The story sounds familiar. A charismatic company founder who keeps management details to himself dies suddenly, without a transition plan, leaving a widow and six children to pick up the pieces. End of story and, sometimes, end of company.
Such a sudden death occurred in 1994 at the Dwyer Group, a plumbing, appliance repair and home-improvement franchiser based in Waco, Texas. So what happened next?
• The founder was succeeded by his long-divorced ex-son-in-law.
• Then the ex-son-in-law voluntarily stepped down in favor of his ex-sister-in-law but remained with the company.
• The CEO is not the eldest child, but the third of six.
• The CEO’s husband works for the company in a capacity subordinate to his wife.
• None of the controlling siblings who work at the company has a college degree.
All this at a publicly traded corporation whose revenues for 2001 were $22.4 million. The Dwyer Group’s CEO is Dina Dwyer-Owens, 38, the third of six siblings. She presides over a staff that includes her husband, Mike Owens, 35, and her older sister, Debbie Wright-Hood, 40, in addition to younger brothers Doug Dwyer, 35, and Donald Dwyer Jr., 37, as well as her ex-brother-in-law and predecessor, Robert Tunmire, 43. Together they’ve turned around a company that was on the rocks four years after founder Don Dwyer died in 1994 at age 60.
Don may have been clueless about succession planning, but he seems to have left them something better: the tools to succeed at succession on their own.
Don Dwyer grew up in New York during the Depression and as a young man vowed never to live in poverty. He bought a paper route to pay for his college education. After a brief stint in the military and a successful but brief career as a Hollywood talent agent (his clients included Neil Diamond and the Smothers Brothers), Dwyer bought a franchise in the Success Motivation Institute (SMI), which markets and sells management and motivational materials. His enthusiasm for all kinds of franchising brought him to the franchiser’s home office in Waco, where he soon became senior vice president.
Eager to break out on his own, Dwyer ran a franchise for a carpet-cleaning company. That led him to form his own carpet-cleaning franchise business. To develop more business for his franchisees, in 1989 he bought control of the publicly traded Mr. Rooter (a plumbing franchiser). The company name was changed to the Dwyer Group in 1993. Today, Dwyer Group is a franchise holding company with six subsidiary franchiser corporations offering a variety of electrical, appliance and household repair services through more than 1,300 franchisees worldwide. Dwyer’s family holds approximately 60% of the stock.
Dwyer’s six children began working when most other kids were playing in the back yard. (In addition to the four who work in the company full-time, there’s Donna Dywer VanZant, 42, a real estate broker who manages the family’s properties on a part-time basis, and Doug’s twin brother, Darren, who earned an undergraduate degree from Baylor University at age 29 and is now weighing his career options.) Their workaholic father pushed his kids to join him at an early age.
“He never really gave us money; he gave us the opportunity to earn money,” says Doug, who began cleaning carpets for his father at age 15. Don closely monitored his children’s career progress. “If you didn’t have a plan, he’d have one for you,” Doug adds.
None of the Dwyer siblings who currently work in the business finished college. “Don always said he was sending them to ‘Dwyer University,’” says their mother, Theresa (Terry), 67, the chairperson of the Dwyer Group’s board of directors. Instead of paying tuition, Don paid his kids an extra allowance to study self-help books and motivational audiotapes.
“We were taught to be self-students,” says Dina, who attended Baylor University for two and a half years while working nearly full-time for the carpet-cleaning business. She says she became dissatisfied with school because “I wasn’t getting closer to my dreams—I didn’t even know what my dreams were.” During a visit with her father when she was about 20, he suggested she get her real estate license and join him and Donna in a management company for the family’s own properties that also operated as an outside sales organization. “I really enjoyed it, and I just absorbed whatever I could,” Dina says.
The siblings’ unconventional upbringing created a strong bond among them. Another factor was the distance between neighbors in Texas, where the family has lived since the early 1970s.
“I asked Don, ‘Who are they going to play with?’” recalls his widow, Terry. His response: “They’ll have each other.” That closeness persists to this day: All six siblings and their mother live within three miles of each other and get together frequently. And that closeness extends to Robert Tunmire, who has remarried since his 1982 divorce from Donna, whom he met in high school.
Tunmire had been working as a dishwasher in a restaurant when he first met Don Dwyer. He worked for Dwyer’s carpet-cleaning business in the summer of 1975 and went back to high school to start his junior year. But in October 1975 Tunmire quit school to open his own carpet-cleaning franchise.
“He was similar to my husband in ambition,” Terry recalls. “My husband was able to mold him. They had fun working together.”
Tunmire agrees with this assessment. Don Dwyer “helped me realize I could have anything I wanted, be anyone I wanted and do anything I wanted,” he says. “I never got that before—I was on my way into debt or to jail. I lived to just make some money and go out and party.”
