- After graduating, Lauri Union took over her family’s failed corrugated roofing business in 1992.
- At 27 years old, president and CEO, she managed to turn the company around and sell it years later.
- Union shared five principles that she said helped her save the sinking business tied to her name.
I never intended to take over the family business. My grandfather started a corrugated roofing company in North Carolina in 1946, and in the 1990s it was run by my parents while I finished business school. My plan after graduation was to live in Boston with my husband.
But when my father fell ill, the company experienced serious financial difficulties. My mother, who had no experience in business leadership, intervened and tried to change the situation by asking me for help. The business seemed hopeless, but I wanted to help pay off my parents’ debts.
This meant that in 1992, at age 27, I became president and CEO of a sinking ship. Morale was low and we had just lost our biggest customer who contributed 25% of our revenue.
I had to reshape the company and managed to make it profitable by increasing the number of employees to 350 and selling to a private equity firm in 2004. Here are five lessons from running a family business that helped me get there.
Check your ego at the door and feel comfortable saying ‘I don’t know’
People often think that being a leader means knowing what to do. When I joined my family’s business, I earned prestigious academic degrees, including an MBA from Harvard. But I only worked there for six weeks one summer, so I knew very little about it. I’ve also never led any organization.
I quickly realized that the people working in the business had tremendous knowledge and that I could contribute much more by asking open-ended questions than by trying to take control and tell people what to do. I spent most of my first few months interviewing people at the company and finding out about the business.
As a result, within a few months, I had more knowledge about the business and the industry than virtually anyone else in the company. Although each person knew their role, I was the only one who interviewed so many people that I got a broad perspective of the company. I figured everyone would have their own slice of pie, but my goal was to see the whole pie.
Stay close to your family, but don’t let family emotions interfere with your decisions.
Working with family can bring up strong emotions, such as frustration when a parent tells you what to do in front of other employees you are trying to lead. Or a feeling of rejection when a parent doesn’t recognize what you consider a great achievement.
Families transmit emotions between members, so negative emotions can increase. These negative emotions can lead people to make decisions that make them feel better, rather than decisions that work better for the business. And these negative emotions can seriously harm family relationships.
Be aware of your emotions and empathize with your family, but be willing to make decisions that achieve shared goals, even if they are difficult. Spending time away from work with my mom also helped us stay close, even if we disagreed about something at work.
It’s easier to get employees to agree with your family’s values. Use this.
Family businesses have a superpower in their ability to consistently lead through a set of values that employees and customers can identify with. This makes the work of running the business meaningful for you and other stakeholders.
In my case, I noticed that longtime employees remembered what my grandfather’s company stood for and were disheartened by many of the company’s newer practices. The employees lied to the customers and everyone behaved as if they were on a losing team.
When I met one of the company’s retired former workers, he remembered how my grandfather insisted on not raising roofing prices after Hurricane Hazel in 1954. That story resonated with me, so I shared it at a company meeting.
Other employees stood up and told similar stories. At the end of the meeting, we agreed that no matter what happened, we would always do the right thing, even if it meant lower profits. We would never lie to a client and would always admit it if we couldn’t deliver what the client wanted.
This was a turning point for the company. Our employees felt they could be their authentic selves, and this guided the company’s advancement and contributed to our growth.
Don’t be afraid to take the business in a different direction than your parents did
Family businesses can be slow to change because it is valuable to maintain traditions or long-term relationships with employees and customers. Parents who lead a family business can expect their children to join in and follow in their footsteps.
But the average business today only lasts about 10 years. Families trying to get the next generation to follow the mold are at risk. The next generation may not be fully engaged and the company may not be able to keep up with the times.
My advice is to find your own shoes and take the business forward.
In my case, what was obvious about my family’s company was that it was not a very good business and was poorly positioned in a declining market. Our customer base was shrinking, our equipment was old, and employees hadn’t received raises in five years. We had six facilities in several states, most of which were filled with old products.
When I took over, we decided to completely change the company model. Instead of delivering in bulk to many customers over a large area, we focus on a small area of customers and deliver smaller shipments quickly. Eventually we had enough money to buy a new machine and we built on that success from there.
Don’t try to follow someone else’s leadership style.
In family businesses, leaders can shape their own leadership style. Understand how other people have led the business in the past, but don’t limit yourself to that.
I was a young woman who ran a male-dominated building materials company. All business leaders, not just positions like CEO, were men. The approaches of many managers were more authoritarian, with harsh language and aggressive postures.
I wasn’t comfortable with it, but it was my family’s business, so I could experiment with different ways of leading. I tried to be calmer and more curious.
Finding my own leadership style, rather than trying to match someone else’s, has made me a more effective and genuine leader.
