Tips on keeping a family business going
Surviving across generations is daunting for a family business, especially the older the company gets. Meghan Juday is part of a fourth-generation survivor, Ideal Industries Inc., in Sycamore, Ill. In multiple roles, she has had to help mediate many sensitive matters in a company involving 50 family members and 1,500 employees. But perhaps the touchiest task was helping choreograph her father's retirement.
Surviving across generations is daunting for a family business, especially the older the company gets.
Meghan Juday is part of a fourth-generation survivor, Ideal Industries Inc., in Sycamore, Ill. In multiple roles, she has had to help mediate many sensitive matters in a company involving 50 family members and 1,500 employees. But perhaps the touchiest task was helping choreograph her father's retirement.
It ended up landing her a job - outside the family business.
Juday was appointed in April as director of the Initiative for Family Business and Entrepreneurship at St. Joseph's University.
"The reality is that in this [family business] space, that background is more important than the background to run a business per se," said the man who recruited her, Joseph DiAngelo, dean of the business school St. Joe's and a product of a family retail business since sold. "Most family businesses don't have a problem in running a business, they have a problem of managing the family."
Helping the region's family businesses maneuver through that tricky territory was the idea behind the Initiative for Family Business and Entrepreneurship's creation about 21/2 years ago.
Juday, 43, an Illinois native who moved to Philadelphia 19 years ago, was drawn to the leadership post at St. Joe's to help fill a void she noticed in the region's resources for family businesses.
"There's a lot of business help, but few resources for family businesses," she said, noting the sizable need nationwide: 80 percent of U.S. businesses are family-owned.
She also noted sobering statistics: Only 30 percent make it to second-generation ownership; 12 percent to third; and just 3 percent to fourth.
Family businesses have unique challenges, including familial conflict and members with a strong sense of entitlement, underscoring the need for support and educational networks such as what Juday is trying to create at St. Joe's, she said. Last month, the St. Joe's Initiative hosted a seminar on succession transition in family businesses.
"You can't talk to anyone about your family business, unless to another who has gone through it," Juday said. "When you talk with other family businesses, you realize you're not alone."
Retirement of a company leader is an especially difficult issue, largely because that person might be stepping away from the business but is still in the family, Juday said. Yet for "keeping relevant in a fast-paced world," succession is vital, she said.
Critical to any succession plan is "ensuring the development of the person who is stepping down," Juday said. "The transitioning individual really needs to have set themselves up for success after retirement."
Her father, Dave, did just that. He retired from Ideal, a global products and technology manufacturer with a screwdriver handle plant in Pottstown, in February 2014 after 30 years as its chairman, a working executive position. Traditionally, a non-family member serves as CEO.
Dave Juday was six weeks shy of turning 70, which had been his retirement-age goal for years, he said. In the years leading up to it, "I had to really get serious about understanding in detail what I did, what I had to stop doing, and what I had to prepare others to do."
Then he had to prepare for what to do next. He bought a factory building in Wisconsin and turned it into a business incubator, and joined an economic development agency. A "compulsive woodworker," he also would have more time for his workshop.
"You end up being so defined by your company for so many years, in some sense you're not sure you have an identity outside the business," Dave Juday said.
Before he retired, though, he took steps to ensure that the business was set up to succeed with a chairman "who understood our values and bought into the importance of family business" and understood "what it would take to succeed into the coming generations."
In his opinion, that person is his daughter Meghan, but not yet. His immediate successor, Jim James, who is also CEO, will help groom her, Dave Juday said. She currently is company director and chairs its family council and nominating and governance committee.
"Something I admire about my family is they recognize when they have gotten the company to the extent of their talents," Meghan Juday said.