Rich with tradition, three family-run electrical contracting firms explain how they’ve remained competitive while passing the torch from one generation to the next
Family businesses from every trade imaginable have been around for centuries — from shoemakers to confectioners to farmers. But did you know that the world's oldest documented family business is a construction company? It's true, according to research conducted by William T. O'Hara, president emeritus of Bryant College in Rhode Island and author of Centuries of Success: Lessons from the World's Most Enduring Family Businesses. As reported in Family Business magazine, O'Hara's study revealed that construction company Kongo Gumi, based in Osaka, Japan, was founded in the year 578. After the company's first job of building the Buddhist Shitennoji Temple, which still stands, 40 generations of the Kongo family have gone on to work in the business. Ironically, 80% of the firm's $100 million annual revenue today continues to involve building and repairing Buddhist temples — more than 1,400 years after it all began.
Although the electrical contracting industry doesn't date back nearly that far, it shows no lack of successful family businesses — many electrical contractors have the business in their blood. But the road isn't an easy one. In fact, according to Family Business Review, a publication of the Family Firm Institute in Boston, only 30% of family-owned businesses survive into the second generation, 12% are still viable into the third generation, and about 3% operate into the fourth generation and beyond.
What's it like to work in a family-run business, especially when multiple family members are in the mix? We've all heard the advice, whether it be from a friend, neighbor, or self-proclaimed human resources expert: Never date a coworker, don't mix work with pleasure, and beware of going into business with friends or family. So can you really work with family members day-in and day-out and still sit down with them for Thanksgiving dinner? The following companies profiled here say “absolutely” and serve as living proof that family businesses can flourish.
Tomco Electric. Dennis Thompson, a second-generation electrical contractor, and his wife Jeanie, founded Bend, Ore.-based Tomco Electric in 1973. Starting out as a small operation, Dennis has welcomed the challenges the electrical industry has thrown his way. With the help of his son, Colby, who now runs the business, the father and son pair has turned Tomco Electric into a successful commercial and industrial contractor.
While raising three sons and three daughters, Dennis admits he didn't push his children to take over the business. Instead, Dennis says he encouraged his boys to work for other people to gain exposure to the electrical trade, learn the ropes, and prove themselves. In fact, one of his three sons took that advice a little too seriously and is now a competitor.
Although he is still the owner, Dennis eventually passed the torch to Colby, who holds a degree in construction management, but not before making sure he'd paid his dues, knowing that the stakes to perform and succeed would be higher for a family member. In retrospect, he says, one of his proudest moments was watching his son gain not only his respect, but the respect of his fellow workers. “I basically had Colby come up through the ranks in other companies to prove himself because any time you're family there's always the attitude [from other people] that you don't have to work as hard because you're the boss' kid,” he says. “I didn't want my employees to think that the kids came in on the upper level here without having to work for it.”
Colby admits in the beginning, trying to fill his father's shoes was somewhat overwhelming. “Probably the hardest part about running a family business is that I personally feel the weight of carrying on the legacy of my father,” he says. “People express their adoration for Dad and for his skill and integrity. This is particularly inspiring to me as I wish to carry out what he has carefully built. But in the early years, it was a challenge to rise to the level of expectation of Dad and overcome the stigma of being the boss' kid.”
As a boy, Colby dreamed of running his dad's business, remembering dinner table conversations filled with expressions of frustration or triumph over business and his mother being there to assist her husband. “Sometimes I could see and feel the concern for the welfare and success of his employees in Dad's eyes,” Colby says.
Colby and Dennis attribute survival of the business to their skill, integrity, and genuine concern for the welfare of their employees, many of whom have been with the company for more than 25 years. It's also revised business strategies to adapt to the changing market by expanding into specialized markets and hiring qualified people. “We have stayed competitive by attracting the most skilled force available to us,” Colby says. “Then we have compensated them fairly and thus locked up the premium skill in the area.”
But during the course of the last three decades, Dennis admits times have been tough due to rocky economic conditions, citing one example he'll never forget — the recession of 1980. “In one year, we went from doing about $2 million worth of business to $350,000 the next,” he says. “What I've learned from that experience is I pay as I go. By avoiding debt, I can afford to cut back quickly, react to the market trends, and not have to break the business to pay off my debt.”
Describing his survival in the electrical contracting business as bittersweet, Dennis also pays a little credit to Lady Luck. “You're proud when you win a large project in a competitive bid situation, but sometimes you realize later that was the biggest noose around your neck,” he says. “If you win a contract for a $2 million job and end up losing $100,000, you wonder why you did it. Construction is a dice game, and hopefully you win more throws than you lose. I guess that's how we survived over the years.”
Seven Sisters. It never occurred to Susan, Christine, Linda, Mary, Julie, Barbara, and Nancy that women don't belong in the electrical contracting business. Their father, William Snelson, taught them quite the opposite. As little girls, they believed him when he told them they could be anything they wanted to be when they grew up.
So when Snelson began phasing out a small electrical division of his general construction company, which was founded by his father in the '40s as a plumbing and heating operation in Sedro-Woolley, Wash., but later moved into gas and water pipeline work, his seven daughters bought it in 1980 — despite some skeptics who though the profession held no place for a female, let alone seven of them.
