Mark Schnepf represents the third generation to run Schnepf Farms, a family farm started in 1941 by his grandparents in Queen Creek, Arizona. But his original plan was to become a corporate attorney. "Growing up, I never wanted to be a farmer," says Schnepf, 46. "The work was too hard, the hours too awful."
When the farm ran into financial trouble in the early 1980s, Schnepf's dad, Ray, asked him to take a break before law school to manage the financial end of what was then a 5,000-acre working farm with 100 employees. "I started working with my dad and never left," Mark says.
The younger Schnepf, however, realized the farm needed to revitalize itself or it would go out of business. Mark and his wife, Carrie, 44, started incorporating public events, including an annual Peach Festival. Ray, who passed away in 1995, was excited about the direction the farm was heading.
But his mom, Thora, wasn't happy as the farm downsized both staff and acreage to branch into "agritainment," promoting itself as Arizona's "premier family entertainment farm" with petting zoos, a train ride and festivals that now draw thousands of people. Farm employees balked at interacting with the public, and old customers of the farm's roadside fruit and vegetable stand didn't like the changes, either.
The Schnepfs encouraged Thora to come to events on the farm, where she "warmed up to the idea," Mark says. "She became a local celebrity." They met with employees and explained how the changes were about survival and being able to pay people more, which improved morale. Today, the farm has 10 full-time employees, 110 seasonal employees, and annual sales of about $2 million. The Schnepfs believe they're staying true to the farm's legacy by keeping it alive--in fact, Mark thinks his biggest mistake was not changing faster because he didn't want to ruffle any feathers. "Don't be afraid to make changes," he says. "[Waiting too long] cost us a lot of money and time."
You must have a hands-on grasp of the core business processes first, says James Olan Hutcheson, president of ReGeneration Partners, a family-business consulting firm in Dallas. Even better, family members should seek outside work experience to get a well-rounded perspective and ask to be interviewed like any other applicant before they enter the family business. This lays the groundwork for what's expected and also what the younger generation expects. "Establish a code of conduct that says how you'll discuss important matters," Hutcheson says.
Nancy Bass, 43, is third-generation co-owner of the Strand Book Store, founded by her grandfather, Benjamin Bass, in 1927 in New York City. Today, it's an oasis for book lovers who trek to its flagship store on 12th and Broadway or to one of its four other locations around the city. While her dad, co-owner Fred Bass, 75, oversees the book buying and prefers bartering with the public at the used-book counter, Nancy--armed with an MBA and management experience from Exxon--is busy nearly doubling the size of the flagship store. She also oversees 210 employees and manages operations.
Updating a local legend can be daunting. "When I meet people at parties, they say, 'That's my favorite place in New York,'" Nancy says. So how has she pushed big changes such as web-based book selling? "Dad has to get used to things, so I say, 'If this doesn't work, this is the worst-case scenario.' We'll try it in small steps, and he'll get used to the change," she says.
You have to pick your battles and stay flexible, too. "I've given in to a lot of things where I might have the better way, but it's not the important battle," Nancy says. "You can have different paths to get to the same ends." There certainly seems to be no end in sight to the company's success: 2004 sales booked in at about $22 million.
Words to the Wise
So how do you push change as a second-or third-generation family business member? We asked the experts.
- "Find small changes that are very doable, where you can see quantifiable results. Tie things to measurable outcomes." -Paula Harveston, management professor at Berry College Campbell School of Business in Mount Berry, Georgia
- "Building a proven track record is very important. You can rattle A lot of sabers otherwise." -Larry Bennett, director of the Larry Friedman International Center for Entrepreneurship at Johnson & Wales University College of Business in Providence, Rhode Island
- "Find those people in the family who are mentors and know how to make things go forward." -Ralph Daniel, Center for Family Business Dynamics in Santa Barbara, California
- "[My parents] laid the foundation. I don't think it's good to discount that and depose them. Part of the legacy is keeping that association without cutting it off and saying, 'We're the new guard.'" -Ellen Picataggio, managing partner of The Farmer's Daughter in Hollywood, California