Alan Crane brought his son and nephew into his highly successful carton company. He was doing everything right —until their management styles began to collide.
STORIES OF ALAN CRANE'S TEMPER are legendary at the Crane Carton Co. in Chicago. Typical was the day that Alan, while patrolling the plant, found a loaded pallet blocking the fire door. According to a veteran employee, the company founder and general manager blew his stack, chewing out the nearest worker and ordering the poor man to stop what he was doing and got a forklift to remove the merchandise immediately.
When the lift arrived, the veteran employee says, "he shoves this guy out of the way, jumps on it, and moves the staff himself, and, for good measure, he cusses out a couple of other guys who had nothing to do with the situation."
Employees still talk about the time when, because of a paperwork error, a batch of cardboard for a packaging order was printed on one side with black instead of blue. "It was pretty bad around here," says another worker. "Alan yelled at everybody. He just couldn't understand how such a terrible thing could happen."
Old-timers in the company didn't always like Alan's style but they understood and tolerated it because they knew bow hard he had worked to build the company. Alan, and a partner whom he bought out when he retired, started the company in 1962 with $7,500 worth of used machinery. Alan steered Crane Carton successfully through the sixties when industry giants were swallowing up the little guys one by one. In 20 years he had made it one of the largest independent manufacturers of cartons in the country, with gross sales that this year could reach $26 million.
Alan's accomplishments perhaps excused his occasional tantrums. During the eighties, however, his style of dealing with people began to create real trouble. By 1982, the company had 115 employees, many of whom were members of a new generation and remembered little of the pioneering days. They were frequently upset by Alan's penchant for countermanding orders, dressing people down in public, and keeping everyone on edge.
This management style exploded when Alan brought his nephew, Andy Weil, and his son, Bruce, into the company. The three had distinctly different styles and personalities, and when they began working together, face to face, on a daily basis, sparks were generated throughout the company.
Andy Weil was a corporate airplane pilot before coming to Crane Carton in 1981. He arrived a year ahead of Bruce, who had taught skiing and worked as a firefighter in Vail, Colorado, for a couple of years after college. Both had previously worked summers at the company but they were not given management titles when they joined the business full time. After an apprenticeship, Andy, now 42, gravitated to the factory and eventually moved up to plant manager. Bruce, 34, started selling and became sales manager. His sister, Jennifer, 37, joined the company two-and-a-half years ago, after a career as a teacher and a technical writer; she's now one of two customer service reps.
Andy was a perfectionist who insisted on managing by the book and was controlled emotionally. His obsessiveness about detail sometimes brought him into conflict with Crane's workers. His approach to managing was bound to clash with Alan's. "You get emotional and you're dead," he believed. "The employee remembers your biting comment. You have to carefully weigh what emotion can do to your effectiveness."
Soon after coming aboard, Bruce Crane took a keen interest in all levels of the Crane operation — even more interest, some said, than was appropriate. More laid back and soft-spoken than his father, Bruce nonetheless had strong ideas about how a well-managed company should be run. He believed successful company leaders respect lines of authority and delegate to middle managers in order to help them gain self-confidence. He argued with his father about losing his cool in front of employees, ignoring organizational channels, and trying to run the company singlehandedly.
For several years life at Crane Carton was more tension-filled than any of the three men at the top had anticipated. Alan certainly had never expected, when he brought on Andy and Bruce, that he was laying a minefield for himself in his own company. Unlike many founders, Alan was willing to share power. He was not thinking about retiring; far from it. He simply felt it was "time to hand over a little responsibility, to let the second generation start running things." According to all the family business gurus, he was doing the right thing.
What he could not fully appreciate was how painful the process of bringing in a new generation can be. To a great degree, his collision with his son and nephew typified generational conflicts that occur when an entrepreneurial company has grown beyond the reach of its founder and must develop an organized style of management. Some of the hottest battles of succession are fought around issues of leadership style.
