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FAMILY BUSINESS

Fathers and Sons

Personal accounts from fathers and their sons on what it's like to run a family business together.

Just about the time we've reduced our life's history to a series of neat, orderly decisions, along comes something to dredge up an unsettling cluster of feelings. An idle comment over lunch reminds us we haven't really forgotten that long-ago dispute. A well-put question forces us to reexamine our not-so-logical motivations for pursuing this business strategy instead of that one. Most evocative of all, a stranger's story can bring back memories of pivotal episodes in our own lives -- of what happened, certainly, but mostly of how it felt.

Such a story came to light last summer, when An Wang announced the end of his son Frederick's three-year term as president and chief operating officer of Wang Laboratories Inc., one of the world's largest publicly traded corporations, with a sizable portion of the stock controlled by its founding family. The then-38-year-old scion had not only failed to bring Wang out of its mid-1980s doldrums, but had left the $3-billion company some $424 million in the red. Today An Wang, nearly 70 and under treatment for cancer of the esophagus, is supervising a nonfamily president, and COO Fred Wang is out of a job.

Some readers may have written off the Wang story as a big-business story, or as more fallout from the latest computer-industry shakeout. Others may have dismissed it as just another sorry saga in the stereotypically troubled annals of family business or as an example of the effects of Chinese managerial values on an otherwise American company. But there are many parents and children -- fathers and sons, especially -- for whom the Wang story is all too familiar.

These people know well the combination of pride and distrust with which fathers goad sons into a family business. They know, too, the equal parts of ambition and insecurity within the typical successor-son. Moreover, having lived through similar circumstances themselves, they understand the pressure that comes from trying to run a company in a world that both reveres and reviles family business. They've been there to see outsiders root for the success of their companies. They've also seen the supposed boosters pounce on the slightest indication of failure.

In the following pages, you'll meet six men who tell about the stresses and strains they've experienced in trying to establish a business relationship with a father or a son. Using the Wang story as a springboard, a few eagerly share newfound perspective, even wisdom, on the subjects of family business and succession.

Others, for whom such topics still sit like ice cream on a sore tooth, only manage to tell their tales and face their own conflicted emotions. Still, if advice and acceptance are in relatively short supply, empathy is not. To these men, father-son conflict isn't just the stuff of Greek mythology. And it's unlikely that it will ever register with them as just another stranger's story, just another forgettable headline.


PAUL SNODGRASS

"Working for your dad is always tough," says Paul Snodgrass, 33, who last September took over as president of Pella Products by Clark-Snodgrass Co., a $7-million window distributor headquartered in Toledo. "People say that all the time, but it's more true than people appreciate. There's loyalty -- you really want to carry on the family line. But you also have your own pride to consider. And then, aside from the personal relationship between father and son, there are always the economics. Dad loves you and wants you to take over the business, but he also put heart and soul into that business, and he's not going to let anybody screw it up -- not even you. And sons like me think, hey, don't discount me so quickly. I'm young, but I'm experienced, and I have some good ideas that don't deserve to be shrugged off.

"I'd always wanted to be an oceanographer, and my father never discouraged me. He always said he just wanted me to know there was something for me in the company, if I ever wanted it. As I matured, I did begin to recognize the opportunity in the family business, and I did go to work for him. But after a while I took a leave and went to California to find myself. I worked for another window company out there, and found I really enjoyed the design aspect of the work. What finally brought me back to Toledo was my father's open-heart surgery. I saw my calling; I decided to sacrifice for the sake of my father.

"Why? Partly because I wanted my father's approval. I'm sure he would have respected anything I did, but doing what he does -- and following in his footsteps -- was what would mean the most to him. I can understand it better now that I have a son of my own. He's just eight years old, and I'm already hoping he'll be a business manager like me. I don't want him to make a decision he'll regret. I want to make it a nonpressured decision, just like my dad made it for me. I am, however, going to insist that my son get his first experience outside of this part of the window business. I don't want him to go through what I did in the early years.

"My father seemed very relieved when I came home to work for the company. But once his recovery got under way and he became more active in the company, the pressure mounted. It got to the point that he actually said, hey, you're going to have to prove to me that you can handle this business.

"He had formed what we called the A-team, consisting of him, me, and two officers who were the next logical choices to succeed my dad, if I didn't. And each of us was assigned a test. Mine was to set up another branch of our operation in Lima, Ohio. And it worked out great. I think it was then I finally impressed the employees that maybe the kid had some smarts after all. Maybe I wasn't there just because of the father-son thing.

"But we also had a board of advisers, some real sharp financial people, and they made it a practice to really drill me about the things I was doing. These were people who were there basically on behalf of my father. I felt very much on the firing line, like I was standing there in my armor, just trying to ward off the bullets. It didn't seem fair. I came to help my father in his hour of need, and to get all these tests and budgeting and analysis -- well, my father hadn't had to go through that.

