A few summers ago, while attending a family retreat at a Pocono mountain resort, Harold L. “Hal” Yoh 3rd; his wife, Sharon; his brother Mike; his nephew Ryan; and his father, Harold L. “Spike” Jr., all decided they wanted to learn how to fly fish. They hired a guide, rented equipment, roused themselves at an early hour and waded into a cool mountain stream to cast their lures. Sharon remarked on the peace and quiet of their natural surroundings.
“That lasted about ten minutes,” jokes Hal, the 40-year-old third-generation chairman and CEO of the giant Day & Zimmermann Group. “It took my father that long to organize a pool. He had us all chip in ten dollars, and pretty soon we were fishing for the first fish, the biggest fish, you name it. My father will bet on anything.”
Hal’s 64-year-old dad, Spike, Day & Zimmermann’s chairman emeritus, admits that he “likes to get things going.” But even Spike wouldn’t have bet that the 100-year-old Philadelphia engineering service firm that he and five other executives acquired from his father in 1976 would today rank 115th on the Forbes list of privately held companies, with annual revenues of $1.5 billion, 24,000 employees in 150 locations worldwide and projects completed in more than 75 countries. Or that some 20 years later, the company would pass to his five children, all of whom work for D&Z as high-ranking executives.
In addition to Hal, Spike’s son Michael, 37, is president of the Munitions Logistics Division of Day Zimmermann Mason & Hanger, the company’s government systems group. Daughter Karen, 35, is vice president for corporate and community affairs as well as president of Barclay Travel, the firm’s wholly owned corporate travel agency. Jeffrey, 33, is regional president of H.L. Yoh Company, the firm’s technical staffing division. And William, age 28, is senior vice president and the only Yoh to report directly to another family member.
A billion-dollar company wholly owned by multiple third-generation siblings is an almost unheard-of phenomenon these days. The Yohs’ cohesiveness as a business family is all the more remarkable when you consider that the siblings’ father, Spike Yoh, was himself the child of divorced parents. Clearly, Spike and Mary Yoh, his wife of 42 years, have been doing something right. But precisely what?
In raising their family and growing their business simultaneously, Spike and Mary appear to have created complementary cultures that reward hard work, foster communication and promote individual and collective integrity. “It isn’t dumb luck that all [the kids] turned out the way they did,” Mary reflects. “We tried to treat them equally, to subtly push them to improve themselves, to be positive, have fun and enjoy life.” For the Yohs, at least, such a formula has paid off in spades.
Day & Zimmermann traces its origins to 1901, when two Philadelphia engineering students, Charles Day and Kern Dodge, revolutionized industry by pioneering the use of electric motors instead of belt drives. (Their classmate John Zimmermann joined three years later, and Dodge subsequently dropped out.) By the 1950s, Day & Zimmermann was one of the nation’s leading engineering and construction companies, having handled major projects such as a quartermaster terminal for the U.S. Army, the power lines for the Boulder Dam and the feasibility study for New York’s Lincoln Center.
At the same time, Harold L. Yoh Sr., son of an Ohio farmer whose family emigrated from Holland in the 18th century, was launching a contract engineering services company. In 1940 Yoh Sr. and a partner formed Duncan Tool Design Company in Philadelphia, where Yoh had attended the University of Pennsylvania’s Wharton School. Yoh bought out his partner in 1946, renaming the firm the H.L. Yoh Company. By 1953 Yoh’s company was said to employ more than 500 designers, draftsmen and specification writers. When Yoh Sr. acquired Day & Zimmermann in 1961 for some $2.5 million, the Yoh Company became a subsidiary of D&Z, which it remains to this day. For all its huge size, the newly merged Day & Zimmermann more than doubled its revenues during Yoh Sr.’s first four years at the helm.
A generation later, Yoh Sr.’s son Spike (supposedly nicknamed as an infant by an uncle who admired the zany musician Spike Jones) teamed up with five other Day & Zimmermann executives to purchase the company in a leveraged buyout from Spike’s father in 1976, when Spike was 39 and the company’s sales had passed the $100 million mark. Spike says his investor group beat out two others with their bid of $16 million. And while Spike did acquire the majority of the stock, he and Mary were forced to leverage much of their personal assets, including their house, to pay his father. The elder Yoh died in 1985 at age 77, and as Spike’s fellow investors retired and cashed in their stock, Spike bought their shares. Since 1998, when Spike retired, the company has been totally owned by Spike’s five children, who acquired their stock through a gifting program that he began in the early 1990s.
