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The
ambitious and successful family business depends on the assumption of a
high
level of responsibility by non-family members. It has to make them
successful
within the context of the family owned firm. In
this article we will analyze the mentoring “theories”
and behavior of
four leaders of successful family firms and assess their impact on
specific
dedicated, talented and key non-family employees. All are different, but all are the big-hearted “chiefs” of their
organizational cultures. They are highly
skilled at articulating the values and the unique ways of doing things
that
make their firms vivid, exciting and challenging places to work. They are the conscious captains of their
companies. Their employees listen to
them; the respect them; and they follow their lead.
It
is their status as the leaders of an organizational clan that explains
the
success of these leaders and their businesses. This article does not
address
behavioral coaching per se. Rather, It is about how the context that
these
family business leaders have created makes high performance by key
employees a
given, a natural by-product of the culture. And,
in understanding the features of these work cultures
that are
functioning so well, the reader may gain insight into what to support
and what
to change in his or her own organization.
All
of the key employees that I will discuss have many opportunities to
work at
other organizations, especially after having learned a variety of
important
lessons within the context of the family firms described.
None have an equity interest in these
companies they work for. However, they make the choice every day to
invest
their physical and mental energy in these closely held enterprises
rather than
go somewhere else. Why?
- Because they have a closeness and a
relationship of mutual respect with their mentors and
- Because
they know that they are part of a rare and special institution where
key employees make good money, develop professionally and form strong
personal connections to other staff members, customers, suppliers and
the larger community.
In
other words, the leaders of these firms have created “magnetic
organization”
that people love to join and hate to leave. Let’s
look into how they did it.
The Firms
- Economy Hardware (http://www.economyhardware.com/)
is a second generation firm headquartered on the premises of a building
in Cambridge MA that originally housed the
furniture store of the current CEO’s grandfather. For
the last decade, Larry Friedman has overseen the growth of the business
his father and mother started about fifty years ago to its current four
thriving retail outlets plus a custom cabinet business for young
apartment dwellers. Revenues are in the
neighborhood of $15M/year, and the firm employs approximately 75 people. One of these is Peter Hughes, who is Economy’s
Operations manager and has been with the firm for over twenty years.
- The New England Mobile Book Fair (http://www.nebookfair.com/) is a
firm with revenues similar to those of Economy. Louis Strymish founded
the Book Fair in Newton
MA about fifty
years ago, and it is currently owned and operated by Mr. Strymish’s
sons, Jon and David, and his wife Bea, with the assistance of a variety
of family and non-family employees, including Matt Demery, who is
currently manager of the Book Fair’s retail store.
The Book Fair’s comprehensive selection is well known
to book lovers throughout New England. The Fair, with 110 employees, also operates a
warehouse that is three times larger than its cavernous store, runs an enterprise
focused on cook books and maintains a variety of other activities
related to the book business.
- According to its literature, William
Raveis Real Estate (http://raveis.com)
is New England’s largest family-owned
real estate company. Bill Raveis opened
his first office above a grocery store 30 years, and he now leads over
1600 sales associates working out of over thirty five local offices. Raveis has two sons currently in the
firm. Bill also has a daughter who may
become involved in the company at some time. The
real estate arm of the business handles approximately $3.5 billion in
real estate transactions yearly, and Raveis also does about a $300
million mortgage banking business. Every
aspect of the enterprise is growing. Much
of Raveis growth can be attributed to the professional partnership
between Bill Raveis and his right hand woman, Marianne Evick, who we
will learn more about shortly.
- Gordon Brothers (www.gordonbrothers.com) is a 100 year old, Boston-based, company
specializing in asset management, capital solutions and advisory
services to hundreds of healthy and distressed retailers.
With 150 full time employees and 200 field
representatives, Gordon Brothers has many business lines.
The asset disposition side of the organization alone
handles approximately $5 billion in transactions. Gordon
Brothers has been led for a number of years by Michael Frieze, whose
son is also a member of the firm. As with
the other firms in this sample, Gordon Brothers has relied heavily on
the close relationship between it leader and key employees such as
Larry Siff and Matt Kahn for its growth.
“The company is a
reflection of the person at the
top.”
So
says Marianne Evick, who worked with Bill Raveis for most of his firm’s
phenomenally successful existence. Here
are some of the characteristics of people at the top that attract and
keep
people like Marianne:
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Holding Clear Core Values
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Brand Based Decisiveness
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Always Challenging and Generous
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Accessible
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Let’s
look at each of these:
1.
