All you need is trust

(( L LL You NEeo is love." san-e the la.Beatles. But if the Fab Four had been family business owners, the lyric should rightly have been written, "All you need is trust." Family business members often profess their love for each other while withholding their trust. When they don't trust each other, they don't communicate and find it difficult to agree on a common direction. The result is a firm mired in toxic distrust, unable to discuss key issues, frozen in the face of crisis, and, all too often, sickly and short-lived.

A Tale of Mistrust. Brown-Wilbert Co. is an 8O-year-old Minnesota company that builds burial vaults. It's mostly owned by chief operating officer Christopher Brown, but controlled through voting shares by his father, c.e.o. Jerry Brown, who has worked at the firm since 1960 after marrying the granddaughter of the founder. The company has $20 million in revenues. a solid market position, and a wellestablished brand name. It's also got a major problem with mistrust among the owners and top executives.

The father-and-son executives have sued one another for a combined total of several million dollars, each claiming that the other has misappropriated company funds for personal use or for investment in other ventures. The two swap charges of self-serving behavior, incompetence, malfeasance, inattention to duty, and other failings in court as well as in the local media.

Will the company survive this battle? So far, Brown-Wilbert is bearing up. But similar struggles have destroyed countless other family firms. At the least, the mistrust has blocked communication, hindered cooperation, drained management attention, and consumed financial resources that would be better devoted to strengthening the company.

For my purposes, however, the Brown-Wilbert case is a good one. It neatly demonstrates the risks and costs of mistrust developing in a family business, as well as most of the available varieties of mistrust and their most common sources.

Kinds of Trust. Several varieties of trust are relevant to family business. First is trust in the competency of family business members. Other members have to be able to trust that their peers are trained, experienced and capable of discharging the responsibilities entrusted to them. That is a basic kind of trust, similar to the trust all business leaders must feel in the people who work for and with them.

Ethical trust is another essential. It's vital that family business members can be counted on to behave ethically. This doesn't mean merely following the letter of the law. It means following the spirit of the law and the principles behind the corporate code of ethics. In a family business, ethical trust also means trusting family members to put the interests of the family and the firm ahead of their own.

When people have faith in one another's reliability, that's a different kind of trust. You can have the skills and ethics, but if you can't be counted on to show up, you won't win trust.

Communication is the heart of trust. You can't trust someone when you don't know what he or she is thinking. Family members must be able to trust that they can talk about their concerns and be heard, and that others will talk about theirs in a similar manner.

Trust in outsiders is uniquely relevant to family business. Family firms that can't absorb people, practices and ideas from the outside will not live long. It requires trust in foreign concepts and people for that to happen.

Building Trust. Building trust starts with communication. Family members must discuss candidly but tactfully their thoughts, feelings and even dreams. Of course, communication is more than talking. It's also listening. It's hard to trust someone to look after your concerns when that someone doesn't appear to be listening to you when you express those concerns. So encouraging and institutionalizing talking and listening are key to building trust. Family meetings are the most visible tool for building communication, although there are others.

Talking the talk builds an element of trust, but walking it builds more. That's why trust-builders must welcome genuine, meaningful participation by those with whom they want to share trust. Family members should be asked and encouraged to join in making significant decisions, even if just by gathering information or injecting an opinion.

There are some things you should not do when trying to build trust. One is to trust blindly. It's a mistake to believe that someone should naturally be trusted because he or she is a member of the family, without any proof that the person is, indeed, trustworthy. Likewise, don't continue to trust someone who clearly, repeatedly fails to warrant it. In addition to setting the enterprise up for betrayal, bestowing blind trust on the undeserving tells other family members that it's not necessary to work hard to develop trust based on competency, reliability, communication, ethical behavior, and openness to outsiders' efforts.

On the flip side, don't be too suspicious. When you monitor everything a family member does, you create an atmosphere of mistrust. Granting trust is a loose-tight proposition. Like holding a wet bar of soap, gripping too loosely allows it to fall, while gripping too tightly causes it to slip away.

Limits of Trust. Trust isn't a cureall and does have its risks. Trusting others doesn't guarantee that they won't disappoint you. And trust won't overcome other management failings, weak markets, poor strategies, or just plain bad luck. But it does help. Without it, even superior management, markets, strategies and luck may come to nothing. From the perspective of family businesses, Elvis Presley may have come closer than the Beatles to the truth when he sang, "We can't build our future on suspicious minds."

- James Olan Hutcheson is managing partner and founder of ReGeneration Partners, a Dallas-based family business consulting firm. Reached him at (800) 406I I l2 or www.regeneration-partners.com.

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Elaina Jackson has been promoted to president and c.e.o. of Pacific Wood Preserving, Bakersfield, Ca., succeeding her late husband, Dick Jackson. Ken Laughlin was named executive v.p.

