When Irving Perlman, owner of Louis Perlman & Sons, died in October 1988, a local newspaper in western Massachusetts ran a story entitled, "The demise of the Perlman firm: All the Perlman men are dead."
Jane Perlman, a Boston social worker, was furious when she read that sexist headline, but she realized the article's conclusion was probably correct. The scrap metal yard founded by her grandfather in 1912 was in danger of closing down for lack of a successor. Her uncle, Irving, was dead; her father, Irving's brother and partner, had died years before. Neither brother had had any sons. Jane returned to Pittsfield, Massachusetts, to solicit bids for the yard. But a funny thing happened: She fell in love with the business and decided to run it herself. Since then, Jane has managed Louis Perlman & Sons (which she has no intention of renaming) with a steady hand.
One reason that so many family businesses fail to pass to a new generation may be that fathers have overlooked half of their potential successors—their daughters. In the past, daughters have taken over a family business only after the sudden death or illness of a key male family member, or when sons didn't want to run it, and are often thrust into the role with little or no preparation. "I liked to hang around the yard when I was growing up," Jane Perlman, now 39, recalls. "I was crazy about my father, but I never envisioned myself working here—they said it was no place for a girl."
Times may be changing. The modern-day business owner has a hard time denying his daughter a place when she comes home with a Harvard MBA in hand. In 1986, 20,849 MBAs were awarded to women in the United States—up 70 percent from 1980. More and more highly qualified women are knocking at the doors of their family businesses today. They cannot be turned away, but their rise may be blocked by lingering conflicts unique to the father-daughter relationship. In a recent survey of Family Business subscribers, the 24 percent of respondents who are female complained that they were significantly less satisfied than men with the way their relatives treat them, and with their lack of control over their compensation, company policy, and long-term planning (see FB, February 1990).
Colette Dumas, a professor at the University of Quebec at Montreal, recently studied 18 family businesses that have both a father and a daughter in them. One common problem Dumas saw was what she called the "Snow White Syndrome." A daughter who feels a need for more intimacy with her parents goes into the father's business. They spend long hours together at the office, share confidences, and constantly talk business. Their closeness incites feelings of rivalry and jealousy in the mother, similar to those dramatized by the wicked stepmother in the fairy tale. To avoid stirring up those feelings, dad may unconsciously impede his daughter's rise in the business.
"Unless there's some resolution of this syndrome," says Dumas, "a daughter will remain invisible and without a voice. A daughter must learn to be more confident in what she has to offer the family business." But that doesn't necessarily mean she must run to a therapist's couch. Simple and practical ways to boost confidence include acquiring experience, new skills, and taking classes. The next step, though, is not so simple. Dumas notes "She must ultimately push forward and try to stand up to the father. In doing so, she may be earning his respect."
Researchers such as Dumas are just beginning to notice that father-daughter business relationships often depart from the well-documented father-son experiences. "It's dangerous to give managerial advice to daughters based on studies conducted on fathers and sons," she says. "Much of the literature focuses on the conflict that arises between fathers and sons around issues of control, power, and competition." Different conflicts haunt daughters, she says, "who wish, on the one hand, to take care of the father and, on the other hand, to take charge of the business."
Daughters are also likely to encounter more resistance from nonfamily managers, who may accept a son as a legitimate successor but view a daughter as what Dumas calls a "usurper." A daughter is usually socialized to be less aggressive than a son, especially with her father, Dumas says, but in the business "she may be forced to assert herself indirectly with another—the manager—rather than directly with the father." Half the businesses in her study had such a problem. In some cases, daughters attempted to protect their fathers and the business from the "bad" manager; in other cases, the managers tried to protect the boss and the business from the "bad" daughter.
Most of the daughters in Dumas's study complained about being treated like "daddy's little girl." For years they may be, in Dumas's phrase, "the invisible successor." Their fathers' image of them as fragile and defenseless makes it hard for them to assert themselves. One daughter reported that she still had to kiss her father every morning or she would hurt his feelings.
While other studies have shown that many fathers often don't treat their sons as fully responsible adults at the office, they seem to have even more difficulty seeing their daughters this way. Dumas says "the tensions resulting from role carryover are even stronger for daughters ... since sons have been socialized to join the business and are seen as eventual successors."