Holding Clear Core Values.
Everyone
of these mentors knows what his core
values are:
- Larry Friedman
of Economy Hardware emphasizes the importance of being
well-rounded: “I can go
into any social situation and be
part of it and get enjoyment out of it from a sports event to the
ballet. The average age of the people who
work for me
is about 23; so, I’m sort of running a ‘university’ around here where
people
grow up and broaden out. Economy
Hardware U is about a three year ‘curriculum’ for most people, but it
seems to
work. I’m a ‘The glass is 3/4th
full’ type of person, and I think people learn something from me about
surveying the options that are present in any situation.”
Certainly
that’s the way Peter Hughes tells the story: “I
was more of a Bill Parcell’s type of
person before working here.
I would yell at people if I didn’t like their
performance. Larry would look at what
people are not doing and ask, “What is another way to get the job done? How can I change my behavior to get a
different response from others?’ I’ve really learned a lot from that
approach.”
- Jon Strymish’
firm, New England Mobile, has many employees that other organizations
might
find “odd” in part because he “has a sense of how much so many people
have to
struggle in life.” He and his family
attract dedicated employees because they are empathic. They can see potential, contribution and
greatness where others see only long hair, tattoos and too much
education: “I’ve seen a lot of great rock
‘n’ roll. Paula Cole says that ‘music is a
way of
bringing pain to the surface.’ By
understanding something about another person’s pain I can see the
‘flower’ that
is in another person.”
This
extension of understanding had big impact on Matt Demery:
“I left the store for a year in the early
90s. But the manager wrote me a letter
inviting me in to a position. The family
put me right back on the health program and included me in the profit
sharing
plan immediately. They weren’t required
to do that. That made a big impression
on me.”
- Michael
Frieze
of Gordon Brothers is synonymous with integrity.
He has very clear notions of right and wrong.
Michael’s follow-through is also legendary among his employees. Matt Kahn was CFO of Joseph A. Banks Clothier
before joining Gordon Brothers. Here’s
how he thinks of Frieze: “He’s good to
his word. If he shakes his hand on a
deal, that’s what will happen. I’ve
never seen him compromise his ethics over anything, and that’s been a
key
mentoring. It’s a serious issue. When you’re trying to make a lot of money,
it’s hard to walk away from a deal. But,
it’s a non-issue here. If Mike says,
‘That’s a bad guy to do business with,’ we don’t get involved.” Larry Siff agrees: “He
has the highest integrity in a industry
that is not like that.”
- Teamwork is a key value for Bill Raveis. It is
wrapped up in
his personnel assessment model. ICET: Integrity,
Competitiveness, Entrepreneurialism and
Talent: “Integrity to more than your own
personal
ambitions is most important. Competitiveness
refers to being goal oriented. A person
who is entrepreneurial can adjust to
all sorts of environments. And a
talented person can do the work. I put
my high beams on the people with this combination.”
Not everyone wanted to be on Bill’s type of
team: “I remember someone complaining to
me about Marianne Evick years ago. [He
was a good performer in the business, and Marianne was relatively new.] He told me, ‘Either she goes or I go. He went.” (And
now it’s about $30B in sales later.)
The
type of team Bill built exerted a strong pull on Marianne:
“I remember his bringing a small group of
branch managers together at a meeting and saying that the time would
come when
we wouldn’t bee able to sit in one room together. He
is truly a man of vision….When I met him
in 1978, I was newly divorced, and I needed to know I would have a
future. My initial interview with him
impressed me so
much that I was willing to go back into a sales representative job from
being a
manager at another firm.”
2.
Brand
Based Decisiveness
According
to their employees, each of these mentors builds the firm’s brand, and
sometimes in ways that are surprising. These
strategic decisions are themselves “statements in
action” to key
employees that speak louder than any words.
- Economy Hardware, for example, made a
decision years ago to focus on young, urban, and transient students. All of its stores are in densely packed, high
traffic areas. It’s personnel are similar
to its customers. In fact, Larry Friedman loves customers: “Economy
is like a big party. Lots of different
types of customers and lots of different employees.
I tell the employees that it's like they are out
schmoozing at a party. Customers aren't
just walking in here. They have a reason
for showing up. We have to find that
reason. Customers tell us that they
love the atmosphere of the store. Our
employees like to stay at this party.”
