One test of a great team is how well it functions after its leader steps aside. A good succession plan can eliminate many problems, but drawing up and following such a plan are challenges in any business, particularly in a family business. Statistically, fewer than 10% of all family businesses make it to the third generation. Still, Camp Echo Lake, a family-owned summer camp in Warrensburg, N.Y., has a better chance of survival than most. "I know the odds are against us, but we're going to give it a shot," says Tony Stein, codirector of the camp that his grandparents founded.
Tony's father Morry was determined to prepare his successors for ownership of the business. "In the mid-1980s, we started having monthly or bimonthly family business meetings," says Tony. "None of us were in the business then, but Dad felt it was important to keep us abreast of what was going on." As the family discussed everything from capital projects and pricing to estate planning, the role of each of the three sons emerged naturally. The oldest, Eric, was the outside adviser. The youngest, George, was impassioned by sales, and Tony, the Wharton M.B.A. with four years of outside experience, gravitated toward the administrative and financial duties. Morry Stein prefaced many of those meetings with the grim scenario, "If I ever die in a plane crash, here are the steps you need to take."
Eerily, that's exactly what happened in October 1994. "When my dad died, I knew exactly what to do," says Tony. "He had been training us for 10 years -- those meetings were like fire drills." So far, the transition has been smooth, and George and Tony have purchased a majority of the camp from their mother -- a succession tactic that was discussed at Morry Stein's meetings.
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