Leader's generational transition Based on trust
By Kristine Ellis -- Casual Living, 11/1/2009 12:00:00 AM
Giving up the reins isn't always easy, especially when it involves parents turning those reins over to their children and when the cart involved is a business 30 years in the making.
If there were a template for such an event, however, it just might resemble the generational transition now underway at Leader's Casual Furniture.
Industry icons Jerry and Linda Newton have built an international, multi-divisional company since opening their first outdoor furniture store in 1979. Today they have 19 showrooms, wholesale and commercial divisions, and an e-tail business.
Ready to experience more of life beyond the business, the couple began a few years ago transferring leadership responsibilities to their daughter, Tami; son, Tim and daughter-in-law, Ashley.
"We've seen too many times where the existence and personality of a company depended on its proprietor," Jerry said. "That's not the case with Leader's. We are so fortunate that Tami, Tim and Ashley share our passion for the business and our respect for the people. Equally important, they have all earned the respect of our staff."
The transition hasn't been without challenges, but from all accounts the Newtons have made it with grace, humor and common sense.
Following their parents' footsteps
Like many children of owner/operators, Tami and Tim grew up in the family business — sometimes by default. When parents work weekends, it's pretty common that the children end up hanging out in the back room. Tami's and Tim's first wages were a half-cent for each staple they picked up from the office floor when they were barely school aged. As they grew, so did their chores.
Working for their parents was easier for Tami than for Tim. Tami always knew the business was her passion, while Tim admits to feelings of resentment when younger about assumptions that he would make Leader's his career.
"It felt like something I was being forced into," said Tim, now managing director.
His attitude would change over time. When still in college, he began working on the sales floor and found that he enjoyed it. He then was given the responsibility of turning around a failing showroom and was hooked. But he still had to prove himself to the staff who had been there long enough to remember his previous lack of interest.
"My biggest challenge has been earning the respect of the staff. I've definitely had to work hard so they would believe in my decision to come back," said Tim, who started working for Leader's full time in 2001.
Tami also had to prove herself.
"I never wanted to be looked at as the bosses' daughter," she said.
By 21, Tami was working for Leader's as a sales manager doing whatever was needed, from sales training for new hires to refreshing showrooms.
"I was the first impression of the company for some of these veteran salespeople, and there I was telling them about the products we sold and how they should be doing things," said Tami, sales and marketing director. "It took a lot to earn their respect. I had to answer their questions in such a way that they knew what I was talking about and that I was there to help them."
As first an employee and then a daughter-in-law, Ashley's move into a leadership position has also been about making the job her own.
Ashley started her career at Leader's in 2003, working for both Linda, who was in charge of purchasing, inventory control and advertising, and Tami, who by then was managing the wholesale division, Palm Springs Rattan & Garden Classics. A friend of Tim's since college when they met when both were studying mechanical engineering, Ashley didn't know what she wanted to do as a career when she first interviewed at Leader's; she just knew she didn't want to work with engineers all her life. The interview with Linda and Tami changed her life.
"Linda just won me over," Ashley said. "I felt like I had something to offer and that it was a company the likes of which I'd never been around before."
Now gradually taking over more and more of Linda's duties, Ashley knows the exact day she felt like she truly had her in-laws' confidence.
"We were preparing for our son's birth [last year] and Linda called me and said that she and Jerry had talked it over and she was going to watch the baby during the week. And I thought, 'Wait a minute, you mean you're not going to be at work?' It was the first time that I felt confirmation from them both that they felt confident about the decisions we were making," Ashley said, adding she still convinced Linda to continue to work a few days a week.
Preparing for succession
Both Tim and Tami believe that the best thing their parents did in preparing them to take over the business was to not only have a strong upper staff management team but also step back and let them make their own mistakes.
"I think that is what has allowed us to have the confidence and know that we can go forward and make the company grow," Tami said. "If we know we have a huge decision to make that could impact us monetarily, of course we are going to run it by them because they have the longevity and experience. But sometimes even then, they will say, 'figure it out.'"
All five Newtons participate in the major decision-making along with their valued staff. While Jerry and Linda have the final say, they don't often exercise it.
"We surely do keep a watchful eye on everything," Jerry said, "[but] as long as the company is achieving its goals and every task is getting done well, we have gradually learned to stay out of the minute-to-minute activities."
It helps that the two generations share a vision. Despite growing to 19 showrooms, Leader's growth has always been more conservative than aggressive. Tami, Tim and Ashley like that model of stable, organic growth.
They all agree that use of technology is the biggest difference between each generation's approach to retailing. The younger Newtons rely on data more than gut instinct to drive their decision-making. They also view the Internet as an advantage, not a threat, while acknowledging that there are still many issues to work out.
"Technology has increased competition, but we can also use it to communicate faster, develop faster and stay ahead of our competitors. We have to take advantage of it," Tim said.
"With the Internet, you are no longer stuck selling within four walls," Ashley added. "You have the opportunity to sell your product to just about anybody who is interested in the category."
Going forward, the Newtons all believe Leader's strengths are the value it offers consumers in quality product and its multiple divisions, which give it financial stability and buying power.
"Being a direct importer and manufacturer is a huge, huge opportunity," Tami said. "We always have new products and we can go to any country and have the confidence of 19 showrooms and 300 wholesale accounts that we are going to flow product and be able to pay our bills every day and on time. That is a huge part of who we are."
Well into the generational transition now, the younger Newtons are comfortable in their roles, and more importantly, in relying on each other's abilities.
"It's probably what's best working with Ashley and Tami," Tim said. "It's comforting knowing that things are being taken care of. I don't have to worry about what they, or other staff members are doing, and that gives me time to concentrate on what I need to do."
Not surprisingly, that trust echoes his parents' experience of years before.
"When Linda and I ran the company, we had very different responsibilities," Jerry said. "There were many days when we hardly bumped into each other. But we had full confidence in the other."
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