Developing an
attitude that works with this sort of clientele and these sorts of
employees is
something that Larry has had to work on with Peter:
“In his late 40s, Peter’s older than most of
our employ comes out of something military mind set some times. Sometimes, he wants to bark orders at people. I tell that we’ve got to give these young
employees the skills and the information they need to deal with the
people
coming through the door. They’ve got to
mesh. And, I know Peter has gotten more
skilled at working with employees by thinking this way.”
- With the
Mobile
Book Fair, the brand based decisions have involved sticking with a
steady
course in a way that has given key employees courage and deepened their
commitment to the firm. For example,
during the Internet boom, there were great concerns that the Book Fair
would be
driven out of business dotcom merchants. While other retail booksellers
were
investing millions in glamorous websites, Jon Stymish and the rest of
his
family persisted with their unique way of doing business (e.g.: having
one of
one of the best “remaindered” selections of books in the country,
employing
section specialists who established relationships and a reputation for
excellence with hundreds of customers, buying up lots of books that
they knew
would be hits before anyone else figured that out, etc.).
The status in 2003: A lot
of the fancy website bookstores are in
big financial trouble while the Book Fair has new customers everyday
who leave
mumbling the Strymish’s motto, “I only came in for one book….”
The Styrmishes have
also been willing to take on hot political issues.
When a developer across the busy street from
their store wanted to put in a mega supermarket, the Strymishes were
part of
the leadership group that successfully opposed the plan.
They got a huge amount of press for taking a
position that was popular in the local
community. Plus, when a residential
development was finally approved instead of the mega-store, they got a
shot at
a thousand potential new customers. How
does this affect key employees like Matt Demery: “I
truly love the store. There is a place in
this community for the
Book Fair. It would be a tremendous loss for Newton if a place like this were to
close
down.” In the world of organization
theory there is a concept called “company-mindedness.”
Demery’s passion is one of
the best definitions one will find for
the meaning of
that term.
- The Raveis
brand
is denoted by Bill’s decision to remain focus on Connecticut
and to become that state’s biggest realty in the face of the
opportunity to go
into Westchester County
in New York
during 80s. He knew not to dissipate his
firm’s energy. He also invested in
highly innovative marketing and was among the first realtors to put his
agents’
pictures on sales brochures, making the relationship between agent and
clients
much more personal. Marianne: “Bill
tied the brand together. He designed how
the consumer perceived us and how our agents thought of the firm. He was into technology and training. When there was a recession in 1989-1990, he
poured money into training, which was the first area that other firms
were
cutting back. He was thinking
strategically while others were thinking locally. Real
estate was an “old boys’” business in Connecticut
before Bill.” Marianne thinks of Bill as
a “brilliant” visionary, who is “almost like a brother” to her. Bill is convinced that owning his own company
is what allows him and his employees to exhibit the sort of foresight
that
Marianne admires so greatly. “I can be
intuitive and I can encourage my employees to be intuitive and creative. Corporate America is not an
environment where
you can follow your intuition.”
- Community spirit
is a leading feature of the culture at Gordon Brother, and it is very
consistent with the firm’s reputation for integrity. In other words,
Frieze’s
values infuse the firm’s brand. Every
member of the firm gets three days of paid leave time to work on a
community
project of his or her choice. The firm
is building a house in connection with Habitat for Humanity. A community service award is made every
year
and it is simply a matter of course that everyone at the firm will be
involved
in “giving a little back,” in Frieze’s words, in some way.
Larry Siff: “I’ve always been involved in
non-profit work, but, knowing that your CEO really has his arms around
you for
doing that sort of work—that’s a really great feeling.”
3.
Challenging
and Generous
Kathy Kram’s groundbreaking study, Mentoring
at Work (University Press of America, 1985), anticipated many of my
findings. For example, everyone I talked with emphasized the importance
of
having challenging assignments to the establishment of trust in the
family
business mentoring relationship. These
challenges were of many different sizes and shapes, but there were lots
of ‘em,
and they were frequently at just the right level to establish the next
level of
professional intimacy needed by the relationship.
For Peter Hughes at Economy Hardware, the
first challenge came
relatively soon after he was hired while living in a half-way house for
alcoholics. Larry Friedman’s father and
mother, Herb and Harriet, were going away for a couple of days to a
social
event. They knew that they had hired a
recovering alcoholic, but they also knew that he was a very hard worker
and
that he had had significant experience in retail merchandising. They gave him the key to their store and
asked him to open up and lock up in their absence.
