Rough Rider

By John A. Davis

WHAT WOULD YOU DO?: From the age of 2, Boyd Makewell Jr.'s three children have been taught that they are some day to run the building supplies company founded by their grandfather. But Boyd's actions seem calculated to undermine his words. He terrorizes the whole family and keeps them and Makewell Building Supplies under his firm control.

Boyd Jr. fired his oldest son, Boyd III, and demoted his daughter, Babs Dean, when she protested. Babs plans to meet with her brother to decide whether she can stay in the business and, if she does, how best to cope with their father.

Such tyrannical fathers in family businesses are not uncommon. The case is based on an actual family, but names and some details are fictional. At the end, four experts advise Babs and her brother.

-Ed.

"STUBBORN, quixotic, outspoken, self-centered, and difficult to understand." Those were the adjectives used to describe him in a local newspaper story. Boyd Makewell Jr., CEO of Makewell Building Supplies of Savannah, Georgia, would probably agree. Even his detractors admit that Boyd, now 63, is a colorful character.

Descended from a Civil War colonel who led a Rebel charge at Chicamauga in 1863, Makewell is steeped in the history of the Savannah area. Horseman, hunter, and socially prominent businessman, he charms the ladies at Savannah galas with entertaining stories and monologues about his forbears.

To his family, however, Boyd Makewell is an impulsive and volatile bully, a man of violent temper who is capable of verbal and physical abuse. Last year Boyd fired his oldest son, Boyd III; he no longer talks to him, and won't attend gatherings at which he will be present. His daughter, Barbara Dean, defended her brother, and was stripped of her titles of chairman and CEO and demoted to vice-president for public relations.

The business began with Boyd's father, a Scotch-Irish farmer in Georgia who opened a carpentry shop making doors, sashes, and shutters. The shop grew quickly into a small manufacturing company that distributed a full catalog of specialty construction items throughout the South.

The business prospered and the father became a millionaire. But Makewell Building Supplies nearly went under during the Depression. Boyd's father was millions of dollars in debt, his health deteriorated, and the family suffered. At 21, Boyd Jr. took over Makewell but soon went off to war. Upon his return, helped by the postwar construction boom, he slowly rebuilt the struggling company.

From the time they were children, Boyd's two sons, Boyd III and Peter, and his daughter, Babs, understood that the three of them were eventually to run the company. Babs Dean, now 38, recalled what it was like:

"The company was the only thing that really mattered to us; it gave us our identity. It had been built through blood and great distress and had almost destroyed my grandfather. All of us realized the company was the golden goose. But it was only going to produce more money if we could remain united. So we were educated around the dinner table to run the company from the time we were 2."

Babs was the oldest child and the first to enter the business. She joined Makewell Supplies in 1973 after her grandfather died, and, at 21, was immediately given his title of chairman. She headed a five-member board of directors who were all insiders, including the company's treasurer, its lawyer, and her mother and father. Boyd Jr. remained president and chief operating officer. As he explained it to Babs, her two uncles — Boyd Jr.'s brothers who were never active in the business — inherited 49 percent of the company stock from the grandfather. Making Babs chairman would help assure the business stayed with their side of the family.

Babs's brother, Boyd III, did not fare as well in his first steps at Makewell Supplies. Like his father, he was impulsive and confrontational. As a boy, he had excelled at manly sports such as football and lacrosse. Growing up, he talked back to his father often — and was beaten when he did.

Boyd III was already married and had a child when be began working with the company in 1979 at 25. At the time, his father still made all the big decisions, although he had made Babs the CEO and retained for himself only the title of chief operating officer. Babs was doing everything — overseeing hiring, ordering for the plant, setting up computer systems in the office, balancing the books. Boyd III was given no title and only vague responsibilities. He was sent into the field to sell.

That lasted about two years, and then he quit. For the next few years, Boyd III embarked on a number of business ventures, none of which succeeded.

Meanwhile, in 1980, Peter, age 24, entered Makewell Supplies. According to Babs, Peter was the favorite son. While growing up, he had perhaps learned from watching Boyd III's punishments and had adopted a more accommodating style. "Peter weaves like a snake charmer around father," says Babs. "He never approaches things directly. He'd never say to father, 'You're absolutely wrong on this issue.' Instead he'd say, 'What would you say about doing it this way?"'

When Peter arrived at the company, he was, like Boyd III before him, given no title, no formal responsibilities. But Peter was gregarious and charming like his father, and he also quickly demonstrated a talent for management.

In the early eighties, Peter and Babs were virtually running the company, while Boyd Jr. busied himself with some of his other passions. Their father gained a reputation locally as a sportsman and breeder of thoroughbred horses. He also became a leader in a society of Civil War buffs that held re-enactments of famous battles. During one such event, the crowd began to stray onto the battlefield, which was a confused melee of uniformed men and horses. An angry Boyd galloped over to keep the spectators back and his horse trampled a child. (She recovered.)

