January 14, 2013

All in the family

Photo | Pablo Robles
Photo | Pablo Robles
For Dean Stirling, the issue of family business succession planning is all too real. He’s waiting for one or more of his daughters and nieces to show an interest in becoming the next leaders of Stirling Benefits in Milford.
Paul Sessions, director, Center for Family Business, University of New Haven

Paul Sessions and Dean Stirling share a common concern: Family businesses have a rough time handling succession planning.

For Sessions, director of the Center for Family Business at the University of New Haven, it's a concern he hears about often as he talks with Connecticut business owners.

For Stirling, the issue is more immediate — he lives it every day.

Stirling runs a second-generation business in Milford called Stirling Benefits Inc., a third-party claims administrator that designs and manages health plans for more than 200 small businesses, the State of Connecticut, the Connecticut Teachers' Retirement Board, and various Connecticut municipalities.

He and his brother Jamie joined the company in 1985. Dean Stirling, 55, serves as the company's president, and Jamie Stirling, 54, is the CEO.

Their father, George Stirling, started the business more than 40 years ago. He retired in 2001, but stayed on the company's board of directors until his death last year.

Dean Stirling says the next succession for the business could be handled by his daughters and nieces. He and his brother each have four daughters, all around high school and college age.

So far though, none of the girls have expressed an interest in joining the family business. Stirling says he wants the girls to explore other career options before making a decision anyway.

"They know we want them to have at least three years of industry-related work experience outside of our business before they can come to work here," says Stirling. "It's too early yet to tell how it's all going to play out."

That presents a quandary for a company that credits its growth and prosperity for nearly half a century to deeply rooted family connections.

And the Stirlings are not alone.

"Succession planning is a huge issue facing all of our member families to some degree," says Sessions.

Approximately 90 percent of U.S. businesses are family firms, ranging in size from small mom-and-pop establishments to Wal-Mart, Ford and Marriott, according to Sessions.

There are more than 17 million family businesses in the U.S., representing 64 percent of the gross domestic product and employing 62 percent of the nation's workforce.

And yet, studies show that just 30 percent of all U.S. family businesses succeed to the second generation and only half of those make it to the third.

"Succession planning is about looking closely at who is willing, ready and qualified to lead the business next," says Sessions.

"You have to be able to communicate effectively and in some cases, make difficult choices," says Sessions. "It's not always an easy conversation to have."

The Center for Family Business wants to make it easier for families like the Stirlings to succeed.

In addition to its normal lineup of monthly meetings and networking opportunities, the center is offering various seminars on managing and growing a business, along with succession planning.

The organization started in 1994 and is comprised of 50 family businesses located throughout Connecticut. The center offers programs and services designed to address issues unique to family-run enterprises.

Sessions says family members who work together face a unique challenge when it comes to striking a balance between their personal lives and the office.

Traditional succession planning can be stressful, especially as the lines between co-worker and relative start to blur.

Dean Stirling credits the center with teaching him and his brother Jamie how to identify each other's strengths for the benefit of the business.

"A family business will go through various stages of growth and development over time," said Dean Stirling. "The center provides an environment where you learn about the unique challenges of managing a family business."

"When I first entered the family business, I felt I needed to know every aspect of the business," said Dean Stirling. "I later learned the value of relationship building and collaboration."

The Stirling family has been members since the center opened, except for a short hiatus several years ago.

"When my dad retired, we each shared the responsibility, each taking control of small decisions, and collaborating on big issues," said Dean Stirling. "This approach created small mistakes, but strengthened our ability to lead together."

Sessions said the center is looking to grow its membership. Any family-run business with at least two family members is eligible to apply for membership. Sessions declined to discuss how much a membership costs.

"When the center opened in 1994, our members didn't have a place where they could talk about their experiences and exchange ideas," Sessions said. "The center was created to be a safe place for our members to talk about anything."

"Confidentiality is very big in this organization," said Sessions. "Our business members trust each other, which makes it easy for them to share honestly what they are going through."

One of the first things many family-run business members learn when they first join the center is that that are not alone.

"It's a chance for them to learn how to improve their business, exchange information and ask questions," Sessions said. "Our members really value information and ideas they get back from people who have dealt with the same issues they are going through."

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