Bob Bretz, lumber sales, Yakama Forest Products, White Swan, Wa., retired April 30 after 38 years in the industry, the last three with Yakama.

Greg Moss, ex-Moss Lumber, has joined the sales team at The Mill Yard. Arcata. Ca.

Rick Ingram has retired after 40 years in the industry, the last six in sales at Mary's River Lumber, Corvallis, Or.

Kevin Dodds, Joe La Berge, and Grant Philtips, all ex-Buckeye Pacific, have joined Collins Cos., Portland, Or., focusing on green DF and panel sales.

Don Lampert, ex-North Pacific, is new to panel sales at Buckeye Pacific. Portland. Or.

Brett Bleichrodt, ex-Bluelinx, has joined Weyerhaeuser, Denver, Co., as a dealer sales rep.

Jeff Logue has been promoted to division mgr. for Capital Lumber, Healdsburg, Ca., succeeding Jeff Howard, who has retired after 19 years with the company. Asa Johnson was promoted to division mgr. in Denver, Co., succeeding Steve Myrick, who retired after 22 years with Capital.

Mark Jackson, ex-Bridgewell, is a new trader at Idaho Pacific Lumber Co.. Vancouver. Wa.

Jon Kimber, ex-Capital, is new to the sales and distribution division at Snavely Forest Products, Denver, Co.

Rob Robinette, ex-Lumber Products, has been named product mgr. for McKillican International, Sherwood. Or.

Kevin Pratt has been named sales mgr. of inland products for Konecny Brothers Lumber, Ogden, Ut., and will assist in exclusive sales for Goshen Forest Products, Eugene, Or.

Jim Shaffer has rejoined Franklin Building Supply, Boise,Id., as window mgr.

Dan Scherber, ex-BASF, has rejoined Orepac Building Products, Tacoma, Was., as senior certified Tyvek specialist.

Cherie Moorhead joined Nature's Composites, Torrington, Wy., as area sales mgr. for Northern California and northern Nevada.

Shawn Overholtzer, ex-California TrusFrame, is a new truss specialist for Simpson Strong-Tie, Stockton, Ca.

Jaeson Fikse is new to door & window sales at Ganahl Lumber, Buena Park, Ca.

David Bayles, c.e.o./president, Inland Builders Supply/Ace Hardware, Blythe, Ca., and Brennen Jeffers, general mgr., Sun Valley Do It Best Hardware, Deming, N.M., were honored as Young Retailers of the Year by the North American Retail Hardware Association.

T.J. Rosengarth, Northwest Hardwoods, Tacoma, Wa., was elected a director of the Hardwood Manufacturers Associatiorr.

Winsom Cash has resigned from Mungus-Fungus Forest Products, Climax, Nv., after striking it big in the state lottery, report Hugh Mungus and Freddy Fungus.

During our 63 years in the redwood business, Big Creek has developed a reputation fior being a reliable supplier of high quality lumber. We produce a wide range of grades and dimensions, custom cut timbers, pattern stock and fencing. Order full, mixed or paftial truckloads.

Capital Helps Tru-Dry Return

Mothballed since 2010, eight HeatWave Radio Frequency Vacuum Kilns are once again producing TruDry timbers.

Capital Lumber, Phoenix, Az., has entered into an agreement with Craftmark Inc., McMinnville, Or., to exclusively manage the inventory and act as sales agents for Tru-Dry timbers. The brand was previously manufactured by Forest Grove Lumber, McMinnville.

"We have been working for a while to obtain this technology," said Denny Elmer, president of Craftmark. "With the technical oversight of one of the original operators of the RFV kilns and the sales acumen of the original salespeople who are now with Capital, we will be well prepared to bring Tru-Dry back to market."

Jim McCluskey, manager of Capital's operations in Portland, Or., noted, "This is a great opportunity for Capital and a perfect pairing of resources. The Tru-Dry brand is well known, and there has been a noticeable void in the timber business without it."

Gene Secco and Ryan Williams, formerly with Forest Grove Lumber, have joined Capital in Portland to handle the inventory management and sales of Tru-Dry.

OSH Opens #4 in Fresno

Orchard Supply Hardware, San Jose, Ca., held an April 14 grand opening for its new store in Fresno, Ca.-the chain's 88th store and its fourth in Fresno.

According to manager Mike Ellis, the 50,000-sq. ft. store has a 7,700-sq. ft. garden center and features a newly designed store format with an easy-to-navigate layout and a new customer service center called Workbench.

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Parley '6Bill" Cherry, 86, retired founder of former Colorado Forest Industries, Denver, Co., died March l7 in Denver.

During World War II, he served with the Army Air Corp. as an air cadet. Afterwards, he attended the University of Idaho and graduated with a degree in forestry.