It was a very big deal to Peter for someone
to give him such a responsible job. Shortly
after this event, the Friedmans decided that they
didn’t think
that the jalopy Peter had acquired from his sponsor at the halfway
house was
appropriate to a employee they thought so well of. So, they gave him a
new
company car, and he gets another one every couple of years. Now, twenty years later, he is head of
operations with enormous signatory power and decision-making authority
over
every aspect. At his 20th
anniversary party, they gave him a very nice small boat.
He keeps a large picture of the boat near his
desk.
You may recall that Matt Demery returned
to the Book Fair in 1993 after
a year away. The Strymishes asked him to
manage their cookbook section. They were
already in the cookbook distribution business (http://www.ecookbooks.com), so
this was
one of the most important “domains” in the retail store. David Strymish
asked
him to make it “look like the catalog,” and left him on his own to get
the job
done. Matt would have liked to have had
more specific direction, but he knew that he must have done something
right
when Boston Magazine acknowledged
that section as the “Best in Boston” the year Matt took over. (“I
became a real
‘foodie.’ I understand that real cooking
is an art.”) It’s now ten years and several promotions later. Matt is, in Jon Strymish’s words, one of the
people who “really gets the Book Fair.”
Who gets to “own” the various sections of
the Book Fair is a major issue
among the Strymishes. Providing an
insight into how “sponsorship” can work within the family firm, Jon
described
how he had to “fight” for several employees that his brother and mother
had
questions about initially. One of these
was a man twice Jon’s age. So, he had to
help that employee understand his family’s expectations while
simultaneously
keeping his skeptical relatives—who he greatly respects—at bay. Ultimately, he won and the employee in
question has a huge following.
4.
Accessible
Being around and being engaged are two
aspects of accessibility that
meant a great deal to the key employees I spoke with.
I use the term to encompass what many people
might refer to as coaching as well as simply being in contact.
Matt Kahn and Larry Siff, for example,
talked in a deeply respectful way
regarding the quality of Michael Frieze’s attention:
- There are a
lot
of fast paced decisions being made here; multiple, multiple deals with
multiple, multiple teams of people. Mike’s
accessible, twenty-four hours a day. He’ll
give you his complete attention. I know
how to pay attention, but I don’t have
that skill as well honed as he does. I’d
like to have that same intensity of focus as Mike.
- Shortly after
I
came in to work here, we were purchasing a $12 million inventory. Our own money was at risk.
I worked up a rationale for why we should do
it. Michael started asking, but Mike
started asking me a lot of questions. I
felt unprepared. The questions he was
asking and the information he wanted forced me to rethink these types
of deals. Now, if I were to be coming in
with the same
deal, I would have thoroughly analyzed it before going to see Mike. I would have the first, second, and third
tier issues already thought through. [By
learning how to think more how Mike thinks], I feel aligned with him. He’s on my side. When
I’m excited about a deal, so is he!
Michael Frieze knows that he’s accessible
(and, as we’ll see below, he
wants to be accessible to respond to certain specific needs of his
employees). But, he also knows that his
accessibility won’t be abused: “They use
me wisely.”
Bill Raveis proved the same point to his
employees early in the 1990s in
a way that completely amazed them and changed the way in which they
related to
their customers. Raveis ran a set of
brand building advertisements in which he included his picture and his
home
telephone number. His staff members were
convinced that he would be inundated with calls from all sorts of
cranky
customers. They were appalled that they might be expected to do the
same
thing. Bill got ten call during the next
thirty days, and they were virtually all from polite people looking for
some
kind of specific information. It’s
commonplace now to have a personal relationship with real estate
brokers and to
call them at home if you need to. Bill
Raveis was at the forefront of showing real estate agents what it means
to be
accessible to customers.
Matt Demery described his experience with
the Strymish family’s
accessibility:
- Being in a
family business, I see the people I work for all the time.
Bea Strymish is 80 years old, but she comes
and works hard virtually in every day. Jonnie
Strymish and I must talk twenty times a day. These
people are always in touch with each
other. We have formal staff meetings,
but often Jon and I get more done during the fifteen minutes when we’re
cleaning up some part of the store as we do in one of those
pre-arranged
sessions.
Or, to put it as Peter Hughes of Economy
does: “There are no bosses here. Only
workers. I learned that from Herb
Friedman.”
Making
Space Available to Lead
Many, if not most, people in executive
positions aren’t really
“available” to lead. Studies of what
people really do at work indicate that many people who are owners and
senior
organizational executives spend much more of their time on operational
matters
than they know (and a lot more than they want to admit!).