Tunmire says he and Donna, who married when she was 16 and he was 17, “just grew in different directions.” Even after the split, the family “never showed me anything but absolute love,” Tunmire says. He remembers telling his then-father-in-law about the couple’s decision to divorce: “I sat down and told Don, ‘Here’s what’s happening.’ Not much was ever said beyond that.” Even when Tunmire started dating other women, “there was some awkwardness, but not much.” In the acknowledgments section of his 1993 book, Target Success, Don included Tunmire in a list of “my children.” Today Tunmire and his second wife have kids who are friends with all the Dwyer children. (He and Donna had no offspring.) “Terry, even to this day, treats my two sons as grandchildren,” Tunmire notes.
“I don’t see you for what you are,” Don Dwyer liked to tell his associates. “I see you for what you could be.” That philosophy helped him acquire a ranch, a collection of classic cars and a stable of Andalusian horses. But it also caused him to keep management details close to his vest and to conceal from his children one shadow over his life: his diabetes.
“Nobody needed to know if anything wasn’t perfect,” daughter Dina explains. Dwyer’s condition worsened in the summer of 1994 when he developed congestive heart failure after puncturing his lung in a motorcycle accident. In December of that year, during a family holiday in one of his favorite vacation spots—the Cayman Islands—he died of a heart attack.
Dwyer’s sudden death left his heirs scrambling to salvage his far-flung and complex operation. “It was a puzzle we had to put together,” says Donald Jr., the company’s director of international operations. “Each of us had a piece of the puzzle; we had to complete the picture that my father had in his head.” Throughout their lives, their father had directed their careers, moving each sibling into different positions as he saw fit. Without him, Donald Jr. says, “We had to figure out how to work as a team. Though we had always worked well together, it was even more crucial that we do so after his death.”
Adds younger brother Doug Dwyer, president of Dwyer Group’s DreamMaker Bath & Kitchen unit: “It probably took us four years to totally get on top of everything, because it was so big.”
In the last years of his life, Don had worked closely with Dina and had mentioned to several people that she’d make an appropriate successor, according to Terry. When he died, Dina was president of Dwyer Real Estate and had also spent four years developing a karate school franchise concept for the Dwyer Group. She had a four-year-old daughter and was four months pregnant with her second child. In any case, the Dwyer Group’s non-family directors—among them James L. Sirbasku, former president of SMI International, where Don Dwyer got his first taste of franchising—felt she wasn’t yet ready to take the top job. So the board appointed Robert Tunmire as CEO, with Dina’s concurrence. “I felt Robert was the right choice for the position at the time,” she recalls.
Tunmire recognizes he might not have been the ideal candidate. “Was I ready to take on what I stepped into?” he asks rhetorically. “No, I wasn’t. But nobody else was ready. I didn’t have a choice; there wasn’t much time to sit there and ponder it.”
His major headache was getting a handle on the company’s expansion. Two years before Don died, the Dwyer Group had acquired two new franchise companies and launched three others. With this expansion, his successors realized, the company needed a whole new infrastructure to handle accounting, legal matters, the 401(k) plan and expanded employee health insurance. But by 1998, with the infrastructure in place, the Dwyer Group faced the opposite problem: The company’s overhead was cutting into its profitability.
“Robert did the best with the resources he had,” Dina stresses. “There was so much cleanup that had to be done, and the company was moving so fast, that even just understanding everything that we had to deal with took a long time.” By selling two subsidiaries and cutting staff in the remaining units by 17%, the Dwyer Group reduced its general and administrative expenses by $1 million. But the company finished 1998 with earnings per share of just one cent.
Meanwhile, Robert Tunmire’s elevation to CEO had left a void in his former department, franchise recruitment. Franchise sales, which had been growing before Dwyer’s death, were falling four years later with Tunmire’s attentions focused elsewhere. Outside shareholders were clamoring for a change. At this point the board decided that Dina, a bubbly, outgoing woman who had been her high school’s head cheerleader, should lead the company. Tunmire’s style was intense; Dina was a consensus builder. She was named acting CEO—“so that they could monitor the changes and allow time for the shareholders to see that I could handle the job,” she says.
Robert Tunmire became the Dwyer Group’s executive vice president. The management change—essentially Tunmire’s demotion—was announced to the home office staff in December 1998 by Tunmire himself.
“There are very, very few people who could have handled it the way he did,” says Dina’s older sister Debbie Wright-Hood, who’s vice president of administration and corporate secretary. “He got in there and did what he needed to do.”
Dina says Tunmire supported her during the transition. “He said, ‘Dina, I’ll be here for whatever you need,’” she recalls. “I felt I was ready, yet it was a scary time that came with a lot of responsibility.”
