Who Will Take Over When Pop Retires?
by Kate Beem
Staff Reporter of The Wall Street Journal
This article is reprinted by permission from StartupJournal.com.
It took a quadruple bypass for Jay Rains to get serious about handing over family-owned Rains Electrical Sales to his 36-year-old son.
The firm — an electrical-equipment wholesaler in the Kansas City suburb of Shawnee, Kan., for electrical-equipment manufacturers — has been tightly controlled by the 65-year-old father for years. Wes Rains, his son, concentrated on his work as a salesman in his 10 years at the firm, which has eight employees and has $15 million in sales. He didn’t demand, nor was he encouraged, to learn mundane necessities such as payroll or income-tax withholding or legal issues. That left him, he says, unprepared to run the firm should something happen to his father.
“I don’t even know what everybody makes,” Wes Rains says. “There’s just so much paperwork and legalese.”
His father’s successful surgery in December forced both men to confront the thicket of emotional and financial issues involved in succession in a family business. But even now, the elder Mr. Rains isn’t handing things over right away. They’re just beginning a planned four-year transition, after which Mr. Rains says he’ll pull back and concentrate solely on schmoozing customers, leaving his son as the boss. More…
Or, You’re Standing on My Foot!
by Ira Bryck
Director, UMass Family Business Center
The term “dynamic tension” was first developed by early exercise fanatic Jack La Lane, describing how muscles meet resistance with his particular fitness equipment.Rock historians later borrowed the phrase to discuss the partnership of John Lennon and Paul McCartney; dynamic tension between them was the factor, aside from musical skill, that empowered their success as a team.The catalytic reaction of their different energies and personality styles, that one would imagine could only result in bickering and failure, created a product impossible to predict.But the notion that one works best with a conflict free colleague/clone, is to ignore how the world works to produce something bigger than the sum of the parts.
This is significant in light of the research that highlights that some two thirds of family owned businesses that will be transitioning power to thenext generation (some say half of all family companies within the next decade)–either a parent to children or siblings to cousins–will seriously consider a shared leadership form of governance.We live in a culture that values egalitarian rule–our president is no king, today’s model parent is more coach/mentor than ironclad royalty–it is no wonder that the assumption that a business requires a single leader is being questioned among siblings and cousins in business. More…