By Bridget McCrea
Exploring the highs and lows of working in a family-run business.
Running a family business isn’t always easy, particularly when there are multiple generations of leadership and ownership at play. According to the Family Business Institute, 88% of current family business owners believe their families will control the business in five years, yet actual succession statistics undermine this belief. Just 30% of family businesses survive into the second generation, 12% are still viable into the third generation, and only about 3% of all family businesses operate into the fourth generation or beyond.1
In the precast concrete industry, many companies have bucked this trend and are now being led by the third, fourth or even fifth generation. Pink Precast proudly falls into this category. Founded in the height of the depression by Christopher John Pink, the 86-year-old company is currently in the capable hands of the fourth generation, brothers Wade and Dan Pink.
Based in London, Ontario, and with a U.S. office in Kimball, Mich., Pink Precast grew slowly over time, adding new product lines like septic tanks and agricultural precast products along the way. Wade and Dan took over ownership in 2009 – right in the throes of another national recession – and one of their first tasks was to change some of the strategies that the company had been operating on for decades. An early change was the use of vacation days.
“The old school mentality was that you took vacation when you had the time for it, but the new generation of employees doesn’t play by those rules,” Wade said. “We realized that our employees could use a little more time off, so we instituted some flexible policies around vacation time.”
In a similar vein, the company began allowing some of its employees to work shifts such as 7 a.m. to 3 p.m., or 9 a.m. to 6 p.m., rather than a standard 8 a.m. to 5 p.m. shift. The goal is to help accommodate employees’ family and personal lives.
Another change involved the recognition of long-term employees on milestones like 10-year and 20-year work anniversaries.
“We recently had someone celebrate his 40th year with (the company),” said Wade, who adds that the recognition and flex time have both gone over well with employees.
As with any closely held business, there are both highs and lows of working with loved ones. On the positive side, Wade said the firm oozes “family feel,” and treats all employees as kinfolk. In fact, he said the company has spawned a second group of relatives that aren’t directly related to the Pinks. To cultivate that family-like unit, the company holds barbecues, annual golf tournaments and other events for its staff, many of whom are long-term employees.
“There are people working here whom I’ve known for my entire life,” Wade said.
When it comes to challenges, Pink said it can be a tough pill to swallow for family members – or for the 30-year employee who has worked there since he was 18 – when a new person is suddenly your boss.
“Having those difficult conversations can be harder than usual, particularly if you have to have those talks with someone you’ve known all your life,” Wade said.
The next 80 years
Columbia Machine was founded in 1937 and is currently a third-generation family business. Rick Goode serves as CEO of the Vancouver, Wash.-based company, Tim Goode is sales and marketing manager and Taylor Goode handles the firm’s marketing efforts. The three are brothers. According to Tim, one of the high points of working for a family-owned business is the great sense of pride of ownership associated with the experience. Incentivized to help make the business as successful as possible, family members pour much of their time and energy into the effort, knowing that it’s much more than just another job.
“You’re definitely invested in everything, from the small decisions all the way up to the big ones,” Tim said. “That definitely plays a key part in how driven you are and how motivated you are to ensure success – and whether it’s minor product development or the acquisition of another company.”
Although the company has been in existence for 80 years, the Goode family is more concerned about the next 80 years and maintains its strong roots while always looking for ways to work smarter, better and faster in the future.
“It’s all about forward thinking and investing heavily in the future,” Tim said. “We keep a constant eye on growth and figuring out how to effectively diversify and be in the markets where the growth potential is highest.”
On the flip side, Goode said running a family-owned manufacturing firm presents an interesting set of challenges. For example, the Great Recession created an especially difficult environment for the company, forcing it to cut back in various areas.
“We have plaques on our walls for employees who have been here for 45-plus years,” he said. “Going through hard economic times and having to let people go – some of them being third-generation employees from the same families – was extremely difficult.”
Heavily invested in taking care of its employees and customers, Columbia Machine had to balance those worker-related difficulties while maintaining its quality and customer service standards.
“We do what we can to satisfy both groups and keep everyone happy, but it’s not always easy,” Tim said.
Always on the lookout for new opportunities, Columbia Machine continues to invest in growth and diversification.
With a strong family foundation and a mix of long- and short-term staff members to support those efforts, the company is well positioned for its next 80 years.
“We’re always looking at that next established division that we can start, whether it’s a small segment within the precast market, or developing a new mixer or batching controls,” Tim said. “We want to be forward thinking; I think that’s something that has really helped us because we’re not dead set in one product line.”
Passing it down to the next generation
After working on-and-off for his family’s business since the 1980s, Tom Engelman officially took over as president of Bethlehem Precast in 1995. Engelman, whose father founded the company in 1974, has five siblings (none of whom work directly for Bethlehem Precast) and a third generation of family members gradually working their way into the business.
“My two sons work here, one of whom is our full-time QC manager and the other is a business major at Penn State Lehigh Valley,” said Engelman, who enjoys having a group of close relatives to fall back on when business is difficult. “When things aren’t going well, they will always come in and help.”
Because each of the six siblings has an equal stake in the business, juggling various opinions and requests can be challenging at times.
“There’s always some sibling rivalry because I’m the oldest,” said Engelman laughing. “I have to justify everything I do.”
To work through that challenge, the company holds board meetings every week to review the company’s status, future plans and new directions.
“Most of the time, as long as I explain myself pretty well, they understand and they usually go along with me,” Engelman said. “I haven’t ever really been shot down totally, but we do have our loud meetings sometimes.”
This year, Engelman and his team are working to set up a new company to handle Bethlehem Precast’s prestress division. The goal is to create the company and eventually transfer it to the third generation. It will be a new company with no assets and no equity, said Engelman, who likes the idea of starting with a clean slate for the next generation, which right now comprises 10 children.
“When my dad passed away 10 years ago he wanted to pass this entity on and keep things going generationally,” Engelman said. “So, we’re going to try and set this new company up so the kids get some ownership in it and we can pass the company down to the next generation.”
Family-owned businesses often inspire passion among ownership and employees, and passion can sometimes spark conflict of differences in opinions. The businesses that survive the challenges are those with strong leadership and who are focused on precast success as well as future challenges and opportunities. They integrate family strategically and ensure everyone – family and staff – is on the same page. It’s rarely easy, but when done right, the rewards far exceed the challenges.
Bridget McCrea is a freelance writer who covers manufacturing, industry and technology. She is a winner of the Florida Magazine Association’s Gold Award for best trade-technical feature statewide.