In 1983, he and his son Dan started CedarWest Corp., Lakewood, Co. Six years later, they moved to a new building in Denver and changed the name of the company to Colorado Forest Industries.

Mr. Cherry retired in 1999, and the company was sold to J.M. Thomas Forest Products in 2009.

Harry Barth t'Barttt Palmer, 86, former general manager of Edward Hines Lumber, Lafayette, Co., died Dec. l6 in Broomfield, Co.

After serving with the Navy during World War II. he attended Colorado State University and graduated with degrees in industrial forestry and general education.

In 1975, he joined Edward Hines, serving as general manager for the next l2 years.

George S. Yates, 86, former vice president of Denver Lumber, Denver, Co., died March 3 in Denver.

Mr. Yates joined the family business in 1952.In 1995, he was named Lumberman of the Year by Mountain States Lumber & Buildins Material Association.

Max C. Hittle, 83, longtime Colorado lumberman, died March 14 in Westminster, Co.

Mr. Hittle had a 30-year career in the lumber industry, working for such companies as Lumber Yard Supply, Gene Wright/Dependable Lumber Co., Rounds & Porter Co., Slaughter Brothers Lumber, and Reid & Wright.

Scarborough Home Centers, Scotts Valley, Ca., is opening a 4,200-sq. ft. Ace Hardware this summer in carmel, ca.

Orchard Supply Hardware has backed out of plans to open a store in Tamalpais Valley, Ca.

Mitchell Hardware is opening a third,7,000-sq. ft. Ace Hardware & Paint in Bend, Or. The chain also operates three stores in Washington.

Mayson Ace Hardw?ro has moved to a new location in Fresno, Ca.

Home Depot opened a new 106,000-sq. ft. store with 35,000-sq. ft. garden center April 26 in Lodi, Ca. (Jessica Larsen, store mgr.).

Depot will relocate its oldest Western region store-a 27 -year-old unit in Fullerton, Ca.-on Aug. 30.

Lowe's relocated its Sparks, Nv., home center to a new 103,000-sq. ft. facility in E. Sparks and opened new locations Feb. 2 in Fairfield (Suzanne Mooers, store mgr.) and Mid-City Los Angeles, Ca.

Habitat for Humanity neto a grand opening April 22 for its new ReStore discount home center in SimiValley, Ca., and by June will move its Roseville, Ca., store to a larger, 30,000-sq. ft. space.

Pacific Coast Buys Pioneer Builders

Pacific Coast Supply, Rancho Cordova, Ca., has acquired six-unit Pioneer Builders Supply, Tacoma, Wa.

In business since 1960, Pioneer distributes roofing from locations in Tacoma, Bremerton. Tumwater. Kent. Seattle. and Bellevue, Wa.

One of several divisions of Pacific Coast Building Products, Pacific Coast Supply also operates yards under the banners Anderson Lumber, Diamond Pacific, P.C. Wholesale, and Weyrick Pacific.

Ex- Sawmill Worker Pleads Guilty

A former worker at Stimson Lumber, Portland, Or., has pleaded guilty to aiding the transportation of stolen lumber.

According to court records, Trevor Mokry was responsible for loading and unloading trucks at Stimson's mill in Plummer, Id. He admitted entering into an unauthorized "mill direct" sales arrangement with Pallet Place, Spokane, Wa., which paid him $581,000 for the stolen lumber between June 2007 and June 201l. Mokry loaded Pallet's truck and received a check from the driver.

The charge is punishable by up to l0 years in prison, a maximum fine of $250,000, and up to three years of supervised release. Sentencing is set for July 16.

Meyer Moulding & Millwork, Modesto, Ca., has temporarily discontinued production, but continues selling from inventory.

Owner Jeff Meyer hopes to restart operations if new financing can be found.

Gompass Lumber Products, Cotati, Ca., is winding down operations after 34 years.

Bow Hill Mill, aunington, Wa., has resumed operations at its cedar mill.

Emerald Forest Products, Emmett, td., hopes to restart its sawmill May 15 and ramp up to full capacity within four months. The faciity has been idled since April 2011.

Sunset Moulding Co., Live Oak, Ca., has installed a new moulding and finishing line at its plant in ldabel, Ok.

CertainTeed's roofing plant in Portland, Or., has achieved lS0 14001 certification.

Amber Flooring, Emeryville, Ca., is now dishibutor of Coswick Hardwo6d's sotid and engineered flooiring in Northern California.

Dunn-Edwards' new 336,000-sq. ft. paint manufacturing plant in Phoenix, Az., received a real estate & development award as best industrial project from Arizona Commercial Real Esfafe.

National Nail Corp., Grand Rapids, Mi., launched a new website-stingerworld.com-to promote its Stinger cap systems.

Anniversaries: Straight Line Transport, Huntington Beach, Ca., 10th.

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