Building a business together

It seems more and more people are trying to figure out how to live their lives in nontraditional ways. Why don't we find a couple who has thought through the issues and decided to run a company together? Let's take a look at how they balance work and family. Do they really have more control over their lives? What are the drawbacks? -- J.A.F.

* * *

Family and business milestones have a way of coinciding for the Friberg-Peterson clan. For example, take the August 1975 telephone conversation between Karl Friberg, then an up-and-comer in Citibank's international-banking division, and his wife, Lyn Peterson, an interior designer. "Guess what. We've got a store," Friberg told Peterson, after what had been months of searching for the right location to open a retail wallpaper shop near their suburban home outside New York City. "Guess what. We're pregnant," she responded.

Fourteen years -- and four children -- later, Friberg, 44, and Peterson, 42, preside over what has become a major player in the home-furnishings business, Motif Designs, based in New Rochelle, N.Y. From its beginnings in the tiny shop, the company has grown to a $10-million designer and manufacturer of upscale wallpaper and home fabrics.

Peterson and Friberg are part of a growing breed of company owners -- couples who are launching businesses together because they share not only career and financial ambitions, but also a series of lifestyle goals that are difficult, if not impossible, to achieve in the corporate arena. Give them success, yes, but not at the price of time with their kids and flexibility in their work schedules. For cou-ples like Friberg and Peterson, the traditional boundaries between work and home are no longer existent.

By spring 1979 a full three and a half years had passed since the couple used $9,000 in savings from Lyn, her sister, and her cousin to lease and stock their wallpaper store. Friberg, nothing if not financially cautious, had held on to his Citibank job all the while, waiting for a sign that the wallpaper business could generate enough cash flow to support his family of three. He and Lyn had endlessly debated whether their timing, finances, and business concept were finally good enough to take the big gamble, which in their case meant his resignation.

A change was long overdue. Peterson remembers urging her husband to make the break: "I never worried about problems like would we fight every day, or how would we pay the bills? It just seemed as though it would be an idyllic way to live, so romantic to finally be in this business altogether, 100%." That vision was easier for Peterson to imagine than for Friberg to act on -- it was she, after all, who had been immersed in the business for years now, first at the store and then, increasingly, at home drafting patterns for Motif's first designer collection. She also came from a family proud of its entrepreneurial roots: her grandfather started his own sprinkler-installation business 50 years earlier; two of his children had followed him in the business, and another had started a home-furnishings company.

But if Friberg was more conservative by nature than Peterson, he had his own fantasies that involved risks. Since their days in Cambridge, Mass., where Peterson worked as a waitress to put him through Harvard Business School, he had dreamed about chucking the corporate world and gambling his talents on his own venture. "I always used to sit in the back row of any class I took," he recalls of his ambivalence about being there at all, an emotion that lingered during his four years at Citibank.

In the end, straddling the fence between the corporate world and those dreams proved too stressful. Friberg found it frustrating to be no more than a cog in Citibank's correspondent-banking machinery, one of 10 or more people servicing the same foreign accounts. Risk taking was positively frowned on. "I knew I was ready to start taking chances and to help Lyn take them with our business," he recalls.

By 1979 Friberg and Peterson had made some money and had learned the ins and outs of the wallpaper market. And they'd come up with what they hoped would be a successful niche: the design and manufacture of their own brand of wall coverings. "I was working in the store selling the stuff all day," Peterson recalls, "so I was able to realize pretty fast just how limited most of the products on the market were. I kept telling Karl that I knew I could design something better." So for a year Peterson and two other artists had been doing just that in what was once the Friberg-Peterson dining room. That spring, to give it their best shot, the couple decided they needed Friberg's full-time attention -- not just those spare moments he could squeeze in between his Citibank paperwork and transatlantic business trips.

