Keep It In The Family

---

Enjoy the privileges of a family business while minimizing the pitfalls

From a young age, the two children of Mike and Narissa Rampey often heard their parents announce that going into the family business was not an option.

“We wanted our children to understand they had to make it on their own,” says Narissa Rampey, who with her husband started Air Assurance in 1985. “Also, Mike had once worked for a family-owned business in which people did not have a good relationship. He didn’t want to duplicate that in our own family.”

Eleven years ago, however, the Rampeys’ plans to sell their Broken Arrow, OK, company and retire fell through—about the same time their son David was facing yet another relocation in his career with a large corporation. The parents made a job offer, and their son—who had worked for Air Assurance as a teenager— eventually accepted.

“Our son did not start in a leadership position, because we wanted him to prove himself to everybody. That first year, he set sales records for the company,” reports Rampey, with more than a little touch of motherly pride. After four years, the couple promoted their son to sales manager and, two years later, welcomed him as a partner in Air Assurance. She says, “Our son didn’t get the business handed to him—he has worked very hard for it.”

Like Rampey, John Sedine has the pleasure of seeing and working with his son, a mechanical engineer, every day. He also employs his daughter, who earned a business degree and now serves as his office manager. “My rule was the kids had to work full time someplace else rather than come directly into the family business,” says Sedine, president of Engineered Heating and Cooling (EHC) in Cedar Springs, MI. “Seeing the other side of the street makes a difference— they have to be sure the family business is what they really want.”

Calmer Waters
Over his 36 years at EHC, Sedine has worked with as many as five family members at one time. While he relishes the advantages—“It’s a joy to share your successes with your family,” Sedine says, “not just people you don’t really know”—he also acknowl edges the disadvantages.

“A family business is never all fun and roses, and the broader the reach of family involved, the harder it can be,” he continues. “We’ve had our share of sticky situations.”

To navigate through your own company’s times of major or minor turbulence, here are tips for keeping everything running smoothly.

Communicate your expectations. When Mike and Narissa Rampey’s son moved into company management, they told him it was time to become involved and visible in the community. “His generation isn’t very interested in community involvement, but he did what we asked,” Rampey reports.

As with anyone seeking employment at EHC, Sedine meets with family members to explain what working for his company entails. For instance, Sedine requires all employees to take the Dale Carnegie course. With relatives, he says, “I make sure they understand they’re here to do a particular job, and do it well, not because of family entitlement.”

After retiring from a full-time job, for example, Sedine’s wife worked part time for the family business. “As we became busier, however, we needed somebody more than part time,” recalls Sedine, who initiated a candid discussion with his wife. “Rather than working more, she decided to enjoy retirement.”

Value qualifications over family ties. Richard Dean, president of Environmental Systems Associates, Inc., (ESA) in Columbia, MD, had the opposite experience—the wife of his former partner preferred working to retirement. “She started by answering the phone and helping with bookkeeping, which is fine when you’re a small business,” says Dean, whose company now employs 27 and does $5 million in business annually. As ESA grew, however, she had little interest in harnessing the power of technology or enabling others to do so.

Unfortunately, the woman became ill, but continued working when possible. When she could no longer come into the office, in her desk Dean found more than $100,000 in receivables that had never been deposited. “That’s the kind of trap you lay for yourself, if you let family members do things you wouldn’t let other employees do,” says Dean.

“If a person’s primary qualification for the job is being the wife, or son, or daughter of an owner—rather than having technical competence—then expect to be disappointed,” he continues. “If you want a really well-run company, you can’t depend on inadequate qualifications to carry you through.”

Of his daughter Caitlin, for example, who works as a customer service and business development representative for ESA, Dean notes, “She’s one of the most personable people we have on the phone and also has the skill set to handle our marketing, community outreach, and social media programs.”

Act like a boss. Have the strength to separate family and work. Rampey, for example, fights the natural temptation to “mother” her son while they are at work.

“Sometimes, you just have to sit back and watch them make mistakes,” she says. Although her son usually calls her mom in the office, Rampey notes, “professionally we stay away from the parent role, because I want to be respectful of the image we portray to the public and to our employees.”

For that reason, the Rampey family also supports one another publicly, keeping any dissension behind closed doors. Rampey reports, “We’ve had management disagreements among the three of us, but never have any of our employees seen that.”

At times, being the boss may mean terminating a family member. Sedine had to make that tough call more than a decade ago, and the family member still hasn’t forgiven him.

“Although I outlined the work expectations, the family member clearly had a sense of entitlement,” Sedine says. “The person took a lot of smoke breaks, made a lot of mistakes, and had a negative attitude, so I had to deal with it.”

Don’t play favorites. Years ago, ESA implemented a performance review policy for its employees. Problem was, Dean’s former partner allowed certain people to opt out, weakening the review process throughout the entire company.

“Don’t believe that other employees won’t notice if some people are treated differently, are ‘bullet-proof,’ because they are family members. It’s foolish to deceive yourself, because everyone knows when favoritism is going on,” Dean emphasizes. For example, when he believed his daughter was doing too much personal texting while on the job, he addressed the issue directly, just as he does with other employees.

Draw the line. The distinction between business and family easily becomes blurred, especially when you live in the same house. The Rampeys, who have worked together for 30 years of their 40-year marriage, enforce one rule: No talking business at Thanksgiving (or any other holiday) dinner.

Sedine’s family has the same rule, one he usually extends to workday lunches with his two children—unless a situation arises at the office that requires them to problem-solve over lunch.

Make time for family fun. Now and then, advises Sedine, “Set aside time to do activities together, such as a family reunion or vacation— and make sure everybody signs their name in blood that they won’t talk about business!” Although scheduling the time often proves difficult, he acknowledges, a relaxing getaway can help re-establish a healthy working environment when everyone returns to the office.

Appreciate the opportunity. Sedine feels fortunate that his children not only understand what he does for a living, but also share in making the business a success.

Narissa Rampey concurs, saying, “It’s very rewarding to collaborate and build something together—and to help one another with the struggles you encounter daily, sometimes hourly. Another joy is leaving a legacy for our children and grandchildren, even if they don’t come into the business.”

Rampey’s son, whom she used to warn away from the business, will eventually run Air Assurance after all. Whether it’s due to good fortune, luck, hard work, or a combination of all three, Mike Rampey’s fears of the negative family dynamics he witnessed elsewhere have never come to fruition in his own company.

---

Posted In: ACCA Now, Management