Whatever he does, Boyd likes to be in charge. He was not about to relinquish control of the company to Peter. But he allowed Peter to talk directly with plant and sales managers and the younger son was growing in responsibility. With Peter as a buffer, Boyd III thought he might succeed at the company. He asked for a second chance, and his father agreed.

All through the eighties, the business drifted along, following the ups and downs in the construction industry. But Boyd Jr.'s mood swings and tantrums no doubt contributed to its lackluster performance. He was a perfectionist who would berate the lowliest employee for an infraction, yet had no vision of the company's future. For months he would neglect the business — only to return and with olympian energies try to fix the problems of the moment.

For a while, Babs, Peter, and Boyd III worked well as a team. Peter managed to keep his brother and father from fighting. Babs played a nurturant role with all three and helped them to talk to one another about family and business problems. Boyd had a softening effect on the overconfident Peter, who could be tough in dealing with employees. Both brothers spent a great deal of time traveling, bolstering the company's sales distribution network and its customers. Sales were beginning to climb, and there was renewed hope in the company.

Boyd had taken care to set up an estate plan. But none of the children owned stock. The money and Boyd Jr.'s stock were all in trusts that he had set up for the three of them and his seven grandchildren (Boyd III and Peter each had two children, and Babs had three). None of the money could be taken out of the trust.

Boyd III, Peter, and Babs wanted to see the company grow. To do that, Boyd III felt that Makewell had to pay more attention to its employees. He devoted himself to holding onto Makewell's best salesmen, who drew small salaries in addition to their commissions and were grossly underpaid compared with the industry standard. He went on sales calls with them, obtained funds for local advertising support, and even paid them from expense budgets — without his father's knowing about it — so they could raise their families decently.

In December 1989, Peter received an offer from his father-in-law to work for him as CEO of his $50-million construction company in Atlanta. It was a generous package, and Peter went to his father to talk about the deal. Boyd's reaction was surprisingly reasonable: he explained to his son what to look out for in the negotiations.

Boyd Jr. never expected Peter would accept the offer. When he did, the second meeting with his father brought, in Babs's words, "explosions...rages...thunderstorms."

Ann Makewell speculates that while her two sons were loving brothers and rarely argued at the office, the younger son left because he feared that he and his brother had such different styles, they could never run the company together.

Boyd Jr. was crushed when Peter left the business. After he left, the stage was set for the next confrontation between the father and Boyd III. One day the father suggested coldly that Boyd III take a two-week vacation. The son wanted to participate in a polo match in Virginia, and Boyd Jr., a polo champion, wished him luck.

When Boyd III returned to work, his father fired him. The father had discovered Boyd had appropriated funds for advertising and was paying out large amounts in expenses to the salesmen. These expenditures were squeezing profits, he fumed.

Babs was furious at her brother's firing, and told her father so. He has since not only demoted her, but has begun criticizing her and calling her a "stupid bitch."

Like her mother, Babs understands her father and feels it is too late to change him. The two women have been intimidated by him for years; he has even slapped them in fits of anger. But Babs feels she has proved herself capable of running the business by herself and is therefore in a quandary. Should she stay with the company? Boyd Jr. is still very fit and could be around the business for another 20 years. What can be done to prevent her father from wreaking more destruction on the company and in the family? And what is her obligation to her brothers?

Boyd III pointedly reminded her in a letter that he fully intends to return to the company some day. But Boyd has not demonstrated that he has management ability or good business judgment. She hopes that he'll succeed in his new ventures, and is even willing to help him raise money for them.

Babs is also busy with civic activities: She was the first female president of the Chamber of Commerce and organized Savannah's first symphony orchestra. She is well-connected and could start with another company if she chooses to.

On a Thursday in June, Boyd III agreed to meet Babs to talk about their "next step." Babs has two days to think of her own next career move and a game plan to propose to Boyd III. What should she tell him?

What follows are some suggested answers. See if you agree.

— J.D.

HOW THE EXPERTS SEE IT

CONSULTANT

JOHN A. DAVIS
Psychologist and executive director, Owner Managed Business Institute, Santa Barbara, Calif.

THIS CASE is an extreme example of a father who keeps his family in check through terrorism. The purpose and end result of this terrorism is to keep attention focused on what Boyd Jr. wants and thus to keep him from forfeiting control.

Boyd's united-we-stand philosophy, his appointing of Babs as chairman at age 21, the trusts he has set up for the grandchildren, and his violence are all methods of manipulating everyone. His children act out three typical responses to their father's terrorism: Peter maintains his distance, always staying on peaceful terms with his father. Boyd III confronts Boyd Jr., struggling to get his father's approval and yet maintain his own point of view. Babs placates her father, adopting the nurturing role cast for her in the family.

Babs and the rest of the family must come to terms with their own behavior, which enables Boyd to maintain control of them and wreak havoc in their lives. Babs has played the role of nurturer and peacemaker that has made her valuable to her father and brothers but has undercut her own real authority in the business and in her life.

