From the earliest stages of the nomination and selection process, we realized that a significant portion of our list would be comprised of relatives of established executives and business owners. Once this became clear, we decided to sit down with their elders to discuss the challenges and opportunities that arise when members of the next generation elect to follow them into the family business.

We quickly learned that, no matter the nature of the business or the role assumed by their progeny, several universal truths apply: There are no shortcuts to success, family members may have to work harder than their fellow employees to prove they belong and, most importantly, their very presence is a good sign the organization is moving in the right direction.

The Ultimate Compliment

When Jim Maxim Sr., founder of Profit By Design — the F&I development company formerly known as Maxim Automotive — received a call from his son, Jim Maxim Jr., asking to join the family business, he was as surprised as he was elated.

“It was one of my most humbling moments,” he says. “Your children know you best, and he wanted to come work with me.”

Compounding the compliment was the fact that, at the time, the younger Maxim was a rising star among the executive ranks of the technology sector, having enjoyed successful tenures at General Electric and Lucent Technologies. Despite the fact that his company’s bottom line had “a few less zeroes,” in Jim Sr.’s words, Jim Jr. was undeterred. “It’s not about the zeroes. It’s what we can make of it,” his father recalls him saying, and their course was set. Jim Jr. was put in charge of a new company, MaximTrak Technologies, which would grow into a leading provider of menu and reporting services.

“The wealth of experience he drew from gave him the ability to think and design globally,” Jim Sr. says. “I’m thankful to God to have a tight-knit family. It’s a dream come true for a father.”

That dream came true twice for Randy Crisorio, president and CEO of United Development Systems Inc. (UDS), when sons Jeff and Brian became full-time employees in 1998 and 2002, respectively. For Randy, the prospect of bringing his sons on board forced him to think long-term.

“We always wanted to grow and get ahead, but I really became aware that I wanted to leave the business in great shape based on what we had built and my family’s involvement in the company,” he says. “I did have the same feelings with employees, but it was heightened by a large margin when family got involved.”

Today, Jeff and Brian both serve as vice presidents with distinct areas of focus. Both worked in the box for dealer clients before joining the executive track, and both have sold and developed new dealer clients, which remains Jeff’s focus. Brian, a marketing expert, primarily works on corporate communications as well as internal strategies and planning.

“I’m already a very lucky guy to have two sons in the business,” Randy says. “But to have two confident, successful sons in the business, for me, is just spectacular.”

For Bill Nisson, owner and president of PermaPlate, the opportunity to work with his son, John, came when John’s former employer, Callaway Golf Co., announced plans to move part of its operations to Mexico.

“I encouraged John to come work for the family business. Callaway’s not a bad job — we’re kind of a golfing family,” Bill jokes. “But he decided that [PermaPlate] wouldn’t be a bad move. He joined the company about six years ago and he has done very well.” The keys to John’s success, his father says, are his work ethic and humility, coupled with a productive partnership with the company’s CFO, Brett Hutchinson. “They just seem to be a great duo. They’re bringing in business and crunching the numbers. I never thought I’d be doing this well, and then the kid came in wanting to do just as well. It’s been great to see him succeed.”

Working Overtime

Bill Nisson notes that it wasn’t he who nominated his son for inclusion in this issue. “I had nothing to do with it. It was his team that put him up because of how well he’s liked.”

John Peterson, the former principal of The Oak Group, says hard work, among other qualities, helped his nephew, Eric Peterson, put aside any fears or perceptions of an unfair advantage.

“Eric rose to the challenge,” John says. “I could lay many accolades on him — hard work, devotion, his empathy, his honesty and everything else. He’s a great, great guy, and Oak was very fortunate that he came to work for them.” If Eric did have an advantage in his rise to the rank of executive vice president of sales, his uncle says, it was the fact that his father served as general manager of several dealerships when he was growing up. “He loves the car business. His passion for the car business gives him a good head start over other people.”

When the possibility of Mark Thorpe’s son, Garrett, joining him at The Impact Group was raised, he was determined to involve his staff in the decision early enough to head off any charges of nepotism.

“Everyone was in favor, but also not exactly sure how it would work out,” Mark says. “In our case, it was easy, because Garrett was determined to learn and grow and the staff saw his dedication and hard work.”

“As a family member, you have to work twice as hard and not just follow the other family member’s success,” says Tony Wanderon, president and CEO of National Auto Care (NAC). “Be proud of where you came from, but set your own path to success.”

Wanderon’s son, Spencer, graduated college around the same time Tony and his sister, Courtney, were launching Family First Dealer Services (FFDS), which merged with NAC in 2013. Tony worked for his own father, he adds, and his wife, Christine, has been deeply involved in the venture as well. He believes that, when welcoming the next generation into your business, it’s important to look at the situation from both sides.

“Remember that it’s hard to work for a family member,” he advises. “Remember that you were most likely very similar, if it’s a son or daughter, and you may see things that they do that remind you of both the positives and negatives of a younger you. … Lastly, just because you are a family member does not mean that you will take it over. That’s something that has to be earned.”

Today, Spencer serves as NAC’s Northeast regional sales manager, and Tony says the “mutual respect and patience” shared between father and son has helped make the marriage of work and family a happy one. “That said, I am a proud dad first, today, of Spencer’s nomination for this recognition.”

Mark Macek’s nephew, Kevin Macek, joined United States Warranty Corp. as a product specialist three years ago after a successful first career as a finance company executive. Mark, the company’s president, is certain Kevin’s future is bright, and it has nothing to do with his last name.

