Dealing with human dynamics of business with insights from four

"You think we ought to call an ambulance? Somebody might have died up there?"

My friend Clay and I were playing behind a very slow foursome on a golf course in Pinehurst. We were on only the third tee, and it sure looked like a long afternoon ahead. But it gave us time to chat about Clay's plan to spin off a couple of divisions of his family's textiles company.

"That way," he explained, "I can put each kid in charge of his own business, and we won't have to go through that process of deciding who's gonna run the whole company when I retire."

"I thought you were a stern captain of industry," I laughed, "and now you're acting like some kind of weenie when it comes to making a succession decision. But seriously, are you sure you want to split up such a well-integrated organization?"

"Listen, pal, I've stayed awake plenty of nights sweating out decisions that could have sunk the company if they'd gone the wrong way. But that was a piece of cake compared with deciding who's gonna be handed the authority to run the business that's been in our family for four generations."

The foursome ahead of us finally made the green, so Clay teed up. His shot was 250 yards, down the middle.

"In my gut, I know who ought to be the next CEO," he mused as he headed for the cart. "I just can't figure out why the decision is so tough to make."

Clay is like a number of senior family business owners I know. He has a great head for business, and he knows his company and its industry inside out. But although he's a loving father and husband, he's never really come to terms with the emotional dynamics that are part of every family owned company.

"Tell me something," I said. "Was it hard for your father to decide that you should move up to lead the company when he stepped down, while your brother remained the VP and chief operating officer?"

"I never thought about it that way," he said. "My brother and I had worked in the business most of our adult lives. We'd always gotten along with each other, worked together well as a team, and we each had the interests of the company and the family at heart.

"One day Dad called us and a few other family members and senior employees into his office and announced that he would retire in five years and I'd take over after him. He talked about the characteristics that he thought would make me the best CEO and my brother the best VP. And it all made so much sense that everybody accepted it with no argument."

"Your father was an analytical thinker," I reminded him as we rode to our second shots, "and a savvy student of human nature. I'll bet he spent years measuring your performance and temperament, as well as your brother's, against the future needs of the business. So by the time he called everyone into his office, he'd made a decision that he knew would strengthen the family as well as the business in the next generation."

"And the fact that we accepted the decision was a good sign that Dad had understood us all pretty well."

"That's right," I said. "And that's the kind of decision you can, and probably should, make now. You have to deal with the human dynamics of the business, analyze the people factors as well as the financial, structural and marketplace factors that will affect the company over the next 20 to 30 years. If you try to plot your family business's future based on the quantitative stuff alone, you might as well break it up into pieces and hand it out like candy on Halloween."

"That's not really what I want," Clay said, "and it's not the best thing for the company. I've just been afraid to face choosing one of my sons over the other. But Dad did it, and it preserved the business for my generation. I don't owe the company, my kids and the rest of the family any less than that."

"Good thinking," I said. The foursome ahead of us was still standing around on the green. "You know, that ambulance might not be a bad idea after all."

Using the Internet

There are still a few people -- most of them my age and older -- who don't realize that the Internet has become an almost indispensable resource for family-owned businesses. Time to get on board, friends.

Looking for family business information by entering "family business" and clicking the search button will flood your computer with Web sites of every shape, size and degree of relevancy. Most of them will be advertising or promotional sites for consulting companies, trade groups, publishers or educational organizations. But if you're looking for hard information specific to running a family company, there are a few sites that will really meet such a need. Here are four of my favorites.

The Family Business Report is compiled and published by the national law firm Hale and Dorr and issues for 1999 and a few earlier years are on the Web (www. haledorr.com/publications/family/ FamilyDirectory.html).

The contents are bright, informed and generally well targeted guidance on succession planning and other family business management issues

Clicking on www.fambiz.com will take you to a commercial Web site owned by NetMarquee. Its value lies in its family business search engine, a feature that accesses what NetMarquee claims to be more than 300 articles by family business specialists in firms and centers around the country.

Like Hale and Dorr, the insurance giant MassMutual is really keen to attract family business clients. So they spend a lot to keep their Web site (www.massmutual.com/FBN) looking good and up-to-date. The FBN stands for Family Business Network, MassMutual's term for linkages with nonprofit family business centers and others.

Oregon State University's family business Web site provides links to other family business sites. From www.

familybusiness.orst.edu/links, you can search for family business articles, databases and other useful sources through three search engines and Inc. magazine's database.

James Lea, a professor at the University of North Carolina at Chapel Hill, is author of Keeping It In the Family: Successful Succession of the Family Business.

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