So at long last Friberg left banking to go full-time into the wall-covering business. After such a wait the beginning itself was something less than momentous. Friberg and his father spent the first day knocking around a huge concrete garage-turned-warehouse a few blocks from the couple's 65-year-old clapboard house. The two men patched together desks out of plywood, wallpaper, and some old sawhorses for Friberg and two part-time order clerks. Working from a pile of lumber bought at bargain-basement prices from a local discounter, they also constructed racks for storing rolls of wallpaper.

There wasn't much living space left in the family house, which is one reason Friberg felt positively liberated as he hammered away at those wallpaper racks and sawhorse desks in the drafty warehouse. For the past six months or so he'd been cold calling wall-paper distributors from his kitchen, the living room, the bedroom, wherever he could find a free phone and a quiet moment away from his Citibank job and his demanding toddler. He'd had to fight his way to the bathroom, stepping around college students and other part-time Motif employees. There was now a publicity consultant to be reckoned with, bivouacked in the attic. Meanwhile, the fledgling company was generating so much office garbage that neighbors had begun to complain about it, piled up along the manicured suburban sidewalk awaiting pickup.

Fortunately for Friberg, there was no time to sit back and long for all those support systems he'd been trained to count on at Citibank and Harvard Business School. Motif's sales skyrocketed: wallpaper distributors were so desperate for high-quality designer products that Friberg's first 1,000 sample books, intended to blanket the whole U.S. market, were snapped up by the first retail distributor who saw them. If anything, that initial success reinforced the self-confidence, even arrogance, that had been fostered at business school. "You come out of all those case studies thinking you know everything about business," Friberg says. "It takes a long time to realize that you don't."

Motif's original spark came from a licensing agreement the couple won from Marimekko, the Finnish design company then taking the United States by storm with its table linens, sheets, and other home furnishings. In just one year Motif's sales went from $194,000 from the retail store to $1.6 million from manufacturing and retail sales together. It was all so intoxicating that Friberg, always the more cautious of the two, soon surpassed Peterson in his enthusiasm for growth and more growth. "I'd tell him, 'Well, now that we've made it this far, everything's great, and we can stop worrying about things and relax,' " she recalls, "And he'd tell me, 'No, it's time to start adding this, this, and this.' Sometimes it felt as though I was on a high diving board and Karl was behind me, giving me a push whenever I felt too tired or scared." Friberg himself felt inspired. "I could see us doing $100 million in sales by the end of the 1980s," he remembers.

The synergy between the pair was hard to ignore. "I remember meeting them back then over lunch at a sales convention," recalls Jerry Rosen, the owner of Wall-Pride Inc., a wallpaper distributor based in Van Nuys, Calif. "Lyn was on fire with this incredibly infectious enthusiasm about her patterns and her artistic vision. And Karl, although he was quieter, conveyed that he was in control of the financial end, that this was a real business. They were irresistible -- and what they had to sell was a collection that was unlike anything else that was available back then."

Peterson ran the design studio and planned and supervised what grew to be four annual collections; she also handled some interior-decorating jobs that increased Motif's visibility -- decorating rooms, for example, for prestigious design shows. Friberg managed the business end, which included negotiating with subcontracting mills, budgeting, struggling with thorny warehouse and customer-service operations, selling, and managing the company's growing staff. And he found running the business as exhilarating as Peterson found her design work. "At Citibank there were always so many different levels of authority you had to clear your activities through. It felt great to be able to pick up the phone and call anyone I decided it was important to call and say whatever I felt it was important to say." The division of labor was fairly simple to maintain, especially during Motif's earliest years, since Peterson -- who planned her pregnancies four years apart -- preferred to do most of her design work at home, where she could keep an eye on the kids.

"Working with Lyn was fun; it was a kick: the perfect change from a place like Citibank," recalls Friberg. Says Peterson, "Back when Karl worked at Citibank and I was at the store, we'd tell each other about what had happened during the day, even though it was tough sometimes to pretend to be interested. Now, we were involved in the same thing and working toward the same goal, which was incredibly exciting."

