The Ties That Bind: Manufacturing Families
Family-owned and -operated businesses often make up the core of manufacturing communities and various industries across the United States. The HVAC manufacturing trade is no exception. Some of the best known companies in the industry have been founded and run by the same families for decades - successfully.
Maintaining a strong brand and business philosophy continuity have been the foundation blocks of these companies and will continue to be in the future as new generations join the business and learn from other family members. This article will look at four well-known HVAC manufacturing companies and their keys to longevity and success in the often up-and-down business world.
JACKSON SYSTEMS LLCJackson Systems, LLC was founded in 1997 in Indianapolis by Ron and Bette Jackson and their son, Tom. The company is a direct-to-contractor zone control manufacturer and distributor. Both Ron and Tom have mechanical and engineering backgrounds. Tom has 50 percent ownership and Ron and Bette have the other 50 percent.
"We do have two family members in key positions," said Tom. "My brother Joe is our vice president of Custom Controls and my uncle is our operations manager. We just hired our first third-generation family member. He is my nephew [Joe's son] and works in our Custom Controls division."
Jackson said that there has been no real family "issues" to this point in the company's history. "We have had a few family meetings and explained the ownership and what happens in the event of a death or selling of the company," he said. "With family businesses, communication even becomes more critical so everyone is on the same page."
That communication spills over into the "what if" scenario in the event of a life-changing family episode. "We to make sure we have a strong exit plan in place," Jackson said. "The family needs to have everything documented and be crystal clear what happens when certain events occur (death, selling the business, etc.). We are currently working with a certified family business specialist and business succession planner to help us along this journey.
"We want to make sure that the next generation has more opportunities than we did. That could mean running and owning Jackson Systems, or it could mean we have taught, prepared, and gave them the tools to pursue other ventures."
The Jackson family shares a lot of the same business and product knowledge and that is very important in the overall business atmosphere. "For me, the opportunity to work with some of the most important people in my life and build something wonderful with them is a great reward," Jackson said. "I love the fact we have similar philosophies and share common goals. We were already a close family, but having a family business has allowed us to grow closer."
Interacting with nonfamily employees is of the utmost importance to the Jackson family, too. "We have almost no issues with nonfamily team members," said Jackson. "Everyone understands they are working for a small, family-owned business. We all seem to work together extremely well, and as the owners we make sure to recognize each team member for their contributions, regardless of whether or not they are family.
"There are rare occasions that a team member might not be comfortable talking with one of the owners about a touchy subject. When this happens, we encourage them to go to another owner, or discuss it with our chief operation officer, who is not a family member, and then he can bring it to the owners."
Jackson knows that at some point in the future, he and his family will have to make decisions on who will run or own the company. He doesn't plan on waiting until the last minute to make any type of transition. "At this point, I think there are three possibilities - allowing the next generation of the Jackson family to own and run the company, selling to employees (ESOP, etc.), or selling to an outside buyer," he said. "I am trying to learn as much as possible and make strong choices as we grow and expand. Whatever the final outcome is, I want to make sure our family and our team members are taken care of."
EWC CONTROLSEWC Inc. was founded in Hillside, N.J. by Dexter MacMillan and William Cyrana in 1961. The company has grown into a major supplier of power supplies and HVAC products. A newer division - EWC Controls - was formed in 1988, specializing in HVAC zoning systems for residential and light commercial applications.
EWC is still a family-owned company. It is a 50-50 partnership between the two families of the original founders. Today's leaders are third generation on one side and second generation on the other. MacMillan brought his son-in-law, Chris Hiotis, into the business in 1966. Chris bought out MacMillan's share of the business in 1985. Chris brought his daughter, Anne Reilly, and son-in-law, Mike Reilly, into the business in 1993. Anne bought out Chris's share of the business in 2011. Anne is now a third generation owner and Mike is the executive vice president. Bill Cyrana brought his son Kevin into the business in 1976. Kevin bought out Bill's share of the business in 1992. Kevin, now a second-generation owner, has his son Patrick working in the business in the engineering department.
"EWC has consistently been able to bring in family members of multiple generations and incorporate them into every aspect of the business," said Mike Reilly. "We have successfully transitioned through three generations of owners within the same family. We have employed sons, daughters, aunts, uncles, nieces, and nephews over the years and have had them in every department of the business.
"Every new hire is hired for a position that needs to be filled. Whether you are a family member or not, you are expected to fill that role. Family members are not given any special treatment. Our philosophy is the customer comes first, our employees come second, and the business third. Nowhere in that philosophy does it say 'family.'"
Reilly said that the company runs well with contributions from family and nonfamily members. "EWC has been very lucky over the years with our interaction of family members and nonfamily member employees," he said. "As with any company, occasionally you are going to have an unhappy worker, but we have not had this happen due to a family member's involvement. We try and create a safe and comfortable work environment for all our employees and do not show favoritism or nepotism. Our family members realize that the company's success depends heavily on our employees and their ability to enjoy their work surroundings."
That philosophy spills over into one of the biggest challenges of running a family business: equal treatment. "Our biggest challenge of having family members in the business is to make sure that we are treating everyone fairly," Reilly said. "In order for EWC to retain good, talented employees, we need to make sure everyone feels that they have an equal ability to be successful in the company, family member or not.
"There are times that we have treated family members harder than nonfamily members in order to make sure we look like we are protecting that fairness for all, and that has been wrong. It is a fine line when you have two equally talented employees, and you need to choose. Luckily, over the generations we have gotten it right."