If you look carefully, you can spot the family resemblance in each of the five Yoh adult children, the first four of whom are 22 months apart. They all have their parents’ broad foreheads, wide cheekbones and deeply set eyes. CEO Hal, the eldest, and Bill, the youngest, literally punctuate the family dynasty at either end like two exclamation points; they’re elongated versions of their siblings. The middle three—Mike, Karen and Jeff, who were known, according to Karen, as the three “apricots” when they were growing up—share their mother’s fair complexion and red hair.
By their accounts, growing up Yoh was a disciplined yet fun-loving experience. There were rules for behavior and strict consequences for disobedience, but there was also solidarity. “We did a lot of things together, and we tried to expose [the kids] to as many things as we could,” says Spike. There were annual Presidents’ Weekend trips to the Poconos, summers at the New Jersey shore and an infamous 35-day family van trip across the country when Bill was eight. “I remember that we did a practice trip to Williamsburg and decided that a station wagon wasn’t big enough,” Hal recalls with a laugh. On that trip the family camped out, stayed in motels and crashed with friends as they worked their way from coast to coast. “It’s amazing to think that my Dad took this trip the year he bought the company from my grandfather,” Hal muses.
To Spike, however, it was business as usual—the business of raising his family. Neither he nor Mary had what Bill terms a “textbook” childhood. Spike’s parents were divorced when he was young, and Mary’s father died when she was eight. (“We don’t want to go there” is all Spike will say about his relationship with his father.) When it came to raising their own children, the couple made it a priority to be available and involved.
“I was out of the house before the kids woke up,” Spike remembers. “But I was always home for dinner, if I wasn’t traveling.” Karen and Hal recall the family’s evening meals as “noisy and lively.”
“Dad talked about the business at the dinner table,” she says. “He really loved what he was doing, and it showed. He presented us with a very positive image of the company and of work in general.”
While many consultants warn against mixing family and business, Marshall Paisner, the Massachusetts car-wash mogul who wrote Sustaining the Family Business, strongly supports the Yohs’ approach. “I suspect that the common practice of families not allowing business conversations at dinner has caused many young people to turn away from their family businesses,” Paisner hypothesizes. “The mere exclusion of the subject sends a negative message; at the same time, a great opportunity to pass on cultural values is missed.”
Mary, a stay-at-home mom, volunteered at the kids’ schools, and both parents tried to attend as many of their kids’ sporting events as they could. “In a sense, my dad saw what not to do,” Bill comments. “My parents raised us to be a close-knit group and defend each other against the outside world.”
By the time they were teenagers, all the Yohs were required to work for their spending money. “There were no ‘goof off’ summers,” Mary recalls. “At about the age of 13, I remember my father telling me it was time to go to work,” Jeffrey remembers. Although no one was required to work at Day & Zimmermann, most did. (“They all seemed to gravitate toward it,” Mary observes.) But no one started anywhere near the top nor had any contact with their father—a practice that Spike intentionally continued throughout each of his children’s progressions through the company. “The premise behind this was that by not having ‘dad’ always involved,” Spike wrote in 1998, “the Yoh children’s supervisors and peers would feel less hand-tied and restricted by the fact that they worked with ‘a Yoh.’”
The strategy seems to have worked well. “We are fortunate that the company is large enough that each of us has been able to develop our own identity within the organization,” Hal says. Geographical distance has also helped. While all of the Yoh siblings currently reside around the Philadelphia area, each has spent time living or working in another part of the U.S. Jeff started in St. Louis before moving to both Seattle and North Carolina; Mike moved around for 15 years among offices in Kansas, Nevada and Texas; Karen worked for DuPont in Wilmington; Bill worked for CSC Index in San Francisco for two years; and Hal began his career with Westinghouse in Durham, N.C.
Even when they came back, Dad kept his distance, business-wise. “We never discussed working relationships, salaries and personnel issues with our “We made a pledge never to circumvent the chain of command.” In fact, the first time that a Yoh ever answered to another Yoh occurred when Hal reported directly to his father during the two-year transition period before Spike retired. (In a recent organizational move, Bill now reports directly to Hal.)
While they were growing up, each of the Yoh kids also earned an allowance by helping out at home. Big brother Hal, the future CEO, designed a rotating “chore chart” that assigned such tasks as setting and clearing the table, washing the dishes and taking out the trash. Everyone was considered equal (“My brothers all grew up knowing how to cook and change a diaper,” says Karen) except Bill, who was so much younger that another sibling had to work with him. “No one wanted to work with Bill because it would take that much longer,” Spike recalls with a grin. Hal even devised rules for eating popcorn, Karen remembers: “You could have as much as you wanted but you couldn’t take more than one piece at a time.”
