Bill Simmons worked in his father's fashion house for several years after graduating from university. The father-son relationship was extremely conflicted and Bill struggled with years of verbal abuse. Bill finally left his father and founded his own business in a related field, creating Lincolnshire Fashions Limited in 1969.
Bill grew his company from a start-up to a very successful venture with several stores, catering to high-end consumers. The business consumed Bill's energy for years and his identity was "Mr. Lincolnshire". Bill achieved significant wealth through the business and its attendant real estate.
Bill and his wife, Danielle (both age 66), have three children: Joe (44), Jack (38) and Rebecca (34), who all work in the company.
When Joe first joined Bill in the business (right out of university), Bill gave Joe the classic line, "Someday this will all be yours". Joe moved up the ladder through a variety of positions and now runs the administrative operations of the company. Jack entered the business six years after Joe. He is a star salesman and has contributed significantly to the company's success. Rebecca joined the company four years after Jack and is in sales, and is also a fine designer.
While all three siblings have responsible and important positions in the company, they don't feel they have any control over their destiny. They want to take over the company and while Dad speaks of transition from time to time, he keeps putting off the planning process. He claims his children aren't ready to run the business and admits that he doesn't want to let go. Bill cites examples of his children accepting merchandise for return that goes against company policy, yet Bill breaks the policy himself. Bill argues, "It's my business". In another instance, when Jack refused to work on a holiday, citing the need for some personal family time, Bill fired him. When Bill realised that Jack might open his own competing business, Bill agreed to bring him back. Furthermore, when Bill didn't approve of Joe's marriage partner, he refused to speak to him for months. In Rebecca's case, when she used a year-end bonus to purchase a sports car, Dad refused to give her a bonus the following year.
Rebecca is viewed by her brothers and father as an excellent designer and salesperson, but as immature and irresponsible. She feels frustrated that in their eyes she can do nothing right. In fact, though Joe accepts that all three children will own the business together, Jack would prefer not to be a business partner with his sister. Bill is concerned that when he is gone, the brothers will not treat their sister fairly and the brothers themselves will have conflict. Ironically, Bill often sets the siblings up against each other. Joe and Jack are quite close and handle this tension effectively. They share, often with laughter, their father's negative comments made to one brother about the other.
A few years ago, during Bill's 18-month affair and separation from his wife, Bill was virtually absent from the business, yet under his children's reign, all went well.
When Joe, Jack and Rebecca ask Bill what they must do in order to have his confidence and trust and be willing to let go, Bill participates in setting a "career development plan". But he never follows through.
The three children are frustrated, angry and yet tied to their positions by the proverbial "golden handcuffs". Insisting on a buy-out seems to be their only way out. But how will Dad react to this? Will he fire his children? Will he use delay tactics? Will he insist on more money than either Lincolnshire or the children can afford? Will this destroy the family as well as the business?
How can the siblings give Dad an offer that he can't refuse?
It appears that history may be repeating itself at Lincolnshire Fashions Limited. Bill Simmons' father made things intolerable for Bill when they were in business together and Bill may now be doing the same with respect to his own children.
The difficulty of "letting go" is a common problem for senior generation members who have built up a family business through their efforts and may now be ambivalent about passing it on. Bill's reluctance, perhaps magnified by a controlling personality, may be seen in his dealings with his children, particularly in the muddied separation of family and business roles (evident in his denying his daughter a bonus because he disapproved of her purchase of a sports car the previous year).
Bill needs to transition responsibility if the business is to survive into the next generation. Preferably, the succession process should have started long ago with a Stockholder Buy-Sell Agreement covering Bill's shares as part of an overall succession plan. The older generation may be understandably unwilling to permit succession until its own financial security for retirement is assured. For the business, it still may not be too late to adopt company policies – including job descriptions and clear lines of authority – that could reduce day-to-day tensions. Broader issues of management and ownership transition will be more difficult and will need to be addressed. These issues include not only succession from Bill to his children but also the dynamic between Rebecca and her two brothers. Voting agreements or non-voting stock may be tools worth considering, at least until the situation stabilizes and Bill becomes comfortable with handing over control. An outside Board of Directors or Board of Advisors could be invaluable as a sounding board and a buffer between family members.
Transitions like this are generally best accomplished gradually but Bill may need a wake-up call to get him to cooperate. The three siblings will therefore need to unite forces and be ready to walk out on their father's business if necessary. When Jack left a few years ago, Bill relented and hired him back, so the precedent is there to hopefully avoid a lengthy impasse.
The business is likely to need an experienced family business advisor, however, preferably one trusted by all family members, who will take a "hands on" approach to the mix of interpersonal and business issues. If Bill can't learn to tailor his ways in dealing with his children, he may soon wind up as deserted as last year's fashion.
Jeffrey S Wolfson is Chairman Emeritus of the Northeastern University Center for Family Business and an attorney at Goulston & Storrs with offices in Boston, Washington DC and London.
In order to give Dad an offer he can't refuse, Joe, Jack and Rebecca need to work as a family team to identify strengths and areas for development. Furthermore, they should, with their father, either revisit or establish family values. Having values by which they can live will help them move forward through challenging times. Developing a strategic vision for the future, which they could invite their father to be part of, will help ensure that the vision lives through their family values.
To develop a strategic vision the family needs to revisit the past, back to when Bill was in his father's business. This can be done through a history of the business highlighting Bill's initial role in his father's business and how that helped or did not help him start his own business. This history would detail both business and personal data, including who joined when, what they did, who left the business, effects of people leaving, acquisitions, and successful and unsuccessful patterns. It is usually an enjoyable process full of surprises and highlights forgotten strengths and weaknesses.
Such a history could be conducted by a professional specialist with skills in family, behavioural and management sciences. The session would include Bill, Joe, Jack and Rebecca. Bill would be in a position to provide the memories, the history his children don't know, and this would give him the respect he deserves for building such a successful business. Joe, Jack and Rebecca could add their memories as and when they were able and could also contribute what happened when they were running the business together while Dad was away for 18 months.
As the history reaches the end, conclusions can be drawn before a vision for the future is identified. At this time, the siblings should ask themselves: What did Dad do that we want to continue? What did we do that we'd like to move forward? What ideas do we have together to move forward? What ideas does Dad have for a role for himself in his transition? What are Dad's dreams for the future? What are our dreams? Do we have the resources we need? How does such a future fit with our values?
Using a behavioural family specialist would allow the family to share and recognise both positive and negative behaviour patterns. This process would best be suggested after compiling the history and before developing a vision for the future.
Thus, the order of play would be:
- Invite Dad to participate in 'exploring the future'
- Compile a history and draw conclusions
- Identify family values
- Share feelings and dreams
- Have Dad develop a future life plan
- Develop a vision for the future, based on family values
- Identify roles each family member would play
Giving Dad an offer he can't refuse means honouring his past, including him in a future and resolving past hurts.
Susan Kaye is a therapist/family business consultant and Managing Director of The Challenge of Excellence in Moss End, UK.