But just like there can be challenges, there can also be rewards. "The greatest reward in business is success; the next greatest reward is to see a family member succeed in that business," Reilly said. "No matter what role a family member succeeds at, and at EWC we have seen it at every level, it is truly a gratifying experience. To be able to watch a family member show leadership skills, or take initiative, show problem-solving skills, or take over the entire company, whatever the success, it is truly one of those proud moments that are cherished.
"It is not important to EWC to maintain a legacy within the company. Each generation and each leader is going to have their own direction and battles for EWC. We are grateful and proud of what the leaders before us established here at EWC, and today we still follow many of the same concepts, but to be tied to a particular legacy may hamper our ability to change with the times."
Reilly expects EWC to be family owned for years to come and added, "The younger generation is finishing their education and entering the business. There is no need for us to change a successful formula that has worked for so long."
BARD MANUFACTURING CO.The Bard Manufacturing Co. of Bryan, Ohio, was established in 1914 by Dale Bard for the purpose of servicing existing coal-fired furnaces. The company is celebrating its 98th year of being family owned and operated, with the fourth generation currently owning and managing the business. The company began manufacturing its own residential heating products in the 1930s, residential air conditioners in the 1950s, and heat pumps in the 1960s. In 1963, Bard introduced its first series of wall-mounted HVAC products, which continues to be the company's primary product offering.
The Bard family members that followed founder Dale Bard have included a second generation of sons Randolph Bard (president and CEO) a Lawrence Bard (engineer); third generation (sons of Randolph) Jim Bard (President) and Richard Bard (CEO), fourth generation Bill Steel (president/CEO - son-in-law of Jim Bard), Pam Bard Steel (marketing communications - daughter of Jim Bard), and Scott Bard (VP, Sales Administration - son of Richard Bard). The fifth generation is still in college and high school.
"After graduating from high school, family members have the opportunity to work during the summer in the office, production assembly departments, and engineering labs," said Pam Bard Steel. "Before a family member can join the company full time, they must be qualified for a specific company need and have worked and succeeded outside the family business."
So family inclusion is not a guaranteed thing at Bard - and there are rules once family members join the business. "Family members in the business and their spouses meet twice a year in a family business meeting setting that is facilitated by an outside advisor," said Steel. "We stress communication and recognize the challenge of nonaligned business priorities."
But she added that the rewards to being a family-run business keeps the family close and supports the family legacy. "It adds an entirely new dimension to the relationship," Steel said. "It also grounds a family.
"There is a sense among the current generation leadership that we are caretakers of the business built by preceding family generations. This legacy atmosphere extends to the community and employees as well. Community stewardship is very important to the company. The Bard Family Foundation has been established to provide support for various college scholarships and area projects. With regards to employees, Bard takes pride in employees that not only produce a high-quality product, but tend to remain with the company for many years."
Steel said that a key to Bard's longevity is that its nonfamily members have been critical to the success of the company over the years. "The majority of the management team, executive team, and board of directors are made up of nonfamily members," she said. "This helps minimize some of the personal issues that may come in to play during the typical family business decision-making process."
That doesn't mean, however, that there is a nonfamily owner in Bard's immediate future. "There are no plans to sell the business to employees or an outside buyer at this time," Steel said.
NATIONAL COMPRESSOR EXCHANGE INC.Richard Staiano began National Compressor Exchange Inc. back in 1978 and within a year and a half had moved it into a 7,500-square-foot facility. Today, the compressor manufacturer occupies a 66,000-square-foot facility in Ridgewood, Queens, New York. He brought his son Jason into the business in 2004, and Staiano said that Jason "has hands in all aspects of the company from purchasing, advertising, inventory, to actually building compressors and more." But Jason isn't the only family member who has worked with Staiano.
"I am a very family-oriented person and am open to bringing family in on the team," he said. "Several years ago, one of my brothers worked with me here before he found his own path and built his own business. We also recently welcomed my nephew into the business temporarily who is currently studying engineering. He is physically working in the factory and works closely with Jason. My brother and nephew have different interests, so they have worked in areas that best suited their skills and interests."
Staiano recognizes that having a family business has its share of challenges and rewards. The challenges include being so close as a family that a lot of work issues are brought home. "Bringing home work can be a problem, but as father and son, we are very close and have a great bond so we actually work very well together because we cover each other in all areas of the business," he said. "While I handle one item, Jason tackles another. His presence here has helped dramatically, and I greatly appreciate his work.
"I feel the greatest reward in having family in the business is being able to share in the growing process and see the fruit of the hard labor we have put in. I can also say that I am confident that the business is being managed carefully and responsibly."
Staiano has seen little conflict between his family and nonfamily workers as they work side-by-side testing compressors. "There is a high level of respect between nonfamily and family here especially since Jason is knowledgeable about the remanufacturing process," he said. "As he works with the employees closely, it demonstrates to them that he is familiar with their needs and understands any issues they may encounter in their departments."
To Staiano, leaving a legacy is important because of his role as father and founder of the company. He is proud of his son's contributions to National Compressor and hopes he can carry on the family tradition. "The business is something that I have worked on most of my life, and it will be passed down to someone close to me," he said. "It is very gratifying. This legacy has become more important to me since my son showed interest. Of course, when a parent sees their child's interest in something that object or project becomes important to the parent, too.
"Our customers are our priority and keeping this business in the family is more motivation to give them the best."
Because Jason is so involved in the business and committed to its customers, Staiano sees National Compressor remaining in the family for the foreseeable future. "Before Jason and I discussed his interest in working with the company in 2004, I didn't expect to keep the business in the family," Staiano said. "However, in such a short time, Jason has become an integral part of National Compressor. He has learned and invested so much of himself in the business that at this point there are no plans to sell to any outside buyers or employees. I, also, will continue to be involved in the executive and technical aspects of the company and be supportive in Jason's growth."