The story of what happened when a company's founder brought in his wife to run the company.
You know the nightmare: bring in a professional manager to help run your company, and next thing you know, you don't have your job. Now imagine that the manager is your wife
It was the kind of management meeting that runs on its own momentum, with agenda items nearly checking themselves off. Should we buy a pay phone for the employees to make personal calls? No. Have the 16,000 Mineral Magic kits on back order come in yet? They're on their way. What about the search for an art director? It's ongoing. Then Fred DaMert, wearing his trademark psychedelic shirt, made what in other circumstances might have sounded like a modest proposal.
"I'd like to launch a home page on the World Wide Web," he said, going on to explain how a competing toy-and-gift manufacturer had put its catalog on the Internet. "It would cost about $2,500 to do it." Everybody knew what was coming.
"There's no money in the budget for that," the CEO shot back, and after consulting her trusted managers, she instructed him, "You'd better make a presentation to the budget committee."
He touched his lips, nodded, and said nothing, tapping his pen on the table. Fred DaMert wasn't just looking for a few thousand dollars. He was looking for a way to contribute to the $10.5-million company where he had worked since 1973. Actually, it was more complicated than that. DaMert, 49, had founded the DaMert Co. back in 1973, after inventing a popular rainbow-making prism. Now, in April 1996, about a half dozen years after bringing in a professional manager to, as he put it, "take care of the money," he couldn't get even the smallest of projects approved without a struggle.
DaMert might have been able to console himself with a little historical perspective: he certainly wasn't the first founder-tinkerer to find himself displeased -- and displaced -- by the arrival of an outside manager. But for Fred DaMert, every no-vote on a project was a referendum on his very presence at the company, based in Berkeley, Calif., whose products are available in stores like the Nature Co. and Natural Wonders. He took it personally, and for good reason: the company's CEO was his wife of 13 years, Gail Patton DaMert. "To make this company grow, we have to be honest with each other," she now insists.
They had always tried to be honest with each other, especially back in 1989, when Fred proposed that Gail leave her $70,000-a-year post as a systems-engineering manager at a division of the aerospace giant Lockheed Corp. to join his suddenly surging business. After treading water at $400,000 in annual sales from 1982 to 1987, the DaMert Co. had jumped to nearly $2 million in sales in 1989 -- thanks to heavenly demand for its solar-system mobiles -- and had even posted profits for the first time, netting more than $100,000. Such growth thrust Fred, whose main interest was developing new products, into an uncomfortable administrative role. "I started this company out of love for the product," he says.
He could have searched for an outsider with a feel for the business. But at the time, Fred recalls, he was still nursing the sting of having had two business managers embezzle from him. He wanted someone he could trust. And both he and Gail grew enamored of the prospect of Gail's being able to keep her daily commute short and add the flexibility to work some crucial appointments into her schedule -- their preschooler's Halloween pageant, for example.
The arrangement held out the promise of allowing both of them to do more of what they loved. A worthwhile goal, and not an uncommon one for couples pondering such a plunge. But what the DaMerts learned was that the road to that kind of mutual self-fulfillment is dotted with dangers nobody talks about.
Not that there aren't plenty of helpful experts out there, with much to say about the need for talking things through, for working at keeping each other honest, for finding creative ways to communicate -- renting a cabin in the woods, for instance, to get at what's bugging you while swatting at actual bugs. But where the experts often get it wrong is in their assessment of what's at stake: it's not just a question of either your company or your marriage being destroyed. Revenues at the DaMert Co. have more than quadrupled since 1989, and profits have grown sevenfold. The family is still very much intact, having moved to a mountaintop ranch house, complete with its own redwood grove. Even so, the DaMerts are only too willing to admit that they paid a higher physical and emotional price than they ever imagined they would for going into business together. "As a business owner, I like what Gail has done with the company, and I support her," says Fred. "From a personal standpoint, it was difficult to accept the changes she made."
Gail offers a more direct assessment. "I was trying to be like a good wife and not step on his ego as I came to work in his domain," she says. "If I had to do it over, I wouldn't avoid discussing the things that frustrate me with Fred."
Not even Fred's perception-bending toys can take the two of them back in time, of course. But for couples at any stage of embarking on a business together, the DaMerts' experience raises hard questions well worth taking the time to answer for yourselves. Maybe you'll already know where you stand. But if you don't, realize this: what's at stake may be different than you think.
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1. Making the Decision
Why Are We Really Doing This?
To their credit, the DaMerts were clear about their reasons for going into business together. Gail wanted to spend more time with their children, Brian and Sara. Fred needed someone he could trust to handle the managerial aspects of the business. What they didn't sort out was what they would need from each other to reach those goals.
