Second-generation Kirk McMillan successfully grew his family’s U.S. company, Twelve Baskets, from $4 million to $50 million annual revenue. Then his brother was invited by his father to join in and decision-making became “complicated.” Learn from someone who has come out through the tunnel of frustration, lack of support, and ultimately burnout and who learned how to survive and thrive.
-You assumed the leadership of your family business right after finishing university. What were the circumstances around it?
I was a senior in college and I was about to start interviewing. I was home for the holidays. After dinner, I was at the dinner table and my parents asked me, “Would you be interested in coming to work for the family? We need help.” And I thought about it, I was like, ok. I’d been working in the business, I had done all the little things you do growing up in a family business. Then I came in and there wasn’t a formal process to say: Here’s how the business runs…I just had to jump in and figure it out as I went along.
– When did you become CEO of the company?
Within four years. I started out without a title. Then I was there for four years and my dad and mom made me the president of the organization but I was already acting in that role without having the title. Because I was already doing the strategies, already putting things in place that needed to be done to change the company.
-How did it feel not to have a job description when you joined in?
I didn’t have an official one so… the people looked at me from a leadership perspective. But my dad looked at me as a son, he didn’t look at me as someone like a partner. I don’t really even know if he looked at me as an employee either, he just looked at me as a son. And so when we would have meetings with employees, suppliers, and customers that dynamic was not working because he was treating me like a son in all of these meetings. So I told him, “Dad you can’t continue to treat me as a son, if this is going to work, you have to start looking at me as part of the organization, as an owner, as a leader of it.” But that didn’t change; he kept doing it so I had to find a way to change it up. So I stopped calling him Dad. In those meetings I started calling him by his first name. And that was a shock for him. But eventually he did change—it took him a little while but he did. The funny part was that it immediately made a difference with the employees, the customers, and the suppliers. They looked at me differently. I call it system shock—I had to shock the system to make it change.
– What were the main challenges in taking over the presidency so young?
I was 26 at the time. The challenges were more strategic challenges because where I was taking the business was strategically different than where my dad was comfortable. So the challenge was trying to marry the risk that is involved with the strategies and getting the family on board with that. So that was difficult whereas my dad and mom didn’t take much risk before. But we had to take more risks to survive, to grow the business. We couldn’t do all the things that I wanted to do because there had to be some synergy between the family and the business.
-And then you grew your family business from $4 million a year to $50 million. What in your opinion has been the key to your success?
Well first, the system shock. Continuing to challenge the business and the employees to do something differently than what they are used to. That was the biggest key, keeping people on edge to grow the business.
Having the buy-in from people collectively as a group was another big key, getting everybody together to move forward. And finally, looking further out time wise. We would look five years out or ten years out and not try to get caught up in what’s happening today to where you’re just reacting to the world that’s happening around you. That was a big culture shift for our business because my dad is a very reactive person. He’s happy when he goes home and he’s put out ten fires during the day.
Another challenge was keeping people motivated and energized, getting them where they are happy coming in to work wanting to do the things that were important.
-How did you feel when your father offered your younger brother a position with the company without asking for your input first?
At first I was angry, it was sort of taken as disrespectful, a lack of recognition for not only the position and work I was doing, but lack of recognition and respect for our relationship. That was my initial reaction to that. But then I asked myself, “Is this a family business?” and I really had to sit back and say, “All right, this is a family business and this may be best for us.” It doesn’t matter so much how I feel about it, I can make the most of this situation and make it as positive as possible.
-In 2007 your company got a very good offer from a competitor to get bought out and your family didn’t accept the offer. That was the first time that you didn’t feel you were in a family business—why?
