John Burke, who founded Milwaukee property development firm Burke Properties in 1968, never intended to turn it into a family business.
But when three of his five children showed interest, he created opportunities for each of them to join the company at his or her own pace, and in positions that suited their skills and interests. Wendy joined as a resident manager and eventually worked her way to her current role as president of the company. John Burke II was interested in the management side of the business, so he learned and now manages that side of the business. And Patrick had previous experience in the construction industry, and advanced to run that segment of the company.
Making a company into a family business can be challenging, but it has its rewards, Burke said.
“It’s time consuming and frustrating sometimes, but worth it in the end,” he said.
In order to successfully bring children on board, business owners should consider several factors, said Dean Fowler, president at Brookfield-based family business advisory firm Dean Fowler Associates Inc. The child must be competent enough to sustain and grow the company, and passionate enough about the business to sustain the owner’s legacy. He or she must also be qualified for the role, to avoid the appearance of nepotism.
Peter Giersch, managing director and chief operating officer at Cathedral Consulting Group LLC in Milwaukee, said he advises family businesses to start a child in a position that matches his or her skill level.
“When you start an employee at the top, they know they’re not qualified and everyone else around them knows,” he said. “It’s hard on them and it’s hard on the business.”
Paul Marshall, vice president at industrial construction firm Marshall Erecting Inc. in Milwaukee, started at the company sweeping floors when he was 16, and worked his way up to his current role as vice president. Marshall Erecting was founded by his father, Joseph, who is still president, but now serves in an advisory role as Paul runs the day-to-day operations.
“That was always something that bothered me,” Marshall said. “I wanted to make sure I earned it, because I didn’t want people to think I just got handed things. As I got more skilled, he saw that and he would move me into different positions as he saw fit.”
Fowler recommends business owners have their children work at a similar company for a few years before joining the family business to gain skills and experience, as well as maturity and independence.
That’s what Christine Specht-Palmert did at her family business, Menomonee Falls-based Cousins Submarines Inc. After working at Cousins retail stores as a teenager, Specht-Palmert attended college and graduate school, completing several human resources internships, and then worked as an advocate for the homeless in Florida and at the Wisconsin Legislative Audit Bureau before she returned to Cousins in a human resources role in 2001. She is now president and CEO of the company.
“My parents gave me the opportunity to explore my own interests and seek what I wanted to seek,” she said. “(When I returned) it was a choice that I made because I wanted to be there, not because it was a profound obligation from my parents. Unless you really want it, that can pose some challenges.”
A family member should be subject to the same recruitment and training process as any other employee, Giersch said.
“Where I think it’s really surprising to people is they really have to sell the benefits of a family business to the kids,” he said. “No matter what you do, no matter where you are, you’re going to be working hard. They might as well do it in the family business.”
The fact that a child is joining the business shouldn’t be a surprise to employees, Giersch said. A business owner should set the cultural expectation that the business is a family operation, and work to reduce any appearance of entitlement by asking non-family members to train the child and creating a long-term advancement plan.
Fowler advises families to put in place formal guidelines and share them with both family members and other employees. A family participation plan lays out the guidelines for a family member’s entry into the business (such as completing college or working outside the business for a period of time), the rules for promotion and advancement, and the compensation standards.
The rules should be similar to what other employees follow, “so that (family members are) competent and capable and take responsibility and are held accountable,” Fowler said. “The best of your employees will leave if they feel that they’re not going to be given a fair opportunity in the business as non-family members.”
