Over The Hill

Just-Right Involvement

If too little or too much involvement of owners can sink a middle-aged family business, what constitutes "just-right" involvement? And how do you achieve it?

First, foster a positive feeling about the business when your kids are young. While Tom Zadek's five children are still young, he is making a conscious effort to share the positive aspects of, and keep them involved in, the family's 80-year-old Fitchburg, Massachusetts, business, Nursery Needs Inc. Their involvement so far has been all fun: They model for catalogs and promotion materials for the company, which designs and manufactures infant and preschool grooming and teaching aids. Even if they don't wind up working for the company, Zadek wants his children to understand how important it is to the family.

As family members get older, they need to learn what it means to be an owner. That includes discussing the family's business philosophy. Does the business come first? Does the family comes first? Or is the family committed to a balance, taking actions and making decisions that are good for both?

Mitchel & Scott Machine Co. Inc. in Indianapolis is working on getting just-right involvement of its family business owners. The 64-year-old precision machine-parts manufacturer recently formed a family council. "We're doing what needs to be done to leave a solid business to future generations," says Tom Mitchel, the company's president. Tom, his brothers Dave and Steve, and all three of their families are trying to determine how to be effective owners even if some members are three states away, what they should look for in the next leader (who may or may not be a family member), and how to improve communication.

Family councils provide a wonderful vehicle and a safe setting for discussing a range of issues: how future generations should enter the business, how to integrate the family's mission with a changing business environment, how nonactive members can participate in a meaningful way, how family members can redeem their stock if they're no longer interested in being shareholders, how to maximize the family's role in philanthropy or the community, and so on.

Will there be dissension amidst the discussion? You bet. The expanded number of owners makes that almost a given. Still, the friction is not always bad. "It helps resolve some of the distance," says Messervey. Because the owners are often forced to examine how their unresolved family conflicts are being played out in a business setting, it's hard for one member of the family to lead the discussion (unless he or she is a skilled facilitator with few allegiances). That's one of the reasons Mitchel & Scott has an outside family business consultant come in to facilitate their family council meetings.

The little victories associated with working together as owners are important, says Messervey, because they build a family's confidence. To move through midlife crisis into the mature years, owners need to feel that no matter what challenges they face as a business in the future, they can work them out.

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This article was originally published in the October 1997 print edition of Entrepreneur with the headline: Over The Hill.

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