Family-owned staffing companies face many challenges not the least of which is involving (or not involving) children in the business.

I"m 55 now, and have personally lived this issue in both directions and have been close to or heard about many families around the country who have lived through it as well.

You can read about one such story in epic form.  It regards Manpower and is written by the son of one of its founders. chronicles both the company and his life inside up until its sale in 1976. 

Although my own father was not a big fan of the author, I find the book to be a great read and admire how the author spent many years travelling the world to setup franchise relations.  It’s hard not to see that effort as a big growth factor for Manpower.

At the end he tells the story of how Manpower was sold to Parker Pen in 1976 for $24 million, a tiny fraction of its value.   He avoids telling why the sale took place at such a cheap price, but I’ve heard from older staffing clients of mine in Milwaukee that it was done precisely to keep the company out of the hands of the author.

The story goes that Elmer Winter who founded the company along with the author’s father, Aaron, maintained a sustained hatred for the other founders son and did whatever he could including the cheap sale to deny the son control of the company.

This may sound sordid but other than the fact that it involved one of the industry’s biggest companies it is not unusual.  Getting family right in business is just plain hard.

Perhaps the hardest part of passing control to progeny is exactly that, passing control.   Helicopter parenting damages offspring in school, and it can damage them in business as well.   This is easier to say than do, but one path is to let the child establish him or herself independently.   They can for example start and run with P&L control a full business segment.

We have a client Florida doing just that.   Theirs is a national staffing business, and one of the children is running a highly successful time clock business alongside the staffing entity.

When my son David formed our relationship with them, he established a natural bond with this second generation.   Like my oldest two, this family’s kids established a track record on their own with one being an attorney and yet another a techie.

In contrast, another company we"ve dealt with is in the Rust Belt and is the paragon of what can go wrong.  The father, a highly successful businessman himself and in my eyes a guy with otherwise great family values, made the mistake of giving the children big titles without them having proven themselves as revenue generators in their own right.  

With merely administrative roles, the boys oversaw a toxic environment in which other employees felt the glass ceiling.  It’s no surprise this once major regional has suffered..

What do you think makes a good family enterprise?  Do you have a good example?  A bad one?

Tags: TempWorks Blog