"Me skills that make for a successful entrepreneur not only aren't well suited for later growth and development, they must be overcome if a transition to a new stage is to occur," says Craig E. Aronoff, director of the Family Business Forum at Kennesaw State College in Marietta, Georgia. Leon Danco, director of the Center for Family Business in Cleveland, puts it this way: 'The entrepreneur-founder is like a bush pilot, flying by his wits and instincts. You can't fly a commercial plane that way. He's now got to go by the gauges, and share responsibility with people who have special expertise."
Crane Carton is now flying more by the gauges. The 66-year-old founder, and his son and nephew, have come through most of the storms of transition, and today the company is managed in a much more professional manner. Given their differences at the start, their success is a tribute to the art of compromise.
ALAN CRANE acknowledges that his style is different from both Bruce's and Andy's. "I'm not an organized person," he says. Sitting in his office at the factory, his antique, rolltop desk cluttered with papers, Alan keeps glancing nervously at the clock on the wall. "I don't function well thinking through several solutions and taking a lot of time to decide which is best. I'd rather make 15 decisions right now and face the fact that three or four are going to be wrong than sit around talking. But I'll tell you this: Time is not your friend in a job shop!"
In the years when Crane Carton was hell-bent for growth, Alan's machine-gun style of decision making served it well. By the early eighties, Crane was making 10,000 tons of paperboard yearly, which it turned into packages ranging in size from little boxes for spark plugs to big ones for pizza pies. The paperboard was cut to customers' exacting requirements, printed in up to six colors at each run, shaped, glued, and shipped at the rate of more than 2 million cartons a day.
Alan knew everyone in the plant by name. They knew he and his partner had created the business by spending their mornings visiting customers, their afternoons cutting and laying out patterns, and their nights running the presses. Alan took off few weekends in those days. He occasionally worked 22 hours straight. His hands-on approach was his greatest asset. He was just as apt to be wielding a wrench on a malfunctioning printing press as poring over the books in the office. Older employees always took the long view when Alan went on the warpath. "Sure, he's a hard man to work for," says Nat Randle, printing foreman and a 14-year veteran. "But he's straight and fair. You don't get that everywhere."
Unlike his father, Bruce Crane has an abundance of dark hair and Tom Selleck-like bushy eyebrows and mustache. Unlike his father, he has no clock on his office wall. "My father and I are very different persons," Bruce says. "I tend to plan things carefully, move more slowly, and reevaluate my decisions. I don't have the same drives as my father."
Although Alan was far from pleased when his only son dropped out of college at 19, acquiring a steady girlfriend, a customized Ford van, and very irregular living habits, their relationship, survived. Bruce later returned to school, earning a degree in physics from Grinnell College. But he still resisted settling down. "There were things I just had to get out of my system," recalls Bruce, who is now married and has a daughter. "I didn't want to jump into the work world and spend my life as a frustrated skier."
Company veterans recall Andy Weil's early days as a plant manager with wonder and alarm. "He picked up this industry like a sponge," says one. "There isn't anything mechanical that he can't fix." That ability translated into plant efficiency and quick solutions to complex problems. One worker recalls calling Andy at home in the middle of the night because a printing press had broken down and no one could find the malfunction. "Right over the phone he told me what to do," says this employee. "It was like he had a set of blueprints in his head."
Some older employees had problems with Andy's style. One 15-year veteran recalled that Andy was always taking notes. "Everything had to be just right," the man says. "You couldn't talk to him or he'd get mad." Unlike his uncle, however, Andy did not display his displeasure with outbursts of temper; he tended to hold it in and remain silent. Even today, emotion for him is the enemy.
Andy's style was shaped in part by his piloting experience. A graduate in aeronautical engineering from Western Michigan University, he flew corporate jets for an Ohio company for 10 years. Over the desk in Andy's office is a large color photograph of the instrument panel of a Beechcraft Starship, a marvel of engineering design and precision. Andy himself is a handsome man with the everything's-under-control manner of the airline pilot in a television ad. He is direct but very careful in his comments — no need to alarm the passengers.