"Finally I pretty much told them that if they were really a board of advisers, fine, I'd consider their advice if there was something they wanted to discuss. But if they and my father thought they were going to have authority over me and my destiny, then they should go out and find somebody else. After that, the inquisition, as I call it, got more constructive.

"I think everybody who worked for us knew that my dad and I were having difficulties. It was hard to win my father's confidence. It took a while to really believe it when he said he approved of me. There were many times I had to ask myself -- and my mother -- whether the financial opportunities and the future of the company were worth destroying my relationship with my father and my family.

"I've had the presidency since last September, and my father has definitely gotten out of my face since then. He has an executive suite office away from the hub of activity. It's a place for him to remain active, but not in the day-to-day business of the company. Mostly he handles our pension and profit-sharing program, our investments, and longer-term things like that. He'll always command the respect of our employees, but it's clear to everyone that I'm running things. There have been bitter words and misunderstandings, but now we're working as a team, and the whole company is benefiting."


ANDREW KAY

"I think I know exactly what the Wangs are going through, because one of my sons was president for a while, too," says Andrew Kay, founder and CEO of Kaypro Inc., a Solana Beach, Calif., personal-computer company that, like Wang Laboratories, is publicly traded with a large portion of its stock family owned. "Things went sour not because he was a son, but because we had a difference of opinion, and that can happen to the best of professional managers. He wanted to bring in outside funds and sell the company. So he's gone into some venture capital work for a while. Nothing else has changed. The Kays remain a close family.

"So, who knows? My son might be back in the presidency someday. Someday I'll decide I've got things squared away. Then, when the direction of the company is set, and if we can agree on certain principles, maybe my son and I will start all over again. After all, it wasn't my desire to take the job back. He left, and there it was. Somebody had to take over.

"Now, we're supposedly an example of 'a troubled family business.' Well, there are managerial conflicts and differences of opinion in most companies that don't have family members, but in those circumstances, people look for other reasons. Where there's family, they figure that's reason enough. They don't look any further. It's like saying that if milk consumption's going up, and so is cancer, milk must cause cancer. It doesn't mean anything, but it makes a great headline.

"When we ran into trouble, one sharp guy wrote a headline that said, 'Too many Kays, not enough pros.' He even had me believing it for a while. Then I realized something: if it hadn't been for the family and its cohesiveness, the company wouldn't have stayed together. When people stopped buying Kaypro products because the media told them we were going out of business, it was the family funds and the family relationships that held it together. If Wang survives this, I suspect it will be for similar reasons."


A FORMER CEO

"I guess I feel kind of a brotherhood under the skin with Fred Wang," says a man in his thirties who requested we not identify him by name. He succeeded his father in a medical-manufacturing business in the Midwest, only to be asked to step down by his father scarcely two years later. "I've never seen my father as a coward or a quitter or anything like that, but when I look back on it, I think it was easier for him to make a big deal of promoting me and supposedly letting me set the new direction for the company than it was for him to tell the truth -- which was that, for whatever reason, he just couldn't step up to the new demands being placed on him at the time.

"Like in the computer industry, there had been a lot of trouble in our industry, and companies were having to make significant changes just to stay with the pack. And my father's a very respected man in his community, like An Wang is. I'm sure he was very conscious of making it to retirement with his so-called entrepreneurial credentials intact.

"I knew I wasn't ready for the job, and deep down, I think he did, too. But there were people around him who convinced him that family continuity was important in the business. They said he could help me out when I needed it. And my father and I both said, 'Sure, you bet, no problem,' instead of hashing out what we really felt and wanted, and how we'd go about really making this happen, day to day. I've got to take some responsibility for that part of it, too, I guess.

"So here we were, sort of a tag team managing the company. I was supposedly running things, but he was at every meeting, 'just gathering intelligence,' and twice he publicly second-guessed my decisions. After a while, the employees didn't know who to listen to. Customers acted like they'd been slighted if they got me on the phone instead of my father. No, it didn't do wonders for my ego.

"But the worst, by far, the thing that will stick with me forever, is not that that my father chickened out and deposed me, but that he did it in a way that didn't give me a ghost of a chance of saving face. He didn't kick me up to a vice-chairmanship, or put me in charge of a special division, or any of the other semi-humane things I could think of. He just came riding in on his white horse to save the day. I have no idea how Fred Wang felt when it happened to him, but for me, it was a feeling of being used, misused, abused, you name it. It did not feel good. It still doesn't, almost five years later."


LARRY MICHELS

"One of the biggest problems that Fred Wang or any other successor has is coming into an established culture," says Larry Michels, president of The Santa Cruz Operation Inc. (SCO), a Santa Cruz, Calif., computer software development and distribution company. "My son, Doug, and I built this company together, to indulge ourselves in doing what we do, dabbling in high-tech management issues. And we really do manage it together. He's the number-two person, but it's hard at times to see if he's CEO, chairman of the board, or executive vice-president. The roles shift as we move through daily business. We're both dancing to and playing in the same orchestra.

