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More daughters take lead role in
family businesses

By Joan Axelrod-Contrada, Globe Correspondent, 5/4/03

Globe Staff Photo/Michele McDonald Dinah Daniels, CEO of Praendex Inc. in Wellesley Hills, took over the company from her father Arnold Daniels.

Old-timers might see her as ''daddy's little girl,'' but increasingly, the daughter is taking over the family business.

High-profile female heirs like the late Katharine Graham, publisher of The Washington Post until she died in 2001, inspired many women when she took over her family's business after her husband died.Her success underscored that family businesses need not be run by a son or son-in-law to be prosperous. Many daughters, in turn, flock to family businesses for the lack of glass ceilings. Moreover, entrepreneurial specialists say, female successors excel at the team building and communications skills highly valued by more businesses.

In a nationwide survey conducted last year by Babson College and cosponsored by MassMutual Life Insurance Co. and the Raymond Family Business Institute, some 30 percent of businesses indicated they would consider a female successor, up from 10 percent in 1998 and 12 percent in 2000, according to Len Green, adjunct professor at Babson and trustee of the Raymond Institute.

Green said that more daughters are coming into family companies with business degrees and other impressive credentials. Half of the students in his family business course at Babson are female, he said, whereas a decade ago the figure might have been more like 10 percent.

Daughters also can be less intimidating than sons to the boss, who is typically the father, entrepreneurial specialists say.

''With a son, there's the question of 'Are you man enough to fill my shoes?' '' said Ira Bryck, director of the University of Massachusetts Family Business Center in Amherst. ''If a 70-year-old man thinks he has another 30 years to go, and his son wants to step into his shoes, it can be like he's trying to kill him. Daughters come in, and it's more like, 'Dad I want to help you and make your life more comfortable.' ''

Dinah Daniels of Wellesley made sure her father had lunch every day and a parking space close to the office, steps her brothers wouldn't have taken, she said. Her parents brought her in to head up her father's management consulting firm, Praendex Inc., after tensions developed between him and her two older brothers.

''It was hard for my father to hear suggestions from my brothers,'' said Daniels, 56. ''There's a natural-born competitiveness that men feel with each other.''

Like many children of entrepreneurs, Daniels grew up in the family business. At the age of 8, she began earning a penny for every Predictive Index test she scored for her father, who had developed the landmark psychological measurement.

Linda Skole, president of Chez Josef, a banquet facility and off-site caterer in Agawam, also grew up in the family business, setting tables from the age of 12.

''My father groomed and mentored me from an early age,'' said Skole, 42. ''For my father, my being female was not an issue. He never put any limitations on what I could do.''

When Chez Josef founder Allan Skole decided to retire eight years ago, he turned over the business to his two children, making Linda responsible for operations and her brother, Ron, in charge of sales. Sometimes, though, the two areas overlapped, and conflicts erupted.

''I would be lying if I said it didn't happen to us,'' said Skole, whose brother died of cancer three years ago.

Skole keeps her father's office sacred for his periodic visits, knowing that she is in control of the company. ''It was his pleasure to turn over the reins,'' she said.

Many other founders are more ambivalent. Kristin White said she decided to leave White's Pastry Shop after her father decided to step back in. Although she had grown up with the small chain of bakeries on the South Shore, the 28-year-old holds an MBA and is now exploring career possibilities in financial operations.

''I love my father, and felt myself becoming an employee first and a daughter second when it should be the other way around,'' White said. ''It wasn't worth it to me to hurt the relationship.''

Indeed, the role of second- and third-generation CEOs is often a dicey one, with squabbling among the owners' children sometimes threatening the company's survival. Only 40 percent of family companies survive to the second generation, 12 percent to the third, and just 3 percent to the fourth, according to research cited by the Family Firm Institute in Boston.

''What's the biggest nightmare of the second generation?'' asked Daniels. ''It's that you'll screw it up. To be successful, the second generation has to view it as a privilege to be able to continue what the founder started.''

And, while succession might be difficult for sons, too, specialists say that daughters often face special challenges because, as much as companies might embrace a kinder, gentler form of leadership, many people still carry with them old notions of how men and women should behave. ''If a man has certain traits, he's a leader, but if a woman has them, she's a shrew,'' Bryck said.

Then there are the problems the daughter's leadership might cause within the family. The mother might want a son to head up the business and resent the new closeness between father and daughter, as she, the wife, was used to being her husband's sole business confidante.

Daniels found that her relationship with her mother suffered after she took over the company. Maybe if she had paid closer attention, she said in retrospect, some of the problems might have been resolved. ''What happens instead is the relationship breaks down, and you don't have one,'' she said.

The business, on the other hand, has blossomed, growing from $4 million to $18 million in revenues under her leadership. She gained the early support of employees by showing her clear respect for her father even though their leadership styles differed. Daniels, the daughter, opened up decision-making to employees and implemented family-friendly work policies.

''My father's view was that people should just come to work,'' Daniels said. ''He didn't like anything that took the person out of work.''

At Chez Josef, Skole earned the trust of employees by working alongside them, doing whatever was needed in the kitchen or dining room. She'd carry trays and help prepare food. But, as much as Skole believes in hard work by family members, she also found it helpful to hire an outside management consultant. She recommends that second-generation heirs seek advice from neutral sources outside the family, including the board of directors, and, if possible, get management experience in other companies before taking over the business.

After her brother died, Skole decided to cut back on her hours so she could have more balance in her life. Working 16-hour-days, seven days a week had taken a toll.

Female heirs say that the top post can be all consuming. ''You get a new child,' said Kate Putnam, 50, who heads up Package Machinery in West Springfield, which was started by her great-grandfather. As the mother of three children, ages 24, 18, and 10, she speaks from experience. ''You eat, drink, and sleep it. It wakes you up at 2 a.m.''

For Putnam, as for many female heirs, the rewards of running a family business outweigh the problems. ''I don't have a glass ceiling,'' Putnam said. ''I think I make a lousy employee. I don't have a lot of respect for hierarchy.''

Daughters vary in how much emphasis they put on keeping the business in the family. While Putnam is unconcerned that her 24-year-old daughter, a funds manager, show no interest in taking over the business, Skole is already grooming the next generation for succession. Her brother's three oldest children, ages 14, 13, and 10, have taken over her old job: setting tables.

Skole believes that Chez Josef must stay in the family. ''That's what's made it so successful,'' she said. ''The family is very rooted in the community and gives a lot back to the community. Corporations don't have that level of commitment.''

So, even though her nieces and nephews are busy with sports and other activities, Skole works hard to get them involved in the family business.

''It's a different environment than it was 20 or 30 years ago,'' said Skole. ''There's a higher percentage of women executives. It's a lot easier than it was when I started out.''

Joan Axelrod-Contrada is a freelance writer. She can be reached at axelrodcon@aol.com.

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