In some respects he found the transition from flight to factory not too difficult. "The technical aspects of flying cover only about 20 percent of the job," he says. "The other 80 percent is working effectively with your co-pilot, building confidence so you don't make snap decisions." At Crane, he adds, smiling, "the worst thing you can do with a thoughtless decision is bankrupt the company; in the air, a bad decision could have more permanent results."
If Andy thought Crane managers had to "fly by the gauges," however, his uncle was still the adventurous bush pilot who was in on every decision. "The company had been a one-man show," Andy says. "Alan was on top of everything all the time. And when a mistake occurred, he wanted everything changed right away." Andy had learned it was important to develop capable middle managers answerable to him and confident in their own responsibilities. But his efforts to delegate often backfired. Andy was, after all, not a Crane; he could claim neither the authority of the father, nor — when Bruce joined the firm — the aura of the only son.
Bruce and Andy did not mesh perfectly either. Since Bruce was in sales and Andy in the plant, they had different, sometimes conflicting agendas. Bruce wanted the customer's needs met on schedule, did not appreciate delays, and freely offered ideas for improving operations. One employee says that Bruce tended to become "a kind of Tinkerbell, bouncing in an out of situations and offering his advice uninvited. And since he was the boss's son, people felt they'd better listen." Although he carefully weighed alternatives before making a decision, the decisions too often were his and only his. When members of his salesforce encountered obstacles within the company, his style was to run interference personally for them — an indication that he may be more like his father than he realizes.
Alan did not take counsel humbly from his son or nephew. Employees recall that he occasionally clashed openly with Andy on the factory floor. His arguments with Bruce were apparently behind closed doors. Alan would inevitably get his way. But Bruce and Andy also had another strategy for resisting Alan's actions. At times, they simply tried to wait him out.
On one occasion, Alan insisted that a chalk board be mounted near the truck dock and that forklift operators be required to keep a running tally on it of what they load onto trucks. That way the company could track items that customers may complain were missing from a shipment. Bruce contended that Alan's idea was fine for a small company, but given Crane's output, it would consume too much of the forklift operators' time. As for Andy, he felt that a better way to ensure that orders were filled accurately was more efficient paperwork and better coordination between front office and factory foremen. He proposed a method by which a clerk would double-check the order after it went from factory to loading dock and keep a tally on paper. Alan said, "Put up the board!"
They didn't do it. That created a state of unresolved tension that lasted for weeks, until Alan observed that the paper check was producing acceptable results and quietly dropped the chalkboard ultimatum.
SUCH RUN-INS ARE TYPICAL of many family firms in which a personal style of management still prevails. John L. Ward, a professor at Loyola University and author of Keeping the Family Business Healthy (Jossey Bass, 1987) argues that once an organization grows past 40 employees "effective informal communication begins to suffer ... and the organization needs to replace the leadership of a powerful individual with the leadership of powerful management systems."
Bruce and Andy felt that Crane Carton needed such systems. They believed that Alan didn't see the larger implications of his behavior. In the case of the blowup over the pallet blocking the fire door, for example, the founder had ordered the nearest man to pull up a forklift and he, Alan, had personally moved the obstacle. But, notes Bruce, that didn't explain how the load got there in the first place. And it didn't take into account what happens when an employee is suddenly pulled off a job. "The carton industry is so lean," Bruce says, "that we don't have any spare workers standing around, so if you grab someone who's been loading pallets on a truck, you set up a chain of delays and complaints that can cost you a customer in the long run." Besides, he says, the "quick fix" embarrassed an innocent worker and undercut the authority of the foreman.
SIX YEARS LATER the climate is much different at Crane Carton. The three top bosses generally deal with one another in a calmer, more reflective manner. They meet weekly along with the chief financial officer and the company's quality assurance specialist. They rely on their department heads for information, and Alan feels more relaxed about staying in his office instead of roaming the plant looking for answers himself.
Without anyone waving a white flag, confrontation has yielded to compromise. For everyone, life in the plant is less hectic. Eustaquio Romero, a cutting pressman and 12-year Crane employee, remembers the turmoil at the top but feels he was not overly disturbed by it because he had always been treated fairly. "Things are better now," he says. "Not perfect, but better."
