A legacy of turmoil - case study on succession at a family corporation with analysis by two consultants

Madeline, 64, assumed management responsibility for her husband's $6 million wholesale distribution company following his unexpected death two years ago.

Her husband had "managed" the marginally profitable business for 20 years with no formal planning or long-term strategy. At the time of his death, Madeline worked as the bookkeeper, and her three sons-now ages 28, 31, and 35-each had sales territories.

Steve, the oldest son and top salesperson, quit last summer because his mother failed to act on business suggestions he had been making to his parents for the previous five years. "I see no possibility that things are going to improve," he told her. Steve, who has a degree in marketing, has taken an executive position at another firm at double his old salary.

The younger two sons are good at sales but, like their father, dislike the management details. They constantly argue because they sell competing product lines, and each sees his own line as key to the company's future. They have not spoken to each other since the younger son beat his brother out of a substantial sale two weeks ago.

Madeline was only casually interested in the business when her husband was alive, but she has devoted herself to it since his death because he told her "to make sure it's passed on to the boys." She was discouraged when Steve quit, and this latest blowup really has her concerned. "Will my sons ever learn to work together?" she asks.

At the suggestion of her accountant, Madeline hired a family-business consultant six months ago. But she didn't really feel the family needed outside help, and the relationship ended after two sessions.

Now sales are running below last year's, and Madeline is afraid the business may fail. What can she do?

COPYRIGHT 1994 U.S. Chamber of Commerce
COPYRIGHT 2004 Gale Group