Evaluating family business practices and behavior

By Craig Aronoff

f RECENTLY attended a long-timelclient's board meeting. Having helped the business transition from its second to its third generation, I was now seeing it move on to its fourth generation of family ownership and management.

Having observed this family and its business from a full generation's perspective, I was mightily impressed. In a highly competitive industry, the family members constantly pushed themselves to be better and tried to be the best they could be. At various times along the way, they fell short or made mistakes that cost them dearly. They learned from their mistakes and pushed on.

With a deeply value-driven culture, this family business exemplifies habits and practices that can make any organizationor individualgreat. As I observed the board meeting, I tried to sketch in words what I saw. I recognized 13 concepts being rigorously applied at the meeting and over the long term. And over the long term, the rigorous application of those concepts has led to very satisfying results for the seven owner/managers in the room.

The standards that I saw in action included:

Discipline - Owners/managers consistently maintain control over themselves, sustain their rigor, and resist distraction from the tasks at hand.

. Focus - Always identify key areas and issues and direct energy toward dealing with these matters.

Responsibility - Personally accept the burden for behavior and resources without excuses or rationalization.

. Continuous ImprovementConstantly seek better ways to do whatever needs to be done in the areas of efficiency, effectiveness, and relations with key constituents.

Thrift - Regularly exercise care with fiscal resources and seek to maximize financial productivity.

KnowledgeUse all sources and experiences to gather new information and insights relative to the owner/managers' fields of expertise.

. RiskAre always aware of the possibility of loss and do everything possible to mitigate it.

. AccountabilityAre eager to set the highest possible standards and to be held accountable to those standards by themselves, each other, and respected and knowledgeable others specifically engaged for that purpose.

. CommunicationShare information openly and in a timely fashion and consistently seek ways to accelerate and improve the sharing of knowledge.

Planning - Thoroughly think through strategy and tactics in advance and establish clear goals, policies, and procedures to maximize efficiency and effectiveness.

. Relationships - Recognize the importance of human connections and always seek to establish, build, or maintain feelings of mutual support, interest, and compassion.

PerspectiveMaintain the ability to see all things in context with a sense of humor and of the relative importance of all things in relation to each other.

. IntegrityAre committed to determining what is right and then doing it.

My clients are not perfect people by any means, but not for want of try- ing. I found myself wishing that all businesses and organizations would accept and hold themselves to such standards. They make a formidable list that any lamily business can use to evaluate its own practices and behavior.

- Dr. Craig ArorulJ is co-.founder and principal of the Famillt Business

Consulting Group, Marrietta, Ga.; (800) 551-0633. He can be reached at aronoff@ efamilybusiness.com.

Reprinted with permission from The Family Business Advisor, a copyrighted publication of Family Enterprise Publishers. No portion of this article may be reproduced without permission of Family Enterprise Publishe rs.

TECO Assuming OSB Programs As SBA Dissolves

TECO will acquire the assets of the Structural Board Association at the end of this year.

Founded in 1976, SBA's marketing, research, and technical development programs have helped make OSB the panel of choice for sheathing applications across much of North America.

During the recent OSB World Symposium in San Antonio, Tx., the SBA board of directors decided to dissolve the association, transferring its assets to TECO, a certification and testing agency based in Sun Prairie, wi.

"The relationship between the SBA and TECO goes way back," said

Chris Reid, SBA chairman and v.p. of Langboard, Quitman, Ga. "They have cooperated in many ways for years and even had a joint SBA/TECO IAC meeting in Scottsdale (Az.) in 2003, so having TECO carry on what the SBA has been able to do makes perfect sense."

SBA president and c.e.o. Mark Angelini said that the asset transfer was the best way to ensure that OSB manufacturers will have continued access to its services.

The assets that TECO will be acquiring include the SBA name and logo, website name and rights, all technical information, and rights to host future OSB World Symposiums.

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Lights Out For Armed Bandit

A man accused of trying to steal flashlight bulbs and shooting at employees at Old Town Ace Hardware, Fort Collins, Co., was ordered to stand trial for three charges of felony menacing.

Police said Bronson Rhett Quinton, 26, entered the store, stole the bulbs, and left. Per the store's policy, employees chased the defendant, who dropped the bulbs, fled on a bike, crashed, and fired at least one shot at the employees. He then threw the gun onto a nearby roof and hid in a shed until captured by police.

"The defendant is a prior felon who had a handgun and was discharging it in Old Town," said prosecutor Josh Lehman. "No one is disputing this happened right in our backyard."

Quinton's public defender unsuccessfully argued that the three felony menacing charges should be condensed into one because he pointed the gun at three pursuers simultaneously. The defendant, who has several prior convictions for burglary and menacing, was ordered to return to court May l.

Buyers Prefer Wood Over Slabs

U.S. consumers prefer wood-framed first floors over concrete slabs by a wide margin, according to a recent survey by the National Association of Home Builders.

The survey, commissioned by APA, the Canadian Wood Council, and Southern Forest Products Association, found that 42Vo of U.S. consumers prefer a wood-framed first floor, compared with 25Vo for concrete.

The preference for wood does not correspond with actual practice, however. While concrete is preferred by just 257o of consumers, concrete represents 53Vo of total first floor area.

"The apparent disconnect between consumer preference and actual practice suggests an opportunity to move builders toward wood with carefully targeted wood promotion campaigns," said APA president Dennis Hardman.

APA and the Southern Pine Council are, in fact, spearheading a major raised wood floor promotion campaign along the Gulf Coast, where raised floors also offer the advantage of better protection against flooding. The joint program includes builder seminars, discussion groups, demonstration projects, technical research, consumer advertising, publicity, publications and online resources.

The program's website at www.raisedfloorliving.com features wood product specifications, construction details and images, span tables, case studies, green building information, links to additional resources, and other information.