It’s a big step for the family to say yes, we want to entertain an offer from another company, so you are basically saying that we are willing to give up what we built. And then as we got further into the negotiations, my brother, I, my parents, everybody had individual motivations to sell and they weren’t collective. It wasn’t where everyone was getting together and saying all right, what’s best for the family. That’s when I realized, Is this really a family business? And if it doesn’t feel like a family business maybe I really need to look at doing something else. And I was already feeling this way personally from other aspects because I was losing energy. I was burned out. I had been president of the organization for thirteen years but really running the business for fifteen years. I couldn’t convince my family to get a board of directors so I didn’t have a support network. I didn’t have any support systems where I could get honest feedback.
When I was running the business early on and up until when my brother got there, ultimately I was making decisions as president of the organization and I didn’t really seek my dad’s buy-in on those decisions. I just did what I thought was best and if my dad didn’t like them we would just end up fighting about it some but for the most part he ended up coming along on those decisions. When my brother came in things shifted and it became more of a democracy where decisions weren’t getting made. So I was really getting burned out. My dad and brother would be in alignment and I would be the outsider trying to do things. The business wasn’t moving forward, I wasn’t able to convince them to do things that I thought needed to be done. So now this offer comes in, we agreed to talk to this company and then all the personal motivations started to come out—what people are looking for. I said this just doesn’t seem like a family business. The motivations don’t really seem like we’re looking out for the family long term.
– After 15 years leading the company you decide to pass the baton to your younger brother. How did it feel?
It was a five-year process. It was two years of this very emotional cycle. The self-evaluation of what did I like about the business? What did I dislike? What did I get out of it personally? What were the challenges? What were my successes? What were my failures? Why would I want to stay? Why would I want to go? In that two-year process I just kept evaluating and at the end I realized that it was best for me to leave. For personal growth, for personal reasons that I needed to do something else. So at the end of the two years is when I told my parents; I didn’t talk to them before that period of time. Once I made the decision there was peace. I was happy with it. From that point on whatever I needed to do to help the transition I was willing to do. So my brother and I took on a co-president role for a year but ultimately he was making a lot of the decisions. I took on the CFO role during his first year as president and a year later, I stepped away from the business, realizing that my brother needed me to be away for him to be able to grow. He needed that autonomy to not have anybody to blame and only he himself to enjoy the successes. My brother had been in my shadow for all of his life. I realized that I needed to step away completely so I did and now he’s got the chance to experience that on his own, which I think has been really good for him.
-If you had the chance to do it all over again what would you do differently?
I would have insisted on a board of directors. Looking back I would have found other ways to at least have found an advisory board because I think ultimately that’s where I lost my motivation. I think that would have made a world of difference, probably to the point where I might have had the motivation to stay around. And I would have had the different perspectives and views to where maybe the company could have gone in a different direction and maybe become even better. Also, I would have forced my family to do more communication collectively as a family. Unfortunately the conversations that I typically had with my dad or my mom ended up being business-related. So we didn’t have that connection on a personal perspective. I would have tried to find some creative ways to where the family could have done some things as family. Probably use some outside facilitators to do that. Other than that I don’t look back and have regrets. I had failures over time but I wouldn’t trade those because I learned a lot from those failures.
-Do you have a word of advice for Next Generation members who find themselves going through a similar situation?
You’ve got to find ways to stay energized. And for everybody that’s different. For me what I realized is that I needed a support system that was going to challenge me intellectually, professionally and personally. I didn’t have that so I would say for anybody that’s thinking of running their family’s business or that’s in their family’s business and they’re just feeling overwhelmed in the process is to find that support network. Whether it’s a group of peers, friends, or an advisory board, I think you need an outlet to let things go. You need an outlet to bounce ideas off. An outlet where you can get some validation and support that gives you that strength, that energy to make the hard decisions. For me the hardest part was for a lot of time I made a lot of decisions where I felt like I was on an island by myself. So you really don’t have a basis to say am I doing a good job, am I doing a bad job? People are social; we need people to share things with. To continue to be energized and challenged—that’s the best advice I can give.
What about you? Have you gone through a similar experience? What have you done to overcome it?
Written by Carmen Lence, Family Business Coach and Consultant at http://www.nextgenfamilybusiness.com/