Daughters may enter the business for different reasons than do sons. Young men typically strive to separate themselves from their fathers and assert their independence in the business, while young women may find more satisfaction in the work because it strengthens their attachment to the father or another significant person in their lives.
In a 1982 survey, John Ward, professor of private enterprise at the School of Business of Loyola University in Chicago, asked 200 male and female successors to list the most important reasons they joined and stayed in their family business. The overwhelming majority of sons answered, "To someday be in charge of my own business." Most of the daughters, however, said, 'To provide opportunities to stay close to my family."
Given their different motivation, Ward thinks women in the business "frequently will emerge informally as the leader of the team," even if they are not given the formal title of CEO. "The daughter, if she's motivated by what the daughters in my study are, will say, 'My best contribution will be to build a good team.' In a good team, you don't even know who the leader is."
Barbara Hollander, a family business consultant in Pittsburgh, agrees that "daughters will work very hard to manage conflict." She adds, "Their cultural inclination to be the 'family glue' works for and against them. Sometimes they want so badly to avoid conflict that they put their own goals on the back burner."
Some daughters are not so willing to subordinate their aspirations for the good of the family team. Some go to the opposite extreme, putting their own interests above everyone else's. In a paper on how to prepare daughters to be successors, Dumas describes three common types of behavior in the firms she studied.
Daddy's little girl
Almost half the daughters studied were content to work in their father's shadow. Such a daughter, says Dumas, is "incapable of speaking up or of trusting in her own identity enough to act in her own best interests or those of the firm."
One daughter in her early 30's had worked several years outside the family firm. She joined the company, a manufacturer of consumer products, to help her father after her brother quit the business. She was very close to her father and would listen patiently to his business problems and bolster his morale. After five years she became the company's sales representative. But she worked in close collaboration with her father and followed his sales routine. Later, when her father suggested that she step up to marketing director, she refused. She knew she would have to act more independently in the new position, and would not be working as closely with her father. She was more comfortable letting him take the lead.
The need to manage a fragile sense of identity appears to have limited her perception of the roles she could play in the family firm," says Dumas. "The expression of emotions and caring are an asset in family businesses. However, if the daughter orients her behavior solely toward caring for her father, to the exclusion of actions which would be beneficial to the organization's effectiveness and survival, she will not be prepared to take over the CEO's role."
The wild ones
One daughter took advantage of her father's long absence to overhaul the company's distribution system, which she felt was outdated and inefficient. In an interview with Dumas, she explained that she had proposed the changes to her father, but he wouldn't listen— "After all, I'm only his daughter and I had to keep my mouth shut."
She recalls, "Finally, one time he was having some problems with his health so he went on vacation for three months. I was in charge, so I decided it was time for some changes. I hired a manager to work with me—my father had never wanted to spend the money—and together we revamped the distribution system. We even bought a computer. Then, instead of running out to make deliveries to customers whenever they called for the littlest thing, we scheduled a delivery day for each customer, with a new, efficient route.
"Well, some of the customers weren't happy at first, because my father had catered to their wishes. He knows every customer by name, and even knows their usual orders. My father? He wasn't happy with the new setup at all!"
This daughter was proud of her take-charge ability. But she had risked the company by embarking on a major change without consulting anyone in the business.
A few "wild ones" emerged in Dumas's group. Like "daddy's little girls," they suffer from injured self-esteem, in her view. Their behavior appears to be "rebellious, oriented toward sabotaging the business and changing its fundamental culture." They are impulsive risk-seekers who are constantly engaged in power struggles, all of which makes them sound uncomfortably like men. Dumas agrees that "those labels are considered normal for a son, but not for a daughter." She adds: "We need to reexamine what our expectations are for women's behavior ... [and] reexamine old models of male behavior—imagine what it's like for a son who doesn't exhibit these behaviors."
Caretaker of the king's gold
A balance was achieved, by almost half of the daughters in Dumas's study, between dependent and rebellious behavior, between supporting the father and running the business. These are women who still get much satisfaction from gaining the appreciation of their father, Dumas stresses, but who also have learned to assert themselves, fight for their views, and use conflict productively. They are likely to make good successors.
