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What about George?

Founded in 1947 with the $15,000 George had received from his first patent, the business had, by 2001, changed an entire farming industry. Located in a small rural American mid-western town, the company was a local showcase and object of pride.

Marjorie and George had never imagined owning a $100 million company. Seemingly overnight, the business had grown, steadily and profitably. Marjorie and George did not believe in leveraging growth with debt, so the business grew with a conservative and low-keyed strategy. One patent after another, one new product after another, their company changed the way farming was performed and pioneered methods now used throughout the world.
 
George was a scientist and his exclusive and sole interest was inventing new and better solutions for farmers. He had little interest in the wealth that grew with the company as Marjorie was the one who knew how to build a business.

They had three children who all eventually took positions in the business. James, the eldest son, was Vice-president of human resources; Bart worked in the manufacturing plant; and David was a quality manager. The vice-presidents, other than James, were brought in from outside and had been carefully selected by Marjorie. The business identified the family and visa versa. Marjorie was President, George the CEO. She was tough yet fair-minded, and he was a man of few words.
 
Though they had never conducted any formal strategic planning, the company was now the recognised expert in its field. Their division heads were of the highest calibre and, though the company was his namesake, there was less and less involvement for its founder.

By now, the research and development division pretty much ran itself. George's tutelage was bearing fruit and the young scientists had grown to be an innovative and capable research team. Initially, George was proud of them, but now he wasn't sure.

In 2001, having turned 75, things with George began to change. Where once he could be found in his office reviewing industry periodicals, his whereabouts were now less predictable. He managed by "walking around", questioning his employees.

He interrupted meetings, told jokes, threatened to change protocols, questioned management decisions and demanded irrelevant last minute changes months before the launch of their new flagship product. He was, unfortunately, no longer in touch with the way the business worked.

Managers were growing more and more agitated. Though employees tried to be polite, the pressure was building. George had created such a flurry of confusion that many employees threatened to quit. The future of the company was at stake. Could George's 75th birthday mark the beginning of the end for the company? Could he take down the very foundation he had built 50 years before?

Though they were hesitant, the team of managers decided to consult with James. As head of human resources and George's eldest son, surely he could find a solution. Talking to Marjorie would be too great a risk. They needed to find a solution before it was too late.

Commentary 1
This is a fairly typical first generation family enterprise. George has devoted his creativity to inventing products which have become successful under Marjorie's management. As the firm grows he finds himself isolated and without a clear vision of his work and life. He feels old, insecure, lacks fulfilling activities and does not want to lose control. Being introverted, George never expressed his feelings and now he is venting them in a particularly destructive way. His three sons seem content with their jobs but, with the possible exception of James, the others seem to lack the capacity, knowledge or motivation to become successors. Marjorie still exerts control over the business but there is no succession plan as she ages and nears retirement.

A family reunion could evaluate the expectations of each of its members. A professional facilitator could be brought in to help with issues such as retirement, continuity of the company and the role of family members as shareholders or executives. The family need to define their goals and present a unified front.

Due to the size of the company, there should be an effective board of directors to set policies and make plans for the company's growth. All members of the family need to reach consensus about the ownership and future of the company.

George could concentrate on a 'life project' which he could work on outside the firm's premises. This would help him use his inventiveness and creativity, and improve his self esteem.
 

Salo Grabinsky is an international family business consultant, working with family groups throughout Latin America and the Hispanic communities in the USA. gsalo@mx.inter.net

Commentary 2
The business should hire an outside consulting firm to conduct an assessment of the business and family issues. The firm should interview both family members and vice-presidents of the business. Subsequent to the interviews, a family meeting should be held to review the issues that arose during the interviews and discuss the family needs and roles. The result of the first meeting combined with the earlier interviewing will suggest the agenda for subsequent family meetings, to be held on an ongoing basis.

The consultant would then facilitate a meeting with the vice-presidents and focus on the roles and responsibilities of the managers in the business. The role of research and development (R&D) and George's interaction with R&D should specifically be discussed and documented.

The effect of the consulting intervention should stimulate communication and planning conversation in both the family and business venues. Critical to this communication process is an honest and direct communication with George, involving those closest to him, about what he wants to do and what he can do. Hopefully, George will be willing to have these conversations but, if not, the meetings and conversations should occur with as much of George's involvement as possible.

The group planning process, involving assessment, setting of goals, and the determining of action plans should be initiated and maintained by both the family and the business.

Rick Riebesell is an attorney working with families and owners of businesses. His firms, The Riebesell Law Firm and Perigee Group, are located in Denver, Colorado. hfr@rlfpc.com

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