The preference for wood floors varies widely by region, with a high of 60Vo in the North Central region and a low of l97o in the West South Central region, which encompasses Texas, Louisiana, Oklahoma and Arkansas. But even in those regions where concrete slabs are the norm in actual practice, the survey suggests there's a demand for wood that is not now being met, but could be. "It's a matter of taking the case to builders," Hardman said.

In the West South Central region, for example, just 87o of single-family first floors are built with wood, although l97o of consumers say they prefer wood over concrete.

In addition to consumer preference and improved protection against flooding, the wood products industry cites a number of other advantages of raised wood floors, including simplicity, insulating properties, ease of improving or repairing utility lines, durability, and classic style.

Blaze Hits Yolo Lumber

An early morning fire April 6 destroyed a wood storage building at Yolo Lumber, Woodland, Ca., and severely damaged a nearby building.

"I looked out the back window and saw this orange ball of flame," said sales rep David Roberts, who lives with his wife in a second-floor apartment in the damaged building. The couple lost nearly everything but their many pets.

Finished wood products were in the 40'x60' storage building, as well as the company's tools and the site's electrical panels. "I'd rather the sales office burned than this one, because this is our livelihood," said owner Larry Miller. "If you're out of power, you're out of business."

Miller closed escrow on the business in late February, which had been owned by his late father-in-law. "I'm just grateful there were no injuries," said Miller. "The rest, it's pretty bad, but we can deal with it."

The cause of the blaze is beins investigated.

Simpson Mills Lay Off 111

Simpson Timber Co., Tacoma, Wa., laid off I I I workers on April 28, for what it called an indeterminate period.

The company's sawmill in Tacoma lost 46 of its 144 employees, while the mill in Shelton lost 65 of 294 employees. Other Simpson mills were not affected.

All Depots Lose HR Managers

Home Depot has eliminated human resources managers and supervisors at each of its 1,970 stores in the U.S.

To take their place, the chain will create 230 district teams with a district human resources manaser and three assistants. A human resources service center will also be created, along with regional human resources associates who will handle recruitment.

Spokesperson Ron DeFeo said the primary reason for the changes is to put more employees on the floor to help customers.

In January, the chain cut 500 positions at its headquarters in Atlanta, Ga.

Cop Bilks Colma Depot

A former San Francisco policeman and two accomplices have been accused of stealing $62,7 18 of merchandise from a Home Depot in Colma, Ca.

Prosecutors said that officer Ilya Zlobinsky was fired for his involvement in the scheme. He and his accomplices-Arkady Zlobinsky and Anibal Ramirez-were accused of working with a teenage cashier at

Depot during six months in 2005.

The girl is accused of fraudulently changing register entries to reflect voided purchases and charge accounts that did not exist, while letting the suspects take items from the store.

The cashier was charged in juvenile court. The three men have been offered a plea deal.

Rhino Liners Targets Decks

The leading manufacturer of truck bed liners has launched a new division to market products for decks and other fl ooring applications.

Rhino Linings Corp., San Diego, Ca., has formed Rhino Home Pro.

The division's first productsFastFloor DF, decorative flooring for home garages, walkways and concrete decking, and FastFloor HB, a highbuild polyurethane coating for industrial applications-will debut this spring.

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Redding OSH Hero Honored

An employee at Orchard Supply Hardware in Redding, Ca., was awarded a medal and financial grant from the Carnegie Hero Fund Commission for saving a co-worker from a would-be kidnapper.

Theodore Lidgett,60, woiks part-time at OSH and was honbred for rescuing his then-19-year-old co-worker, Judith Schmidt.

"It's exciting to be recognized," said Lidgett, who will also receive $6,000 from the hero fund.

Armed with a l2-inch hunting knife, Joseph William Duncan tried to abduct Schmidt from her car as she left work on Feb. 15, 2007. The unarmed Lidgett was able to pull Schmidt to safety and then repeatedly slammed the car door against Duncan as he tried to follow her out the vehicle.

Duncan was convicted last year of attempted kidnapping and other charges in connection with the crime. He told police he was infatuated with Schmidt and had unsuccessfully asked her out several times during their two years as classmates at Shasta College.

lmporters Brace For CARB Rules

Foreign and domestic manufacturers of composite wood products will soon face stricter standards on formaldehyde emissions under new measures by the California Air Resources Board.

The new regulation, which undergoes first-stage implementation on January l,2OO9, applies to all raw panels or products including cabinetry, flooring, doors and furniture.

The new measure applies to composite wood products "that are sold, supplied, offered for sale, used, or manufactured for sale in California." While separate limits were established for different composite wood products, hardwood plywood's formaldehyde emissions would be capped at 0.08 parts per million (ppm) effective January 1,2009, and decrease to 0.05 ppm by 2010. The proposed rule also creates new requirements for compliance testing, thirdparty certification, and imposes new product labeling requirements for manufacturers.

Imported Wood Products Association supported the new regulations. "IWPA members and their suppliers are proud to provide products to U.S. manufacturers, distributors and consumers that meet these strict new standards," said IWPA executive v.p. Brent McClendon. "We want a seamless transition to this new standard, and unintemrpted supply lines for the California industries that base their global competitiveness on the quality, availability and value provided by imported composite wood products."

McClendon said, "Compliance with the emissions requirements of this standard is quite doable by the January 1,2009 deadline. Recognizing this creates new requirements on hardwood plywood producers throughout the world, whether located in Europe, Canada, Brazil, Mexico, or Malaysia, we have asked California for more time to allow third-party certifiers to get up and running in producer countries. We're working closely with California to avoid unnecessary supply disruptions that could cause empty shelves in California's home improvement stores at a time when the housing and manufacturing base is already struggling."