I would counsel Babs that her primary responsibility is to herself, and that if her father cannot be safely kept from her and the company, she should separate herself from the company and distance herself from Boyd's manipulative control. She has no obligation to sacrifice her own mental health for her family and she has no obligation to save a place in the business for Boyd III. What has happened to Boyd III is regrettable, but she is not accountable to him in the business, although she can support him as a sister.

Babs should exit the business. She has opportunities outside Makewell, and her leaving will more likely force a resolution of this problem. If her father ever changes or offers to distance himself from the business, she can return.

But she should return to lead Makewell Supplies herself — not to hold a place for her brother. When she meets with Boyd III, Babs should tell him that she is leaving the company unless their father resigns from the firm and she gets the backing of the board to lead it. She should ask for his support in getting the family into therapy, but make no deal with him for now.


ATTORNEY

RICHARD NARVA
Founder of Genus Resources Inc. in Boston, which specializes in consulting to family businesses.

THE FAMILY'S best opportunity to begin negotiation on a succession plan arose in the early eighties. At this juncture, the business appears to have been calm. The board — with some assistance from the family lawyer, who was also a director — could have established itself as a genuinely supervisory body and insisted on a succession plan. Perhaps Babs and her brothers could also have gotten support from the trustees who vote the stock.

Now the future of Makewell Building Supplies is problematic. There is no history or framework for orderly resolution of business disputes or family conflict.

Babs has no legal standing to argue that she should be running the business. Any attempt by her or Boyd III to win a struggle for power will likely lead to a sale or liquidation of the firm.

Babs's only prudent choice now is to leave the family business and get the best price that she can for her talents with another, non-competing company.


DAUGHTER

BERNADETTE CASTRO
President, Castro Convertibles, New Hyde Park, New York, founded by her father in 1931.

BABS SHOULD give her father time to cool off. Then she should go to him and talk daughter-to-father. She should tell him, "I don't think you have faith in me. My demotion is humiliating. I want you to have a long, healthy life, but I think I can run the company eventually. If you don't want that, I am still young enough to start another career. But I don't want to hurt you. If I leave, I'll want your blessing."

Babs might also appeal to her father on Boyd III's behalf. She should remind him that his oldest son is 36 and out of work. "He is not as visible in the community as I am and doesn't have as many other opportunities. He is loyal to the family company and wants to return." She should urge her father to talk to Boyd about a reconciliation.

From the facts of the case, however, it sounds suspiciously as if Babs and Boyd III are meeting to discuss a takeover of the company. I can't relate to that. I have an ethical problem with a brother and sister suing their father or even meeting behind his back. You don't get anywhere going to war.

My father, who's 86 and living in Florida, is still the CEO of Castro Convertibles. As president of the company, I don't do things conceptually that he would disagree with.

The relationship also works better because we have an outsider to turn to, our chairman Eugene Staudt. But it would be hard to bring in a Mr. Staudt from the outside to serve as CEO of Makewell Supplies. If Babs tried to hire such a person, her father might think they were ganging up on him. My father's confidence in Mr. Staudt is based on trust built up over years. Just bringing in a hired gun won't work for the Makewells.


PSYCHOLOGIST

MATILDE SALGANICOFF
Clinical psychologist and director of the Family Business Consultancy in Philadelphia.

BABS AND Boyd III have to educate themselves and their father in what is needed for the growth and survival of the business and the transition to the next generation. The father isn't even aware he is treating them all like children. I am not optimistic that he'll ever change. But Babs has to give him one last chance to start a dialogue. If nothing happens, she can at least leave the business with a clear conscience.

First, though, she must realize that she is not responsible for everything — for her father, for the business, and for being Boyd's advocate. This is frequently harder for a daughter to do than a son. Almost from the first day of life, daughters are brought up to be family caretakers. To complicate matters, oldest children like Babs often assume the role of parental protector — they're called "parental children."

Women in this family seem to have been given roles in this company not because of their own talents and career needs but to serve the father's plans. That is very typical of patriarchal family businesses. There is very little in this case about the mother. Between her feeling for her husband and the frustrations of her children, she is probably in a terrible bind.

If Babs wants to stay in the business, she should write her father a letter telling him that she cannot continue unless he agrees to start the process of negotiating a succession plan. The letter, which should be sent to other board members as well as the father, would spell out the prerequisites for her staying with the company and request a meeting to discuss them. Boyd Sr. has to give her some stock, a share of the ownership. He has to bring in a nonfamily member as CEO and add outsiders to the board. And together, the family has to work out a new role for the father, perhaps as chairman.

Babs should explain that asking her father to accept her conditions is not an act of disloyalty. Boyd Jr. has to accept his own mortality. She has put her talent, time, and effort into the business, and therefore has a right to some stake in its future. She has reached an appropriate age, when successors should begin assuming responsibility for the company. Boyd Jr. has to understand that if he doesn't develop a succession plan, the business will go downhill.

If her father discusses a plan with her but then does nothing to meet her conditions in six months or so, Babs should cut her losses and leave the business.

—J.D.

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September 1990

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