share leadership When siblings

/iu,qNces ARE

GooD lUrnat a lons-lived thmily business wlll eventually be led by a sibling team. But despite sharing common values, siblings face real obstacles when cast in the top leadership spot. sure. perceptlons ol i. '* parental favoritism and l-f i longstanding rivalries can make cooperation difficult. But the biggest challenge? Almost all second-generation sibling teams must somehow adapt a decision-making process dominated by a single autocratic leader into one that works for two or more people. The key is preparation.

So how do you prepare sibling teams capable of this challenge? When your children are young, define your expectations in written form and formalize procedures that all employees, family and nonfamily, are expected to follow. If you wait until your kids are ready to assume leadership roles to do this, it may engender conflict rather than prevent it.

Do it before they enter the business and all involved will know what's expected and have a chance to grow into their roles.

Necessary Paperwork

Documents you'll need to include a buy-sell shareholder agreement, an employment policy, compensation guidelines, and job descriptions to help all understand who will be hired, under what circumstances, how they'll be paid' and what their responsibilities will be.

As children grow, they should be introduced to the business so they can get to know employees, hear stories about the business's positive and negative aspects, and learn why you started and continue to run the business. Older children should be invited to take summer jobs.

Before joining the company full time, siblings should be required to obtain the necessary education and training to execute their responsibilities. This may include college or technical schools, and should include a period of time working at an outside company. where the family name carries no significance, before they join the family company.

'feam Concept from the Start

When siblings have joined the company but aren't yet in the toP leadership jobs, encourage them to work as a team by pairing them in jobs that require cooperation. Avoid putting them on tracks that have them following each other in the same job, or you risk encouraging unhealthy competition.

When siblings are sent out for training or seminars, have them attend together when possible. It will encourage a sense oftogetherness they can use to represent the family firm to outsiders.

You should also set up regular family meetings and organize a board of directors that includes outsiders. Prepare a process for breaking tie votes in the event the siblings can't agree on some future decision. Consider having an outsider or one of the siblings take a rotating role as the tiebreaker.

Once the siblings are in leadership roles, you as a parent should not act as a tiebreaker-it should be their responsibility.

The job of preparing siblings for sharing leadership of a family company is a challenging one. With luck, it will pay off during and after their successful run, when the next generation will be ready to take the reins.

- James Olan Hutcheson is managing partner and Jbunder oJ ReGeneration Partners, a Jamily business consulting headquartered in Dallas. Tx. He can be reached at (800) 406-l I l2 or wv)w .re 8e ne rat io n -pa rt ne r s.c o m.

Reprinted with permission of ReGeneration Partners. No portion oJ this article may be reproduced without its permission.

New Owners Move into Stimson's Bonner Mill Site

The old Stimson Lumber Co. mill complex in Bonner, Mt., is slowly coming back to life.

Last month, Stimson sold the propertywhich has been quiet since 2008-to Western Montana Development, which plans to lease portions of the operation to various timber industry-related companies.

Logs began arriving at the facility in mid-December to feed a chipping operation being readied by Willis Enterprises. Willis has contracted to ship its output via the site's rail spur to Boise's paper mill in Wallula, Wa.

Willis is leasing 39 acres-about one-fifth of the property. For several years, Northwest Paint has been renting 90,000 sq. ft. of anorher building. Western Montana Development is working with other possible tenants for the remaining 700,000 sq. ft. of building space.

Washington's Tri-County Truss Comes Back

Tri-County Truss, which until last August operated a facility on 8.5 acres at the Port of Skagit near Burlington, Wa., is back in business.

The business was acquired by The Truss Co., which operates two other facilities in Sumner, Wa., and Eugene, Or., in late October. Several members of the former management team, plus more than 30 of the 92 employees that were laid off, went back to work on Nov. I , under the Tri-County name.

"If we were back to where we were (in August) by next summer, I'd call that a success," said general manager Roger Helgeson.

PenPly Pulls the Plug on Former KPly Plywood Matl

Unable to meet a mid-December deadline to find new ownership, Peninsula Plywood has handed over the keys for its sawmill to landlord Port of Port Angeles, Wa., which expects to demolish the 70-year-old facility to make way for marine-related businesses.

The l9-acre mill site operated as KPly until November 20Oi and restarted in March 2010 as PenPlv. under Josh Renshaw. KPly's former sales manager.

Renshaw cited high operating and veneer costs, a May 2010 fire, and poor inventory control for the demise of the company that operated for 22 months, using the facility's original name from 1941.