Spike and Mary, meanwhile, imposed their own “bus rule,” which became the children’s standard for public behavior. “Essentially, we told them not to hang their dirty laundry out in public,” Mary says. “They were not permitted to fight with each other on the bus, but they could work it out when they got home.” Which they did, and apparently still do. In recent years, this policy has translated into a unified and consistent message of support for Hal. “We may disagree with each other behind closed doors,” Bill says, “but it’s important that people don’t see dissension among Yoh family members. There are 25,000 other families counting on this family getting along.”
In later years, when the Yoh siblings would meet their counterparts at family business conventions, they would marvel at the families who grew up, as Karen puts it, “using Dad’s credit card. It was a huge difference. We were always taught that if you want something, you have to work for it. I think it made us all very responsible adults.”
It may have sustained their family company, too. In a 1992 study based on Internal Revenue Service records, Douglas Holtz-Eakin of Syracuse University and David Joulfaian of the U.S. Treasury found that 4.5% of those who received an inheritance of less than $25,000 dropped out of the workforce, while one in five dropped out when they received more than $150,000.
“The experience of struggling is important,” says Thomas Davidow, a principal of Genus Resources, a Needham, Mass., consulting firm. “The ethics and honesty that are there don’t mean anything unless you struggle.”
While the Yoh children were never handed their opportunities on a silver platter, they were always encouraged to speak their minds. Some 20 years ago, Spike initiated family meetings as a forum for family discussions. At first, Mary recalls, the topic might be: How do you make the family better? “The answer usually was, ‘Dad has to be nicer.’” As the family grew up, the meetings evolved to include spouses (all the Yoh brothers are married). The entire family, including spouses, now meets once or twice a year. Each member, including spouses, rotates the responsibilities of hosting the meeting and setting the agenda, but the rules remain constant: Discussions are candid and free-flowing and everyone is entitled to his or her opinion.
“We do talk about the business,” Bill acknowledges. “But the main thing is ‘life updates.’ We go around the table, and each of us fills the others in on what is going on in our lives. That’s where the value is. It keeps everyone grounded.” By consensus, the siblings also leave each other weekly voice mails (by midnight Sunday) to keep in touch.
It was in a series of council meetings in the early 1990s (at Mary’s urging, according to Spike) that the Yohs developed their own written set of family values: respect, support, communication, integrity and growth. Shortly thereafter, Spike promulgated a similar (but not identical) set of company values: safety, integrity, quality, profit, growth, family and community. “These values are the basis for all family and company relationships,” Spike wrote. “The entire family is continually faced with both the blessing and the curse of being an owner of Day & Zimmermann. The blessing comes from the ability to work in and have an opportunity to positively influence a diverse, dynamic organization—one that is based on values and a common understanding of doing what is right and treating each other fairly. The challenge comes from the fact that, as Yohs, the family members are well known and frequently under the scrutiny of co-workers…. As such, the Yohs always strive to work hard, be fair and do the right thing.”
Although Day & Zimmermann has technically passed the critical third-generation ownership transfer—a milestone celebrated by fewer than one in ten family companies—a greater challenge may lie ahead: the transition from a sibling partnership to a cousin consortium. Among them, the five Yoh offspring currently have 12 children. “We have no cousins involved in the business … yet,” Bill jokes.
To that end, the five third-generation owners have created their own sub-group to their family council, which they loosely call the Yoh Family Business Council. (“One of the biggest fights we ever had was over the name of the sub-group,” Bill quips.) The five shareholder siblings meet in this group about six times a year to discuss their personal as well as professional issues. Although the spouses are excluded from these meetings, Bill says that “There are no hard feelings, since we principally talk about company matters.”
It was in the YFBC that the siblings hammered out the logistics of their shareholders’ agreementâ as their father had demanded. “He told us that the five of us had to work out the details of what the world would look like without him,” Bill recalls. It was also in this YFBC that the third generation developed phantom stock, profit-sharing and equity rights appreciation programs for high ranking non-family executives. “We tried to write our shareholders’ agreement with the long term in mind,” Karen says. In effect the five Yoh siblings did what their father wanted without his uttering a word. “It is now more important than ever to motivate and incentivize the entire management team,” Spike says approvingly.
“I’d like this to stay a family company,” Spike has said. “But we’re always preaching that the company is bigger than the family.” Day & Zimmermann’s past can’t guarantee its future, of course. But don’t bet against this house.
Kathryn Levy Feldman is a free-lance writer who lives in Bryn Mawr, Pa.