In the case of this sample of leaders,
however, we find a group of men who have created the mental space to be
what
Barry Oshry calls “Tops.” People who are executives and owners have the
strategic management of the entire organization as a formal
responsibility. They just don’t have the
time to do the job well. A real Top
creates responsibility by people at every level in an organization for
the
well-being of the whole system, and, by doing so, he or she is freed up
to
really act like a senior executive. (Seeing Systems, Barrett-Kohler Books,
1995). That’s what the mentors studied
here have been able to do to a significant extent.
Some of their specific strategies for
getting up “on the balcony” of
their organizations:
- Empower as many people at
as many levels as possible to
make important decisions in their interactions
with customers and suppliers.
- Accept mistakes. Every one of
the leaders I spoke
with cited an example where a mistake, even an expensive one, was worth
it in
terms of what a key employee learned and how it created a further bond
between
the leader and his worker.
- Invest
in people that mainstream employers might
overlook. This strategy
has been
particular effective at Economy and the Book Fair, which both hire very
intelligent
people that don’t fit in well in many corporate settings.
Marianne Evick was vulnerable as a result of
her recent divorce. Many organizations
are afraid to hire people who have personal risk factors.
But, you can bank the results if you turn
that vulnerability into loyalty.
- Pay
close attention to the integration of family
members into the workforce. For example, Bill Raveis and Herb and Harriet
Friedman (Larry’s parents) introduced their children to the business at
a very
early age, having them involved with “grunt” work of all sorts. Through this on-going connection, people they
would be working with later got to know and care for the owners’
children. (Plus, the way that the owners
interacted
with their children fed the respect that a number of the key employees
had for
their bosses.)
- Don’t
put up with nepotism. A number of
the key employees I spoke with noted how motivating it was to them to
see a
poor performing relative get fired by their mentor or how impressed
they were
with a leader not putting a younger relative in a position of
responsibility
that he or she wasn’t yet prepared for.
- Foster
intellectual curiosity. All of these
leaders are idea people. They talk with
their employees about all sorts of things. Bill
Raveis distributes books to all of his managers
as home work for
management discussions. Jon Strymish is
like a walking kiosk of information and insight about the arts and the
book
business. Larry Friedman invests in
professional coaching for key employees, as does Michael Frieze. As noted earlier, Frieze has a wide variety
community concerns and expects that his employees will be thinking and
talking
about such matters as well.
- Focus
on the human system and emotional people
issues.
Michael Frieze anticipated that people issues
and personal will be main topics his key employees seek his advice on,
and he’s
right. Larry Friedman talks about
“interaction as the game” at Economy, so he spends a lot of his time
helping
people think about how they manage various types of interactions. Jon Strymish recounts his skill at helping
family members and key employees appreciate each other.
Bill Raveis concentrates on helping his sales
force see the world through the customers’ eyes.
- Know
the business. In
addition to thinking the
big thoughts, each of these leaders had also come up through the ranks
of their
companies and their industries so that their views are highly respected
by
their employees. Frieze, Strymish, and
Friedman all grew up in their companies and Raveis built his from
scratch. So, they’ve forgotten more about
operational
questions than most people will ever learn. This
helps them coach their key employees who learn
more about how to
think like the owner does.
- Listen with respect. Every key
employee I spoke with expressed great appreciation for the fact that
they got a
real hearing from the owners on whatever the issue might be. In fact, it was clear that there were times
that they had as much influence on the “mentor” sometimes as the mentor
might
have on them.
This is not a full indexing of
the methods these leaders use to
establish and protect their positions as “Tops,” but it’s an indication
of how
they position themselves in the minds of their employees.
The embrace of the operational
responsibility by key employees and the “holding” of the organizational
culture
as a totality by the owners constitutes a self-reinforcing dynamic. This is the virtuous cycle of a strong,
magnetic culture. This organizational
heart creates an advantage that can outlast and out fox competitors who
can’t
buy it no matter how much money they spend on self-promotion or how
many
successful small companies they acquire and don’t understand.
My father, who owned a successful small
business, used to tell me that
“No one ever invaded China.
China
always invaded the invader.” I’m not
sure that he had his history exactly right, but I think he was making
the point
that people who really have cultural moorings have less to fear from
the
shifting tides of daily events than those who do not.
My father’s key lieutenant worked with him
for over thirty years and was a significant beneficiary of his estate.
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