Bruce has discovered that modem management doesn't come as easily in life as in a textbook. He acknowledges it takes time and effort to solicit and honor the views of others.
Andy says he has come to appreciate the difference between working with a co-pilot in a company jet and running a carton factory. "If I go in talking about team spirit all the time, I'll only get frustrated," he says. "Everybody isn't enthusiastic about the job." He is trying to learn to be a good listener. "Our employees are our greatest asset, more important than the printing presses and the die cutters and the lift trucks. Without them, we're nowhere."
Most remarkable, even Alan seems to have gotten religion. "I'm convinced I have to go through the proper supervisor when I see something wrong out on the floor," he says. "I don't go to employees directly anymore. And I don't lose my temper either."
How come everybody at Crane Carton now sounds so upbeat? What accounts for this seemingly triple change of heart in men with such basic differences of style and viewpoint?
Ironically, Alan was both a big part of the problem and a big part of the solution. At his suggestion, the three began to consult with Peter Chinetti, an industrial management psychologist who has worked with family-owned businesses since 1968. None of the family members recall the precise issue that brought them to the psychologist, though Bruce says that it happened in 1984 when his cousin and father were often "at each other's throats."
In the beginning, all three met with the psychologist for hard "honesty sessions," in which he tried to show each one how he is perceived by the other two. None of them could handle criticism and were inclined in difficult situations to blame rather than seek constructive solutions, Chinetti says. Alan felt Andy was too rigid and wouldn't listen to him. Alan, in his dealings with Andy, could be punitive and vitriolic, which made his nephew resentful. Bruce's difficulties with Andy were complicated by Bruce's feeling that his cousin did not share his feelings and did not socialize enough with him outside the office.
Chinetti worked with Alan to show him why his behavior was getting reactions that were precisely the opposite of what he wanted. He taught Andy ways to avoid pushing Alan's "hot buttons," and also coached him on a looser management style that would support his employees rather than making them fear they would "get their heads cut off for a mistake."
As for Bruce, Chinetti tried to convince him that he and Andy didn't have to be close pals for them to have a good working relationship. The cousins had very different personalities and interests outside the office. Chinetti emphasized to Bruce that Andy would never be the kind of person who talks freely about his emotions and personal life. But they didn't have to go camping or play golf together or socialize frequently in order to support each other in the business. They didn't have to be the best of friends in order to work toward common objectives.
The Crane family's strong sense of loyalty has encouraged compromise. Alan may have a mercurial disposition, but his storms tend to pass quickly; none of the three seem to carry grudges.
Alan's apparent willingness to provide for the family's future in the business strengthens the family ties. About 18 years ago, when Bruce was only 16, Alan changed the structure of the firm from a corporation to a limited partnership, establishing more than 50 trusts which have ownership in the names of various family members and their present and future decendants, including Alan's six grandchildren and his second wife. He says he set up the trusts partly as a way of passing ownership to the next generation without incurring a heavy inheritance tax, and partly to protect the family from liability lawsuits.
The trust arrangement means that Alan is no longer the majority stockholder. There is always the possibility that the nonfamily trustees, who have voting power, could gang up and oust him. "I think the legal arrangement says something about the trust and respect he's always had for us," Bruce says. "You don't do something like that if you're selfish and insecure."
Alan says, 'They could kick me out tomorrow. I know that, and I've never given it a minute's thought. I know these people."
Another saving grace at Crane Carton was its understanding workforce. The nonunion company has always paid wages that were competitive with the best in the industry; the Cranes provide excellent benefits (a family health insurance plan with a $400 deductible costs $10 a month) and has a history of extending itself in time of need. "Alan may rant and rave around here," says one worker, "but if you've got a personal problem and go to him, the man is a marshmallow. You can go to Andy and Bruce, too — same thing."