For Karl Friberg and Lyn Peterson, the end to the romance -- at least, the fairy-tale romance of entrepreneurial part-nership -- came four years ago, when Motif Designs crashed up against a series of business-threatening disasters. The crisis began after they had convinced Ralph Lauren to license his wallpaper and home fabrics to them. They had spent years wooing him.

By the time Lauren agreed, Motif's sales were around $5 million, and it had about 40 employees. Friberg and Peterson had long since sold off the retail shop to concentrate their attention on manufacturing, adding some of Peterson's own brand-name designs as well as a fast-selling line of home fabrics. Things had been going so well for so long that they figured the Lauren expansion would play out like Marimekko Part II, pushing Motif's already-fast growth into hyperdrive.

"We had to gear up to add this behemoth to our existing lines," begins Peterson. By the mid-'80s, the cost of introducing a typical new collection had risen to $500,000, 10 times the cost of Motif's earliest Marimekko collection. This meant the company needed cash and plenty of it to finance upgraded and expanded manufacturing ventures.

Despite the difficulties, neither had any qualms about the expansion: Friberg was still gung ho for growth, while Peterson saw the line as a designer's dream come true. Fortunately, Friberg found a new banker willing to triple the company's credit lines, using the 15-room house they'd bought a year earlier and Motif's assets as collateral.

Friberg figured the company would need enough warehouse space to store twice the current inventory -- about 200,000 rolls of paper and 125,000 yards of fabric, he projected, which would mean they'd be shipping more than $1 million worth of merchandise each month. His confidence was understandable: aside from a few short-lived missteps, Motif's ever-accelerating machine had never faltered. So he hunted down and leased a 30,000-square-foot facility -- more than tripling Motif's work space and providing Peterson with her first office outide of the house.

Then Motif's growth machine did falter. During the course of the move, its customer-service operation fell apart; no one knew what actually was in stock or where it was located. Some orders were filled incorrectly; many others missed delivery dates. Meanwhile, absenteeism and high turnover in the warehouse and order department had become a major problem. "You can imagine what a nightmare it was for our customers," Friberg says. "They'd hire their wallpaper hangers, but our product wouldn't arrive, or it would arrive wrong."

What with the move, the expansion, and the difficulties of dealing with hundreds of mills and distributors, Friberg was torn in too many directions to find the time to reorganize and remotivate flagging departments. But since he was the one who had always made all the organizational decisions and had managed the staff, by now he didn't trust anyone else to do it.

So he compensated by wildly overordering everything in his sample books. That caused a new, even more dangerous set of problems, eating up the cash and credit needed to finance the relocation and the Lauren expansion. It was management under panic, the devil take long-term planning, and Friberg knew it. All he hoped was that fast growth would give him enough breathing room to correct the problems down the road.

But problems were mounting fast. Motif's new banker started getting nervous when the company reported its first-ever quarterly loss during the very first quarter of their relationship. Plus, the company's longtime financial officer was proving himself less and less capable, either emotionally or professionally, of keeping up with the business, and neither Friberg nor Peterson could bring themselves to let him go. "We were like a family," Peterson says. "The thought of firing him was devastating to contemplate."

Even more painful for Peterson was watching her husband floundering with problems she feared he didn't know how to solve. "There was some loss of confidence," she admits now. "I had never been involved with the company's management before, but I started trying to micromanage over Karl's shoulder, to second-guess all his decisions. He has always been a cosmic worrier, who stays calm about day-to-day issues and focuses on the bigger things. But I'm the kind of person who can worry about a loose thread forever," she says. Suddenly it seemed as though Motif had nothing but loose threads to worry about.

Meanwhile, Friberg was going through his own form of hell, and it was tough to judge which pressures were worse: the business crisis, which was now leaking into a second quarter, or his wife's growing worries about his competence in what had always been his area of expertise. "I knew what she was thinking," he admits a bit tersely, "and I felt that we just had to get our way through these problems."

