Sixteen years ago, I was named CEO of Penn Ventilator Company, an $80 million business that had been started in Philadelphia in 1928 by my grandfather and his brothers. Since the 1960s, it had been paying dividends to my extended family, but by the time I became president, our manufacturing costs had spiraled, our once-broad product line was narrow and we were losing money. After my promotion, I remember watching the movie Titanic with my daughters. As I viewed the scene with the captain gripping the wheel while the windows came crashing in, I vowed I was not going to let the business go down on my watch.
Over time, we reduced our losses, but we had tough competition, lots of debt and a weak management team. There was tension between the second generation—including my father—and me, over changes I thought we needed to make. I didn’t have the confidence to quit or the backing to make them. As a minority shareholder, I had little incentive to push for a sale, and besides, it had been a long time since I’d done anything else, and I doubted my ability to be successful starting over. I believed my chances of becoming a writer—a dream I’d nurtured since I was a little kid—were nonexistent.
There are the familiar clichés about family business. The first generation sacrifices for their children. The second generation works hard to prove themselves and deliver the vision of the entrepreneurial parent. By the third generation, there’s either a high-functioning, performance-based culture or a company that’s rotting. Rags to riches to rags, goes the old saw. Once in a while, you imagine overhearing someone refer to you as the idiot son.
By any standards, my generation was well off. We all got to go to college if we wanted. None of us paid for gasoline or long-distance telephone calls. We could pick up pocket money any time we wanted by working in the office. As adults, we depended on dividends for down payments and nice vacations. I made a decent salary, but once the dividends stopped, I was just another Joe in a job I couldn’t stand.
In the fall of 1997, the bank called our line of credit and insisted we hire a turnaround firm. The same month, my wife and I separated and I had an epiphany, which looked frighteningly like a breakdown. I replaced advisers who counseled us to throw in the towel with new ones who recommended calling the bank’s bluff. We found a strategic buyer—someone willing to pay more for our assets than we owed. And I enrolled in a part-time master’s degree program in creative writing.
After the sale, I became director of Temple University’s Family Business Alliance and started coaching CEOs, many in family businesses. I worked nights and weekends on my novel. Last fall, I found a literary agent who sold my manuscript for a nice advance, which allowed me to complete my transition. Backward-Facing Man (Ecco/HarperCollins) is a tale of criminal activity and betrayal in a second-generation family business. The plot features unrequited love, politics and characters who came of age in the Sixties. It was released this past September to critical acclaim. When I get the chance, I like to remind people that there can be life —a full and rewarding one—after the family business.
Don Silver (www.donsilver.net) is currently working on his second novel. He enjoys speaking to groups and, when his schedule permits, working with family businesses.