"We're very supportive of one another," one of these daughters said about her relationship with her father. "Now that he's getting older, I'm able to take over when he needs some vacation. He can relax knowing I'm in charge. He trusts me with the business." Another daughter said: "He knows that if there's an emergency, I'm going to hop to it and take care of it; whereas before [my arrival], he always had to be 100 percent, 24 hours a day, conscious of the business."
Dumas's sample was small and all based in Southern California. Her description of general types, however, is useful in understanding the pressures on daughters in the family business. It also highlights the different qualities women bring to a business, which are often not fully appreciated by their fathers.
The father in Snow White is almost completely absent from the story. He is a remote figure who does nothing to protect his daughter from the wicked stepmother's plots. In the family business, the father may overlook his daughter because of ingrained stereotypes of women as emotional and weak. As Dumas puts it, a daughter's "dependent or intimate behaviors can often be interpreted as undesirable or inappropriate in our society, where the demonstration of strong independence is valued. Therefore, if daughters are judged according to these 'masculine' values, they may be found wanting, and judged incapable of successfully managing the business."
Today many daughters no longer want to be treated like Snow White. They are speaking up, asserting their goals, and getting their fathers' attention. "Becoming a successor by default was the most common situation for daughters 10 years ago, where there were no sons to take over or because the sons couldn't get along with dad," says consultant Barbara Hollander. "But more and more daughters are winning by announcing their candidacy and giving it a shot."
Robin Bacci of R.A.B. Motors, a Mercedes-Benz, Bentley, and Rolls Royce dealer in San Rafael, California, is typical. As a student, Robin had worked summers and weekends filing repair orders at the dealership owned by her father, Roland Bacci. After college, she started out as a bookkeeper, then gained experience in other departments, including sales. Deciding that she wanted to run the company's overseas delivery program, she asked her father to give her a shot. He agreed—and she increased sales by 25 percent in her first year.
When the sales manager quit in 1983, Robin asked her father for that job. Once again, he agreed. And four years ago, when her father, the general manager, was involved in building a new office building for the company, she suggested that he let her run the day-to-day operations of the dealership, with the title of general manager.
Robin's father has granted her three wishes, but he admits to some reservations about her last promotion: "I was a little apprehensive about a woman being general manager over all the managers and workers—all men. But she is aggressive and has always proved herself."
Another tough question arises when a daughter assumes a major role in a family business. The father's resistance may be based on a concern about whether a daughter can juggle both business and children—that is, his business, with all the demands and stress he knows goes with it, and his grandchildren.
Even Robin Bacci, 34, may face an uphill battle on this front. Robin is single and sometimes works 70 hours a week. Asked whether he'd like his daughter to marry and have kids, Roland Bacci, now 63, says: "I think about that a lot. I think she could manage both kids and the business; she's real strong. But I don't know if I'd want her to do both. She already works so hard. I guess, if she thought she could do both, I'd let her." But Roland hopes that Robin will eventually share responsibility with her brother, David, 31, who is currently sales manager.
One solution is better management. If a daughter can convince her father that she does not have to devote all her time to the business, if she can manage more efficiently by bringing in good people, delegating, and planning properly, she may not have to choose between career and children. Donald Jonovic, president of Family Business Management Services in Shaker Heights, Ohio, believes it is possible to show dad that "the real reason the business seems so difficult to manage is because he hasn't managed it properly."
Women are gaining the experience and training they need to do the job. Jonovic estimates that among the daughters he advises in his consulting practice, 75 percent have outside experience before entering the family business, while only 40 percent of the sons do. "Outside experience is crucial in establishing credibility with senior people in the company, with customers and suppliers, as well as with your father," Jonovic says.
Occasionally, encouraging the kids to get outside experience can backfire, as Thomas Horton, a college business-textbook publisher in Sun Lakes, Arizona, discovered. At the suggestion of Milton Friedman, the Nobel economist and one of the firm's initial authors, Horton named his company Thomas Horton & Daughters, he says, "because my kids would have to work for me then." Horton's three daughters went off in search of outside experience—and never came back.
Father-daughter working relationships can be an emotionally charged minefield. Professor Colette Dumas of the University of Quebec at Montreal has a few suggestions for navigation.
-J.P.H.