The days have passed when the founders of businesses and the children who inherit those businesses were almost all men. Today, more family businesses are being passed on to daughters, who must navigate traditional succession issues and contemporary business issues — challenges arising from increased globalization, regulation and technical change.
“We are seeing things moving at a nine times rate of change,” says Greg McCann, director of the Family Enterprise Center at Stetson University. “Most founders are aware of it and feel it, but not everyone has thought about what it means.”
The next generation of business leaders has to think differently while holding on to the practices that made the company successful.
One challenging trend: Older generations are staying longer in family businesses, sometimes leaving employees unclear about who is in charge. “Succession probably needs to be rethought,” McCann says. “Instead of passing the torch, family members will need to figure out the best role for everyone.”
With these new dynamics, communication among family members becomes increasingly important, says Adi Rappoport, a Gunster shareholder in West Palm Beach who specializes in estate planning and corporate law. Fathers need to talk to their daughters about their hopes, desires, fears and concerns for the business and how long they want to remain involved in the company.
Rappoport says founders often are concerned about transferring their business to children who may have different motivations. “Rather than creating wealth, the next generation needs to sustain it,” he says. Parents worry about how to transfer the “fire in the gut” and other motivators that made them successful, he says.
One advantage the younger generation enjoys is the presence of more resources for family businesses. Accountants, lawyers, strategic advisers, consultants, university professors and bankers can offer guidance. Rappoport believes women leaders tend to be more willing to ask for help with transition and more collaborative, both traits that will help them steer a family business. Following are six profiles of family businesses which daughters have taken over from fathers.
Arroyo Process Equipment Clearwater
Differing Approaches
Diane Schleicher’s clashes with her father led her to leave the company at one point.
For Diane Schleicher, taking over the company her father, Frank Arroyo, founded in 1968 has been far from smooth. At one point she clashed with her father so much that she left the family business for eight months. But now, with her 89-yearold father ill with Alzheimer’s, Schleicher confidently leads Arroyo Process Equipment with her own style and vision.
As the second-generation leader, Schleicher considers how her decisions affect continuity at the company, which distributes and services industrial supplies such as pumps, mixers and other equipment used in manufacturing.
Schleicher joined the family business at 21. She started by answering phones and helping to automate systems, discovering she excelled in using computers.
Her father is Cuban, old school and never envisioned her as his successor, she says. Instead, he had that role picked out for his son, who is 11 years older and already had been in the business when his sister joined.
In 1994, when Arroyo acquired a machine shop in Mulberry, Arroyo put his daughter in charge of it. Seven years later when he merged the machine shop into his core company Arroyo Process Equipment, Schleicher became president and began to have differences in direction with her father. He believed in “dad knows best, which is where our friction came from” she says. “The daughter/dad dynamics can be hard. It took my father time to understand I was not the rebellious 16-year-old girl I had been in high school.” By 2004, their differences had become so intense that Schleicher left.
Shortly after her departure, the business began to falter. Her father sold off the machine shop division and began entertaining offers to buy the entire company. “I saw he was being taken advantage of and told him we could work our differences out. I came back and it was the best decision for both of us.”
Eight years after she returned, Arroyo had a stroke and could no longer work, but by then Schleicher was already running the company as CEO. She says her brother made it clear he wanted a 9-to-5 job, not a leadership role. “I didn’t go to college, so everything I learned was from my father, she says. “What he taught me most is to be persistent.”
Schleicher says today she runs the business, a $16-million company , Using both the wisdom her father passed on and a more strategic approach. She plans to keep a Jacksonville facility but integrate the company’s Clearwater operations into its 14,000-sq.-ft. Bartow facility, putting the savings into personnel rather than bricks and mortar. “It makes good business sense. I wanted to do it for 10 years, but my dad didn’t want to because it’s where he built the business from. For me, emotional decisions are no longer barriers.” Her goal is to be a $25-million company, “At that point, I want pass the business to my son and have him take it to a $50-million company.”
Schleicher’s son Kurt, 19, studies at the University of South Florida. During breaks from school, he spends time learning the family business. Kurt says he is getting hands-on lessons from his mother in the way she did from her father. “She is teaching me how to make decisions and think about the causes and effects of them that at a lower level you don’t have to think about.”
Like other daughters who succeed their fathers, Schleicher keenly feels the weight of responsibility for the future of the business. Her mark, she says, will be great service and more diverse operations. “I see companies being bought by bigger conglomerates or run by venture capitalists. I want our footprint to be strong so we don’t have to go down that road.”