Through an enormous act of will, they kept their business problems at the office -- even when, as the months progressed, it seemed the company might disintegrate around them. "We have always said that the most important thing to us was our family and that we would never, ever let anything happen that would put that in jeopardy," Peterson says. "Even if we lost the business and the house, all that mattered to us was that the family survive it." Adds Friberg, "We always told ourselves, even then, when we stood to lose so much, that if we lost the company, we could always go out and get other jobs. We could even move in with our relatives. But we knew we couldn't replace the family."

Help came finally from an unexpected source: Peterson's father, Pete, one of the few nonentrepreneurs in her family. He had recently retired from a career in marketing at IBM and signed on with Motif as a part-time consultant. "Karl had built the company from the beginning, and it was hard for him to see that he couldn't continue to manage it from his desk drawer," the elder Peterson says. "Except for Lyn's design work, this company was still a one-man operation, with no one making any decisions or carrying any responsibilities except Karl. He needed to analyze the business functions in the company and learn how to delegate."

That's a tough lesson to learn, especially when it comes from a father-in-law. And it's tougher still when the father-in-law's style is on the authoritarian side. "I didn't like the big-business bullshit," says Friberg, "so we had to find a middle ground between the IBM vision and the entrepreneurial vision."

What helped him adjust was that, emotions aside, he could see many of Peterson's recommendations made business sense, such as replacing the financial officer. Friberg did finally manage to do it, in what he still thinks of as one of his most painful acts as a CEO. Then there was the issue of a companywide reorganization. "Lyn's father kept hammering away at the idea that we had to put the systems and middle management in place in order to be prepared to grow," Friberg says. "Although that was the biggest area of conflict, I came to realize that every entrepreneurial company has to make that same set of adjustments if it's going to grow beyond a certain point."

For Lyn Peterson, the adjustment was a good bit easier, so much so that she installed a desk for her father in her own office. "We had always had an affectionate, although not intimate, relationship when I was growing up. So I was able to approach this without a lot of excess baggage from the past -- and to say, I hope I'm mature enough to learn from his years of experience." She pauses. "If he criticizes Karl, that can be difficult for me. But I can handle it when he gets a little testy with me." Peterson is still a more wholehearted convert to her father's big-business approach than her husband is. "I'm constantly telling her that just because something worked at IBM, there's no reason to think it's going to be the right solution for us," Friberg says.

Even before it was clear that Motif Designs had weathered the storm, it was clear that Friberg and Peterson were going to survive theirs. "Because it's so difficult for a husband and wife to work together, we've always tried to treat each other much more courteously and kindly -- both at home and in the office -- than couples and business partners usually do," Peterson says. "I think that helped see us through our problem period and to keep the crisis away from the kids." As for her own micromanagement of the office, it died quickly. "I realized that I didn't like it, and I wasn't nearly as good at it as Karl is."

That's not to say the two don't have their disagreements. "In any equal relationship, there are always power struggles," Peterson says. "Our conflicts are never divorce level -- in fact, our children would be shocked to hear even raised voices -- but we do debate things like 'I spent an hour with him,' 'I did more parenting,' or 'You've got more people reporting to you.' "

"Sometimes I'll complain about doing too much child care over the weekend," Friberg says, "but then I'll remind myself that I don't want to be working an 80-hour week, that the reason I wanted to go into business for myself was to have the flexibility to spend all this time with my family and the people who matter to me."

After agreeing to give the middle-management system a try, Friberg called one of his closest friends from graduate-school days, Bob White, an experienced entrepreneur himself, who was also Peterson's cousin. White was working in Virginia and Tennessee building nursing homes when he got Friberg's call begging him to tackle the troubled warehouse and customer-service operations. "I agreed to come back as a consultant for three months," he recalls, "to see if Karl really wanted me or anyone in the job and to try to size up the problems.