Cranes' employees have noted the changes taking place in their bosses. Several commented on Andy's sensitivity and maturity. "He's grown in the job," says one. "He's turned into a caring person." A few others, however, contend that Andy's listening skills are still in the formative stage.
Alan has cut down his schedule a bit in recent years, as a concession to age. He works only 10 hours or so a day and is taking more time off with his wife. Characteristically, he goes about his recreation with a passion. He is an accomplished skier (a family addiction), shoots golf in the upper eighties, and works out regularly. Still, Alan brings work home and even talks about it when he's "relaxing" on his 40-foot cabin cruiser on Lake Michigan.
The family business literature is filled with stories of founders who have fought against change even when it was clear that, without it, the business would sink. Alan Crane was not one of those. It is significant that Alan himself suggested that the family consult a psychologist. Alan seems proud of his conversion. To illustrate, he mentions a recent incident in which a clerical error led to a printing overrun that produced 140,000 more sheets than the customer had ordered. "I didn't raise my voice," Alan recalls. "I never said a word." He bit his lip, he adds, because "yelling isn't effective," and also because "frankly, I can afford to take a loss nowadays."
Jennifer Crane says the error, in fact, cost the company tens of thousands of dollars. It was discussed, but at a regular staff meeting, during which she says Alan joined other managers in trying to identify the reasons for the slipup and ways to prevent it. Alan's reaction, she feels, suggests how he has mellowed.
WHILE THE GOOD ALAN has surely changed, some it doesn't come naturally and Bad Alan occasionally reappears. "You have to understand that Alan is a self-starter," says Don Roscoe, the company cost estimator and a 24-year employee. "So bureaucratic system comes hard for him. In the beat of battle, he'll still circumvent it at times, and then we have to put it back on track."
Crane Carton is doing very well. In 1990 the company expects to gross up to $26 million, churning out paperboard boxes at up to 60,000 an hour. By any standard, the company operates a highly efficient plant. Rejects by customers comprise only about one-tenth of 1 percent of production, and the amount of paperboard lost through cutting, trimming, trial runs, and error comes to less than 7 percent a year; both are considered excellent figures in the industry.
Asked if he worries that the second generation may not be able to handle the pressure, Alan's comment is revealing. He says that if he spent as much time talking and planning as Bruce and Andy do, sales would plummet by 50 percent.
If his conversion is not complete, if after years of counseling Bad Alan occasionally shows his face, it only confirms how difficult it is for anyone to unlearn long-standing behavior patterns. As with many reformed business founders, the battle to keep Bad Alan under control is likely to continue.
Alan quickly recovers from his point. "Now don't get me wrong," he says about Bruce and Andy. "They're both doing a damned good job. They have great intelligence and boundless energy. They've taught me things. I'm proud of them."
THE CRANE CARTON CO.
Product: Cardboard boxes for everything from Crest toothpaste and A.C. Delco spark plugs, to cheese, crackers, and popcorn.
1989 revenue: $23 million.
Founders: Alan Crane and George Duncan, partners.
CEO: Alan Crane.
Family involvement: Son, daughter, and nephew of Alan Crane.
Ownership: Stock distribution to 50 trusts in the names of numerous family members.
Goal: Replace personal, one-man management with modern corporate organization and procedures.
HOW TO MANAGE YOUR KIDS
When kids and other relatives come into the business, the owner bears most of the responsibility for seeing that they work out. Alan Crane of Crane Carton has given a lot of thought to what it takes to successfully manage family members.
"First," he says, "you must be exceedingly secure and independent. If you live vicariously through your son or daughter, the arrangement will fail, because you can't accept the kids' mistakes. You take everything as a reflection on yourself. The kids need the right to make mistakes; they need permission to fail. That means separating your life from theirs. And that doesn't come easy."
Second, Alan says, "You have to listen to what they have to say. And that's hard too, because a parent is used to telling his child what to do, even after the child is an adult. If it's a regular employee who comes to you with a problem, you try to study it objectively, from the problem's point of view. With your child, you may try to solve it yourself, and tell the kid, then and there, what to do, even when dealing with his own children."