"Employees sometimes try to deal with us separately, as if we're not equals. Some, in fact, have lost their jobs thinking they could work here without dealing with Doug. Potential investors had problems dealing with our management style in the beginning, too. There's a real stereotype of the father-son partnership that patronizes the son, and sometimes it's gotten in our way. But it's gotten easier and easier with time.

"We've managed to impress upon people that not recognizing Doug is not to recognize a big chunk of the heart and soul of the business. We've made it very clear that if you have a patronizing attitude, you'll fail at SCO, or you'll not do business with SCO. After a few years of fighting it, it's rare that we find somebody who doesn't treat Doug as an equal. I don't think Fred Wang ever reached that stage. I think he was always in that shadow. Still, I believe that many of Wang's mistakes had to do with bureaucracy -- not with any father-son situation that may have developed there."


ERNEST D. KAY JR.

"Just as there's a Chinese culture, there's an old Southern culture, I think, and they both say 'Respect your elders,' " says 60-year-old Ernest D. Key Jr., who succeeded his father as president of Atlanta Belting Co., in Atlanta, back in 1964. The 67-year-old company is now a $10-million operation, with 100 employees. "Maybe Fred Wang's a throwback to my era. He seems to have succeeded his father mostly because that's what his father wanted, and if that's true, I'm with him.

"I grew up knowing that I was going into the family business. It was expected. Now that I think about it, my father never said why it was so important that I come into the company, but I think it was based on the idea of the agrarian society, where the land is passed down through the male children. I think he ran the company like a farm, and expected me to be one of the hired hands. Was that fair? Sure it was. I felt like I should work for the company. Sometimes I've wondered if that wasn't a mistake, but . . . well, it ain't doing me any good at 60 to think about that.

"Early in my career I did rebel once. I got a job somewhere else, but I never actually took it. My father and I had a very bad disagreement, and I can't recall whether I got fired or quit -- it was one of those shouting matches. My brother-in-law told me I'd hurt my father and that I should go talk to him. I did, and we had our most meaningful conversation up to that time. I came back to work, and he was glad I did. So was I.

"A father-son relationship is hard, because it's emotional. Sons revere their fathers, but they also know a lot about them, and that makes things hard when they're in business together. Say that you, the son, have this sterling idea. You bring it to your father on a bad day, and because it's a bad day and he's known you since you were spitting Pablum he says it's silly. If you weren't his son, he'd listen. But you don't think of that. He's your father, and you believe him, and it hurts.

"Sometimes it's the opposite. Maybe he's more enthralled than he should be with that sterling idea. What I'm saying is, the emotion of the relationship makes everything carry so much weight. You disappoint each other very easily, yet you also have tremendous emotional power over each other. It just doesn't happen like that when it's a professional manager and an employee. Things are different when Dad's the boss.

"My father's friends always said that whatever my father touched turned to gold, and that permeated my thinking. On several occasions, when we didn't see eye-to-eye -- even though I was convinced I was right -- I thought, who was I to argue with a man who had accomplished so much in his life? You can say I was being noble or loyal about it if you like, but it was also that he was a proven entity, while I was unproven."


MARK TAYLOR

"Was it difficult to succeed my father? Only in the sense that I had to work harder to prove myself, to show people that I wasn't where I was just because I was my father's son," says Mark Taylor, 39, president of Tyndale House Publishers Inc., a Wheaton, Ill., publisher of religious books and magazines, with 160 employees and more than $25 million in sales. "I've been president and CEO for five years. My father, Kenneth N. Taylor, is still chairman.

"There isn't much discussion of real business strategy between me and my father, but he does influence corporate values -- why we do what we do. Even though I've got the title of CEO, he remains the visionary for the company. He founded it, he brought it to its first level of success.

"There were plenty of times I wished I worked somewhere else, in a totally different industry, just to have the experience of seeing how somebody else does something. But I didn't. I had to do it all here, and it took a few years to work myself through that identity issue.

"As I look at Fred Wang, he had to have been aware of the lack of confidence people felt in him. And if he hadn't been able to do the things that would allow him to see himself apart from his father, I don't think he could have enjoyed his job. I know I wouldn't. Fred probably had a lot of internal conflict as to whether he was doing a good job, and whether he was even capable of doing a good job. Were I in his place, I'd probably be very, very relieved to see Dad come back and take over.

"For me, my confidence comes in recognizing that I have different strengths from my father. I know I can complement his skills. But that realization came as a function of age. Early on I was frustrated because I knew I wasn't super-creative, like my father. It bugged the dickens out of me. But one day I recognized that he didn't need that from me. He needed someone to help him sort the good ideas from the bad ones. That was liberating, knowing I had a unique contribution to make. It allowed me to make peace with myself."

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