“We put him in charge of ancillary products, and he has done a great job,” Mark Macek says. “He’s been working with vendors and he’s brought a lot of new products to the table.” Considering the company was started by his own father-in-law, Mark says he is fully aware of the added pressure his nephew faces.

“Expectations are higher. The spotlight’s on you a little more. My father-in-law expected a lot more out of me than anyone else, and I expect the same out of Kevin. … We do put higher expectations on family members. I think anyone would.”

“I’ve seen dealers and other people have kids in a responsible position, and they can take it all for granted and really ruin your business,” Bill Nisson says. “They need to bring it. They have dues to pay. They may have to work a little bit longer until they can really prove themselves.”

Enthusiasm vs. Experience

With youth comes enthusiasm, a rare and precious resource that the executives we interviewed agreed should be mined for all it’s worth.

“I don’t know that you should ever mute enthusiasm or passion in anyone,” Wanderon says. “To me, you can teach many things, but you cannot teach enthusiasm. In many cases, letting it go allows everyone to learn how much is needed.”

The passion for technology and relevant experience Jim Maxim Jr. brought to the table were intrinsic to the development of the original MaximTrak menu, and the timing was perfect, according to Jim Sr., who says he had experimented with other menu providers who he believed had failed to fully capitalize on what was still a relatively new concept.

“When I first heard of menu selling, I thought I’d died and gone to heaven,” he says. “The idea that we could present all the products to all the customers and have proof we did it was a very unique idea to every vendor. … Jim was able to bring the training and processes that we needed as a small company.”

“I don’t micromanage. If they have some good ideas, I let them run with it. If they fail, that’s fine,” Macek says. “Believe me, I’ve brought stuff to the table that hasn’t panned out. But that’s the way to do it, in my personal opinion.”

John Peterson would agree.

“I say let them make decisions — and discuss the intended possible positive and negative outcomes — but let them make decisions,” he says. “Decision-making is an important part of management training.”

“Everybody has their own ideas,” Crisorio adds. “They’re individuals as well. I think Jeff and Brian respect the experience I have and I now respect the experience they have. I can tell you that, when they were 14 and 15, they were etching cars on lots with stencils. They’ve been around the industry for a long time.”

“Anyone who has grown up in a family where the dinner conversation is about the business knows exactly what the reality of that business is,” Mark Thorpe says. “In our case, I think there is a great continuity of understanding between us. If anything, Garrett has to be the one to hold me back!”

Changing Hands

Welcoming family members into a business often forces the issue of how and when to transfer ownership — without sacrificing the security of one’s own retirement.

“It’s a dicey situation, to tell you the truth,” says Bill Nisson, who is working with his CFO, attorneys and financial planners to create a plan to pass the business on. “We want to build an enterprise that keeps on going. You do that by transferring stock at different times.”

Mark Macek says he and his wife are among several stockholders in U.S. Warranty and describes the transfer as a “gradual process.”

“Down the road, Kevin probably will have that opportunity,” he says. “We reward our key employees with stock options. … It’s not just family members that are going to take this business further. It’s all those who have dedicated themselves to the growth of the business.”

“You have to start with a well-run company,” Mark Thorpe says, noting that, although he doesn’t have a retirement date in mind, he is already confident The Impact Group could run without him. “I’m very lucky that I sincerely love what I do and whom I do it with. But I’m also a realist and know that there will come a time when I’ll feather it back a bit. As that time approaches, we’ll execute our plan for stock transfers, and I’m confident that Garrett and the rest of his staff will be ready.”

The long-term financial stability of the company should be the paramount goal, Thorpe adds, and that requires input from all sides. “Have a clear, agreed-upon plan for where you’re heading. Innovate, innovate, innovate. Finally, learn to let go.”

Randy Crisorio recommends “a good structure by a competent attorney” and, like Thorpe, has no concrete plans for retirement. “I don’t see a drop-off point where I’m going golfing. I like what we do,” he says. “So I will continue to work for the foreseeable future, and I expect the boys to continue to pay me. The company has been quite successful and continues to be. I have every confidence in my sons to carry on.”

Fatherly Advice

Asked what advice he would give to a colleague whose son, daughter, niece or nephew wanted to join their business, Crisorio says he would offer his wholehearted encouragement.

“I would say, ‘That’s awesome. Get them some retail experience so they understand that side of the business. Spend time talking about what you want to do and look forward to their own accomplishments. Give them room to grow in the business. From your side, it will be great as time passes on, because you’ll know the business is taken care of.’”

“For the man that has a son who has the drive, the desire, the intellect, the capacity and the aptitude, why wouldn’t you support it 100% and let him take the reins?” Maxim asks. “Jim has more capacity than any man I’ve ever met in my life. He was able to take all of that and make MaximTrak a global entity.”

Nisson says he would caution other business owners to gauge their offspring’s performance by the same standards they apply to other employees. “I look at the financial statement. I also look at how the other employees interact with them. … You can tell by the personality of the kid and the types of decisions they make. And if they turn people off, you have to do something about it.”

“You have to be sure that the individual is a good fit, has the ability and temperament for the work, and is willing to earn their credibility through growth and hard work, not birthright,” Thorpe says.

“Make them earn it. Set them to a higher standard,” Macek adds. “Don’t show any favoritism. It won’t help you or your company if everyone else has to work harder to advance. Nepotism is human nature. You have to fight it.”

Peterson agrees, noting that applying a “universal” standard of success will secure the future of the company and every employee.

“Allow them to earn their own way,” he says. “Allow them to make it on their own, work hard and achieve something. I think that’s very important. It allows them to be proud of their accomplishments.”