Daughters Increasingly Taking Reins at Firms

By CYNDIA ZWAHLE

Jan. 20, 1999 12 AM PT

If the thought of working for your dad makes your palms sweat, imagine if he handed you control of his multimillion-dollar company just before the bottom dropped out of the economy.

For Marcia Huntley, 47, president of a steel pipe manufacturing company in Los Angeles and daughter of the now-retired owner, it turned into a nightmare of sleepless nights, agonizing layoffs and rebuffed attempts to resign.

It’s only been recently--more than a decade after she was named president of Tubular Specialties Manufacturing Inc.--that the self-described “extreme optimist” has gotten her “sea legs” back and begun to shape the 33-year-old company with her own goals in mind, she said.

Working for your parents in a family-owned business certainly has its advantages. Job security, for one. What parent wants to face the Fired One or the offspring’s angry spouse at the next family gathering?

For women in particular, a family-owned business represents a “tremendous opportunity” for advancement, said Craig E. Aronoff, director of the Family Enterprise Center at Kennesaw State University in Georgia.

Family businesses can offer support for women that they wouldn’t find elsewhere, Aronoff said. And daughters often have the additional advantage of getting along better with the boss, typically Dad, than do their brothers.

“You don’t have the competition between fathers and daughters that you have with fathers and sons,” said Aronoff, who has worked with family-owned businesses for 15 years and is executive editor of Family Business Advisor, a monthly newsletter.

The economy has a big stake in how well daughters run their family businesses. Family firms, which account for an estimated 75% of all U.S. companies, increasingly are headed by women. One-quarter of the 3,000 companies in the 1997 Arthur Andersen/MassMutual American Family Business Survey said the next CEO may be a woman. That would be a fivefold increase from the existing level of female CEOs at the survey companies.

“Today it’s incumbent on the patriarch of the family to find the brightest child, as opposed to the brightest son,” said James G. Ellis, the new director of the Family Business Program at USC.

Yet as more daughters are being handed the reins at family firms, they are finding unexpected hurdles.

Looking back, Huntley sees how she struggled with her lack of outside experience, with a hesitancy to make needed changes in her father’s organization and with her expectation that she should be just like her dad, Cliff.

The recession, which plunged the company into the red, was a painful teacher, but it fast-forwarded the personal and corporate changes necessary for the survival of the business, said Huntley, who in her early 20s graduated from UC Santa Barbara on a Friday with a degree in English literature and began work at her father’s company three days later.

Even after 14 years, when she was promoted to president at age 36, she didn’t feel ready. When the recession hit shortly afterward, she was overwhelmed.

“There were so many times I would wake up with a stomachache at 2 in the morning, pacing the floor wondering how we were going to make payroll,” Huntley said. She tried to resign many times, but her parents didn’t trust anyone else to run the business.

To keep the company alive, Huntley was forced to cut the 110-person work force in half, although it took her five rounds of layoffs to do so. She reluctantly dropped less-profitable product lines and made across-the-board cuts in salaries, including her own. Her father had always treated employees like family, and, despite his support, Huntley was torn up inside, feeling as if she was ruining her father’s creation.

Finally, in 1993 the company turned the corner and headed into the black.

“I was so profoundly shaken by what I’d gone through that I got into work every day and just kissed the ground, [thankful] that it was still there,” Huntley said.

From painful experience, her advice to second-generation women leaders in family firms: Get five years of outside work experience. And don’t expect to do everything your parent did. Bring in a high-level outside manager, if necessary.

Huntley accepts that she will never be the inventor her dad is, and she has handed over management of the technical side of the business--the factory--to a trusted vice president. But it took a professional assessment, in her case the Meyers-Briggs personality test, to convince her to let go and concentrate on her strengths in sales and marketing.

Perhaps most important, don’t be afraid of change, Huntley said. She held her father’s business accomplishments “almost in reverence,” and that made it hard for her to move fast enough when change was needed.

“You’d better change or you are going to be left at the side of the road,” Huntley said.

Does your family business have an innovative solution to succession planning? Tell us about it. Write to Family Business, Los Angeles Times, Business News, Times Mirror Square, Los Angeles, CA 90053. Or send e-mail to cyndia.zwahlen@latimes.com.

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