"Sometimes I'll still see Karl afraid of giving me or someone else the room to make a decision and, possibly, a mistake. But on the whole, he's made a real commitment to this new system," says White, who not only stayed on at Motif, but also moved into the couple's house.

Perhaps most important to Friberg and Peterson, they managed to reposition their company for further growth while holding fast to their lifestyle priorities. Together, they work no more than a 70-hour week -- with Friberg usually working 40 hours -- leaving their evenings and weekends free to spend time with their children.

On a typical workday evening Peterson drives home at about five, Friberg an hour later. White cooks a chicken-parmigiana dinner, while Friberg and Peterson take turns talking to the kids about what's happened during their day. Dinner-table conversation focuses on school and the children's social activities -- never business. "When you've got four kids, it's always play with me, talk to me, listen to me, do something with me," Peterson says. "We don't have time to think about anything else -- and we don't want to."

After dinner Peterson heads for the den to dancercize to rock 'n' roll tapes with 13-year-old Anne-Marie and 9-year-old Kris. Friberg reads to Erik, 5, then works with him on a homemade set of flash cards of rhyming words. Kris returns to the dining-room table, notebook in hand, to add some details to a story she is writing. Then it's Peterson's turn to help with the homework, while Friberg and White head downstairs to play basketball and work out on exercise machines. By the time the kids get settled in bed, at around nine, husband and wife spend an hour or so reading or watching television before turning in themselves.

Years ago Peterson tried to use these moments of quiet to discuss problems at the office. "But Karl hated that, because he'd be there at home, and there'd be nothing he could do about those things except worry and lose sleep. So now," she says, "if a problem crops up with a staff person or customer on a Friday afternoon and Karl is away from the office, I don't tell him about it until Monday morning when we're back at work."

Friberg and Peterson also discourage their staff from being obsessive about work. "I remember reading about Charlie Bluhdorn [the late chairman of the board at Gulf & Western Industries Inc.] dropping dead of a heart attack on his corporate jet and just being horrified by that," says Peterson. "We want our people to work out and jog and have time for their families -- not to be here 12 hours a day." And she means it. By 5:15 on a weekday afternoon most desks -- from the room she shares with her father and her children's art projects to the eight computer terminals where customer-service reps work, to the sales office, the design studio, the controller's office -- are empty.

The crisis of '84 brought Friberg back down to earth, rekindling his innate conservatism and leaving him ever so slightly at odds with his wife. Today, sitting in his large, starkly modern corner office, he makes it clear that he is interested in branching out into the overseas market, but he plans to do it slowly. Right now his highest priorities would make all those Harvard Business School professors proud: "Pay off debt. Tighten cash flow. Reduce my family's personal exposure to the business." In contrast, it is Peterson who now wants to diversify into a wrapping-paper division, to license her designs for other home-furnishings products, and to open by the year 2000 a chain of home-furnishings emporiums selling secondhand furniture, licensed products, and her own wall-covering and fabric designs.

Friberg listens patiently to her dreams, smiling all the while, but when he speaks, it's clear the future growth of Motif Designs will be a good bit more controlled than it has been in the past. "Now that I've been through a real business crisis, I've become more cautious," he says. "I want things to progress in a more stable, controlled way." One thing these two definitely still agree on is their lack of interest in selling the business -- which they see as central to their own lifestyle as well as to those of quite a few members of their family -- in all, five of Peterson's relatives now work for the business. "I'm looking forward to having this company when we're in our fifties and things are finally stabilized enough so we can relax," Peterson says.

It's an indication of just how all-encompassing business and family are for the Friberg-Petersons that her vision of an idyllic fifties involves "having friends and a social life and going out on Saturday nights and giving dinner parties. Our kids will be older, and we'll really be in a position to have some fun." She's not kidding. For Peterson and her husband, there's no time right now for Saturday evenings out or socializing with friends. They don't have the time for restaurants or movies. Recreation means a couple of nighttime basketball games for Friberg or a jog pushing the baby stroller for Peterson. Nor is there any room for privacy, as Peterson is the first to acknowledge. "We've had a full house for a lot of years now. Between working at the office together and taking care of our four kids at home, there's nothing resembling privacy at this stage in our lives for either of us. That's something else we're looking forward to."