As for Dina’s siblings, they say they never considered challenging her for the CEO slot. “I don’t want Dina’s job, and she doesn’t want my job,” says her older sister Debbie. “We’re in positions that utilize our strengths.” Debbie, known in the family as the sibling with the eye for detail, oversees the company’s finances and legal issues. Where Dina relishes traveling on the road and meeting with people, “I always enjoyed organizing things,” Debbie explains.
Donald Jr., the director of international operations, is methodical and mechanically oriented, says his brother Doug. Donald, with three young children, says he isn’t interested in the time commitment and travel burdens inherent in the chief’s responsibilities. “Because I have a very young family, I’m not willing to make those sacrifices,” he says.
Doug—who describes himself as outgoing, enthusiastic and focused—also has a CEO personality. But the timing wasn’t right for him, he recalls. Instead, he’s building his own company as president of Dwyer Group’s DreamMaker Bath & Kitchen unit. Under his direction, that subsidiary has evolved from a refinisher of bathtubs, tile, countertops and cabinets to a full-service remodeler.
Dina’s promotion leapfrogged her over not only her siblings but also her husband, Mike Owens, who’s vice president of operations for Dwyer’s Mr. Appliance unit. Mike joined Don Dwyer’s carpet-cleaning business in 1986, when he and Dina were dating; they married in 1990. When Dina became the CEO, they arranged the organizational chart so that Mike reports to the chief operating officer. “One of the decisions we made going into this is that I will never be his boss,” Dina says.
Dina took a further step toward averting potential conflicts by accepting lower compensation than several company executives, including Tunmire. “I do not have an issue with my key people making more” than she does, she says. “If they are, that essentially means the company’s really growing, since they are compensated for their performance. Therefore the stock is appreciating, and all shareholders—including me—are winning.” After the first quarter of 1999, Dina was named the company’s permanent president and CEO.
Wall Street apparently approves of the changes. From its meager one-cent earnings of 1998, the Dwyer Group reported earnings per share of 22 cents in 1999, 29 cents in 2000 and 33 cents in 2001. And Dina’s leadership skills have been acknowledged by her peers: Earlier this year she received the International Franchise Association’s Bonnie LeVine Award, the highest national award in the industry for women. Dina, says her admiring husband, Mike Owens, “has the leadership qualities that Don had—the people skills, the enthusiasm, the optimism, the positive outlook on life in general.”
The couple say they’ve set some ground rules to maintain a separation between their home and work life. Most weekends (especially Sundays) are known as “free days”—days when business talk is forbidden. If an issue comes up, Dina will tell the person who raised it, “Write it down, and we’ll talk about it tomorrow.”
She’s scrupulous about making time for daughter Dani, ten, and son Mikey, six. She often pulls them out of their private Catholic school to take them with her on long business trips, frequently accompanied by her husband, mother or mother-in-law. And one day a week, instead of scheduling a lunch meeting, Dina arranges to eat lunch with her kids at their school.
Dina’s siblings, who missed their father’s presence in the home when he was on the road or logging 14-hour days in the office, say they’re determined to spend more time with their own children. Don Dwyer “focused on family through the business,” notes Doug. “That’s how he felt he contributed to us—by teaching us business.”
Dina’s husband, Mike Owens, says the absence of power struggles within the family stems from the success of the founder’s vision. With everyone concentrating on living up to Don’s legacy, Mike observes, “Selfishness is minute in the relationships we have with each other.”
To Robert Tunmire, who accepted demotion to make way for Dina, the shift has been “the best thing for the company, for the family, for myself, and for Dina.” After all he’s been through with the Dwyer family, he says, “We’re probably closer than ever.”
The Dwyer Group
Stock Symbol (Nasdaq): DWYR
Headquarters: Waco, Texas
Annual revenues (2001): $22.4 million
Website: www.dwyergroup.com
Franchise concepts:
Rainbow International Carpet Care and Restoration Specialist
Mr. Rooter (Drain Doctor in the U.K.)
Mr. Electric
Mr. Appliance
Glass Doctor
Aire Serv Heating and Air Conditioning
DreamMaker Bath & Kitchen by Worldwide (associate company)
The Dwyer Group National Accounts
Private companies held by Dwyer family:
Worldwide Supply Inc.
Dwyer Real Estate and Development Inc.
Key personnel:
Dina Dwyer-Owens, 38, president and CEO
Theresa Dwyer (Dina’s mother), 67, chairperson of the board of directors
Robert Tunmire (Dina’s ex-brother-in-law), 43, executive vice president
Donald Dwyer Jr. (Dina’s brother), 37, director of international operations
Debbie Wright-Hood (Dina’s sister), 40, secretary of the company; vice president of administration
Doug Dwyer (Dina’s brother), 35, president, DreamMaker Bath & Kitchen
Mike Owens (Dina’s husband), 35, vice president of operations, Mr. Appliance