As an outsider brought in to troubleshoot, you’ve discovered that the family-owned company’s flagship yard is suffering from clueless management by a family member. What would you do?
You recently celebrated 20 years in the LBM industry. You’ve worked at several different companies during that time, and your current situation has presented a challenge that you have yet to face, and you’re wrestling with the best way to handle it.
In your new position as the VP of Operations for a six-location, family-owned LBM dealer, your job is to work with the general managers of each location and implement best practices to help the company grow and prosper. You decided to start by visiting the top- and bottom-performing yards—which just happened to be operated by brothers.
Surprisingly, the lowest performing yard was the company’s flagship location. Despite being the biggest and newest store in a prime location, its sales were lagging and it struggled to attract and retain employees (despite paying above market wages). A survey revealed the employees were disengaged and frustrated. Although it’s positioned in an area dominated by new construction, yard traffic was light. Craig, the brother running this location, made clear that he was the victim of, well, everything. “No one wants to work anymore! I pay more than any of our other yards, but people quit shortly after they’re hired. I guess it works out, because our sales are down, we wouldn’t have the staff to do the kind of volume our other yards are doing anyway.”
Meanwhile, just 10 miles away, the top performing yard is humming with activity. There’s a healthy mix of young employees and seasoned pros, and the positive energy is palpable. Despite being a mid-sized yard with less room for inventory, its sales and margins consistently lead the company. The employee survey showed people as engaged, fulfilled, and enjoying their jobs—despite earning slightly lower wages than at the shiny new location. Ben, the brother running this location, has a very different outlook. “I’m fortunate to have a rock-solid team of pros who’ve been here for decades who are more than happy to mentor and train our young team members. We recognize good work and celebrate our people, and have no trouble filling open positions.”
Now that you’ve gained some insights into the operations, you’re scheduled to report your findings to the board of directors, which is primarily non-active family members. Unfortunately, both brothers sit on the board, and you’re hesitant to share what’s happening under Craig’s leadership on the company’s sinking flagship. What would you do?
Present the facts. Stick to the numbers and objective observations, and let the members of the board draw their own conclusions.
Identify challenges and opportunities. As an outsider in a family business, you’re in a delicate position. Be sure to point out pros and cons about each operation, and ways for each to improve.
Be blunt. They didn’t hire you to sugarcoat the truth. Report what you saw and learned, the good, the bad and the ugly. Then hope that they don’t shoot the messenger.
Take a field trip. Instead of reporting what you learned, arrange for board members to tour each location, so they can see for themselves what’s going right, and what’s going wrong.
