trying to prove I have the potential for taking it over, if nobody is building toward that?" Ruth says.
WHEN SHE LEAVES, Arthur realizes that he has to do something soon. He would like to give some of his stock to Ruth. But he has heard his ex-wife's doubts and knows why she has them. Karen's future income depends solely on the capital she has in the business. He did not mention it to Ruth, but Karen has discussed seriously the possibility of selling Torgeson Enterprises. One option would be to sell it to Ruth, but Karen would have to finance any buyout, which might further jeopardize her financial future.
Ruth is entitled to know where she stands, Arthur thinks. The logistics of marrying Adrian and staying in the business can probably be worked out. But the basic questions remain: Should the business be passed to Ruth at all? Can she maintain profits so her mother is assured of a comfortable retirement? Can a management structure be devised to smooth the transition and prevent her personality from destroying morale? Or should they sell?
Some suggested answers to these questions follow. See whether you agree.
John A. Davis is executive director of the Owner Managed Business Institute in Santa Barbara, California.How the experts see itCONSULTANT
BARBARA HOLLANDERPresident, Barbara HollanderAssociates, Pittsburgh.
The sexism incident is dramatic, and it would betempting—but misleading—to focus exclusively on it.
Although one might question Ruth's style of handling the offender, she cannot be faulted for responding as she did to blatant sexual harassment. Sometimes brazen behavior needs to be countered with verbal brass knuckles. The incident may not be an indicator of Ruth's "attitude problem." Indeed, too manypeople tend to lump women's legitimate reactions to sexism in business with an abrasive attitude.
The Torgeson family should do the following:
1. Establish a succession and estate plan. The family must take immediate steps to protect the business in caseKaren is run down in the parking lot by a beer-drinking customers. Until the ownership issue is decided, Karen can put some of the voting stock in a trust in order to minimize estate taxes. She can buy insurance so that the successor could eventually pay estate taxes. Long-term, the estate plan must spell out who will control the company upon Karen's death.
2. Start addressing family dynamics. That the parentsare divorced and yet retain ownership makes this situation particularly difficult. Ruth needs to stop playing one parent against the other, and Arthur needs to get out of the middle between mother and daughter.
3. Agree on a career development plan for Ruth within the business. It is not enough for Karen to tell Ruth that she has an attitude problem. She and her mother need to agree on a concrete plan that will give Ruth opportunities to build on her strengths and address legitimate weaknesses.
4. Develop a plan for Karen. What are her priorities? Are her expectations for a retirement income realistic? Can mother and daughter be a working team? Shoult there be a spinoff?
BOBBIE RUCHVice-president and general manager, Olsten Services, Columbus, Ohio.
The Torgesons need a family business plan. Ruth has the most to gain, so I would advise her to take the lead in shaping a dialogue that will steer the family toward such a plan. First, however, she has some serious soul-searching to do.
Ruth seems more worried about "Mom dying without awill" than about Karen's long-range plans for the business. She ignores Karen's financial needs for retirement as well as her mother's emotional needs as the founder.
For all their dinners together, mother and daughter haven't covered much ground. If Ruth can talk to Karen (instead of Arthur), she'll lower the emotional pitch by asking such questions as: "VVhat can I do to improve? What do you need to see from me before you're comfortable giving me more authority?"
Her mother is equally shortsighted. While 62 might not be the age to retire, it is past the time when a business owner should start planning for succession. Karen has abdicated her majormanagement responsibility: to provide for the future of the company.
Ruth has to carve out her own role in the business, but the family-—primarily Karen—must clear the way for her, too. VVhat has Karen told her staff about Ruth's role and relationship to them? By avoiding such questions, Karenhas set up a scenario in which people do "resent taking orders from the boss's daughter" and Ruth has to "earn their loyalty."
With the issues on the table, Karen might be able to back up Ruth and buffer her daughter's impact on other employees while giving Ruth a chance to learn the business and demonstrate thatshe can run the company. Since Ruth may not be able to do the job successfully, Karen needs to be ready with a fall-back plan that will not ruin the personal relationship between them.
Ruth's relationship with senior male managers such as Ray Dowd is another potential problem that may not disappear even after the family issues are settled. While lingering sexist attitudes may be to blame, it is clear that a "militant feminist" doesn't have a snowball's chance of succeeding unless she has a clear definition of her role and a mature understanding of the leadership responsibility that goes with it.
BETTY LOU RUCHPresident, Olsten Services,Columbus, Ohio.
There is a simple way to start preparing Ruth forsuccession: Make her the manager of one store, with an option to buy; agree on goals for the store, and, assuming she meets those goals, on a date and a price for the sale. At the very least, that will permit the mother to evaluate Ruth's competence for running the business, and for Ruth to assess her own interest in doing so.
I'm not convinced, however, that the mother is willing to think about parting with the company. In a way, the business is the only thing left for her to nurture. Her daughter no longer needs her. She doesn't have a solid relationship with a man. The business is her baby; her employees love her and are sortof an extended family.
Mother and daughter are from entirely different generations. Karen earned her brownie points by playing up to men; Ruth earned hers by being an up-front person. That the mother is still concemed about pleasing men suggests she is insecure indealing with Ruth's problem.
Like other proud founders, Karen may also overvalue her company. If she thinks it's worth, say, $10 million, and Ruth feels it's worth half that, she may foresee disagreements over the price of a buyout.
The family may not be able to settle these issues throughthe one-on-one discussions that seem to be their preferred method of communicating. Ruth should propose that the three Torgesons consult with a tax accountant or financial planner or a team of financial advisors.
Or maybe with the support of a financial advisor, Arthur can get the two women to work together constructively and develop a succession plan.