Starting in the electrical industry in 1973, when she began as a dispatcher/equipment manager for her father's company, Nancy Williams has served as president of Seven Sisters since its inception. Learning the ropes by going out to jobsites with her father's estimator, Nancy took on managing small projects in the beginning to familiarize herself with the electrical trade. Today, her responsibilities include project management and supervision, purchasing, scheduling, and estimating. Her sister, Christine Thompson, is vice president, overseeing financial accounting and budgeting, personnel practices and policies, acquisitions, insurance, and strategic planning. Joining her sisters in 1990, Julie Snelson is the secretary and office manager, responsible for billings, job costing, and changeorders.
Although only three of the girls actually work for the company, Snelson dictated that all seven would be equal shareholders, which has caused its own set of issues for the management team. “My father strongly believed that everybody should get the same; it didn't matter that they didn't work in the business,” Thompson says. “Although that's nice in theory, it can be frustrating because you have certain people working in the company yet every time you make a dollar you have to divide it seven ways. When people ask me what I would have done differently, I say, ‘If I had it to do it over again, I would go into business with my sisters, but if they didn't work, they didn't share.’”
Twenty-four years later, Seven Sisters is proud to have defied the odds and become a successful electrical contracting firm, employing between 50 and 75 employees and specializing in pulp and paper, petrochemical and aluminum production as well as public sector work. Surprisingly, gender didn't seem to play as big of a role in the firm's progression as one might think. In fact, Thompson says once the new owners of Seven Sisters proved themselves on a few large projects, such as the Metro in Seattle, they quickly earned the respect and trust of their customers and peers alike.
Citing some of the firm's greatest accomplishments over the years, Thompson recalls several defining moments. Probably the most memorable year came when Seven Sisters doubled its sales from $5 to $10 million. It also was awarded a grant from an organization in Seattle to receive free accounting, legal, and financial services for one year — an application that ultimately brought the firm enormous resources and publicity. Selected as “Business of the Year” by the Austin Family Business Program at Oregon State University, Seven Sisters also gained the opportunity to share its story through a videotape aired on television — another positive marketing tool.
Although Thompson is confident the company will remain in the family, no succession plans have been made yet. Because the seven sisters have 14 children, ranging in age from two to 33 years old — only five of which are out of high school — only time will tell what the future holds for the next generation of Seven Sisters' heirs. Interestingly enough, another family member, Thompson's son William, joined the ranks in mid-November.
E-J Electric Installation Co.. Considering E-J Electric Installation's historic track record, the odds of this 105-year-old firm making it into the minute 3% of family-owned and operated businesses that survive into the fourth generation are better than most. In its third generation of Mann family management, Long Island City, N.Y.-based E-J is the oldest and one of the most successful independent electrical contractors in the country.
It all began in 1899, when Jack Enright and Theodore Joseph founded E-J during the era of paper- and wood-lined conduits and combination gas/electric lighting fixtures. In 1912, Joseph hired Jacques Mann, who had been working as an electrician and attending night classes at the Cooper Union College in New York — the only place in the city that offered free education for engineers. Jacques went on to specialize in installations at theatrical and performing arts centers. Under Jacques' direction, E-J's expertise in the electrification of entertainment facilities expanded when the motion picture industry began to boom. Coincidentally, the renovation of the Paramount Astoria motion picture studio, which was designed and installed under Jacques during the original construction, was redesigned and supervised 40 years later by his son J. Robert (Bob) Mann, Jr.
E-J had made a name for itself as the foremost shipbuilding electrical contractor in the country during World War II, but soon after that the work began to taper off. Bob, who graduated from Yale University with a degree in electrical engineering, helped guide the company through the transition period. Being able to adapt to the shifting market conditions he says, was one of the company's keys to survival. “We started to try and figure out the best areas for us to compete in,” Bob says. “And that's what we've been doing ever since — trying to be one step ahead of the competition and one step ahead of the new technologies.”
Following in his father Bob's footsteps, Tony Mann came to E-J in 1986, after earning his electrical engineering degree from Tufts University and an MBA from the Kellogg Business School of Northwestern University. As in any other business, Tony realizes that although he, his father, and his grandfather shared many similarities, they also exercised slightly different approaches to business management, a reality that ultimately benefited the company in the long run.
“My grandfather was known for his engineering,” Tony says. “My father came in and really drove the business from a marketing perspective — staying out there growing the business from an external standpoint and pursuing new markets. I think what I've done is put together a management team that's the strongest in the industry.”
Another competitive advantage directly relates to the firm's family tradition and reputation, Bob says. “Our clients know that when they deal with Tony or myself that they're dealing with the owners of the business, not just a manager or lieutenant,” Bob says. “That is very important to a lot of principals and clients.”
Tony agrees. “The family tradition really creates pride and dedication, which is reflected throughout the entire organization,” he says. “Our clients know that we've been in business for 105 years, and it gives them a comfort feeling that we're not only here today but we're going to be servicing them tomorrow.”
Although he and his father are currently the only blood relatives that work in the family business, Tony takes great pride in his heritage and predicts the Mann tradition will continue for years to come. With four young children, ranging in age from one to 10, Tony's plan for the future most definitely involves a fourth generation of Mann leadership. With three girls and a boy, Tony says they all have an equal opportunity.
Parson is freelance writer and editor based in Lee's Summit, Mo.