In the winter of 1990 things seemed anything but stable, controlled, or fun for Friberg, Peterson, and their four kids. Their house had been invaded by four wallpaper hangers, four painters, one electrician, a rug installer, an upholsterer, a slipcover installer, and countless movers. Paper was being torn off every wall in the house; 15 rooms' worth of rugs and slipcovers were gone. The kitchen was weathering its 16th renovation -- not bad, considering the family has lived here for less than eight years. Meanwhile, Anne-Marie couldn't find her computer or the book report she'd been writing on it. Only later did she discover that it wasn't the movers but her mother who was responsible; Peterson had borrowed it for a photo shoot in Manhattan.

Despite Friberg and Peterson's pact to keep business problems away from the kids, there is one very painful way this company intrudes on home life. It stems from a decision they made years ago to turn their house into a showpiece for their wallpaper and fabric lines. Their quick-changing kitchen alone has appeared in 16 magazines, among them Self, Better Homes and Gardens, and as the cover story in House Beautiful.

The publicity is unbeatable, which is enough to convince the always-optimistic Peterson that any trade-offs are worth making. "It's a little inconvenient sometimes, but I just remind myself that this is what pays the bills," she says. "This is my advertising."

The adjustment has been more problematic for Friberg. He's a well-ordered man who clearly values neatness and privacy, the kind of father who welcomes his kids at the office but picks up after them as soon as they leave. So when he jokes, "I could walk into my own house and not even know if it had been burglarized," there's a hint of tension in the humor. Still, he's disciplined himself to go along with the game plan. After all, the renovations do make business sense.

Mini- and major overhauls may be toughest of all on the kids. Their beds, toys, and furniture are borrowed regularly, and their rooms revamped according to the needs of frequently scheduled photo shoots. Just a few months ago baby P. F.'s room was wallpapered three different times within a single day and then scheduled for its next redo four weeks later. Erik came home from preschool only to find that his bed had disappeared.

Teenager Anne-Marie resists most strongly, especially when a decor she particularly likes is replaced by another in a color or pattern she hates. To make matters worse for the kids, their parents also decided that it would make good business sense to rent out the family house to production companies to film television commercials. "Besides helping us raise money for the kids' education, I think it's a good marketing tool," Peterson says. "Just think about all those subliminal urges people are getting for beautiful wallpaper when they see our house in coffee commercials." But she acknowledges the intrusions from television camera crews can be nothing short of nightmarish. "It doesn't matter what you tell them not to touch. They'll touch it. And if they can, they'll break it."

Several years ago Peterson's parents sold their nearby suburban home, demolished Peterson and Friberg's garage, and built a 2,500-square-foot house in its place. Peterson's mother has become a manager herself, handling all the house-related details that might otherwise get lost in the shuffle during the week, including supervising any television filming or renovating. "They've always done a better job of delegating at home than at the office," Pete Peterson comments dryly.

Peterson and Friberg are ever on the lookout for imaginative ways to involve their kids in the business. Back when Peterson was working on her latest kids-room collection of wallpaper and fabrics, she tied her two daughters into the company's market-research effort by sending them out to schools, where they interviewed children their own age about the things they liked and didn't like in their own rooms. What did they want in their bedrooms? What were their favorite colors? "We're not trying to prepare our children to work in the family dynasty or even to teach them to be businesspeople," Friberg says. Instead, their aim is to reinforce the same lifestyle lessons they teach at home: responsibility, time management, how to set and accomplish goals. Peterson sees it this way: "For us, everything we do is about building a whole life -- not just a business -- for our family."