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Sunday, March 31, 2002

By Joyce Gannon, Post-Gazette Staff Writer

Jack Butler distinctly remembers the call that would thrust him into the top role at his family's company, Butler Gas Products, when he was just 23.

	The Butler family was forced to have a succession plan when Butler Gas Products' founder, Jack Butler, was diagnosed with cancer. His son and daughters run the company today. From left are Barbara Glessner and Debi Butler, both vice presidents, and Jack Butler II, president. (Darrell Sapp, Post-Gazette)

It was Jan. 15, 1975, and he was celebrating his birthday and recent graduation from Boston University with a ski trip out West. He called home and learned that his father, Jack, founder and chief executive officer of Butler Gas, had been diagnosed with a recurrence of colon cancer and given 60 days to live.

As a college student the younger Butler considered becoming a lawyer because he didn't think the family business was glamorous enough. But upon the news, he returned to Pittsburgh, moved in with his parents and reported to work under his father's supervision.

"He taught me the business while I watched him die."

The elder Butler lived two years longer than doctors expected, and, by the time he passed away at age 66, his son was firmly entrenched as president and majority owner of the company.

"We were forced to have a succession plan ... probably more than we wanted to," said the younger Butler, now 50 and comfortably settled in as head of the McKees Rocks-based business that supplies bottled gases to industrial, medical and other specialty users. It employs 34.

For the Butlers, the issue of family business succession came abruptly and had to be addressed quickly. There were two other children to consider too: Barbara Glessner, the company's vice president of human resources and Debi Butler, vice president of sales.

But when their father faced the terminal illness, neither sister was in a position to commit to the business full-time.

"And he didn't want to give us each one third of it," said the younger Jack. "He wanted one of us to step up and do it."

Though most have more time, family businesses should have a crisis plan prepared in case there's a sudden death or chronic illness at the top management level, said Ann Dugan, executive director of the Institute for Entrepreneurial Excellence at the University of Pittsburgh's Katz Graduate School of Business.

Doreen and A. Warne Boyce feel they have properly planned the transition of their family business, Microbac Laboratories, to their son Trevor.(Annie O'Neill, Post-Gazette)

The plan -- much like a will that instructs heirs -- should specify who will be in charge during the first few days or weeks of an emergency situation. That gives the family and board of directors some breathing space to decide who will permanently step into the top job.

The plan should also include the names of key customers, the company's financial statements, numbers for bank accounts, ATM numbers and names of the accountants and lawyers.

Dugan, who runs the Family Enterprise Center as part of her duties, advises clients -- who are family business entrepreneurs -- to construct the crisis plan as an exercise. "Say you're hit by the proverbial bus going home tonight. What do you see as you look down from heaven? You might see employees asking if they should come to work and wondering if they should get paid. Then you'll see managers wringing their hands around the water cooler. Meanwhile, the family's over there in grief. So lay out who's in charge, even if it's on an interim basis."

For the Boyce family, founders of Warrendale-based Microbac Laboratories, the question of who would take over the business was resolved long before Chairman A. Warne Boyce was diagnosed with liver cancer last fall.

His son, Trevor, 41, has been president and majority owner of Microbac since 1993.

Though Warne Boyce and his wife, Doreen, who together started Microbac in 1969, didn't pressure their children to join the family business, both Trevor and his sister, Caroline Boyce, 44, helped wash glassware and sweep floors as young teens and both worked there full-time after college.

Caroline went on to a career as a real estate developer and consultant but Trevor, who said he never wanted to work anywhere but the family business, was groomed in his 20s to run Microbac.

	Kim Tillotson Fleming, right, president of Hefren-Tillotson, Inc. financial services, founded by her grandfather, meets in her office with Susie Barbour vice president for marketing. Fleming was drawn to the family business after a summer internship in college working for her father. (Bill Wade, Post-Gazette)

"I made my first acquisition at age 24 and of course, I paid way too much."

Trevor Boyce credits his father with "showing me the ropes but at the same time, giving me lots of rope. He pointed me in the right direction, but I had to figure out how to get the job done and sometimes I stumbled."

While the family talked informally from time to time about Trevor eventually taking control, it took some nudging from a close family consultant to execute a transfer on paper.

During a meeting of Microbac's board and advisors at the Duquesne Club in 1993, Warne Boyce recalls, the company's longtime accountant, Ted Glyptis, asked when Trevor would take over.

Though Glyptis' inquiry came "quite out of the blue," said Warne, it was logical. Trevor was out of town so Warne and Doreen left the meeting for five minutes, walked back in and announced that Trevor would be named president.

As part of the succession, the Boyces transferred 96 percent of Microbac's stock to Trevor and 4 percent to a senior vice president, Bob Morgan. Caroline, who lives in New Cumberland, Cumberland County, does not have a stake in the company but works as a consultant on its property issues.

Warne Boyce, 72, has remained chairman and was intimately involved with day-to-day operations until his cancer diagnosis. Doreen Boyce, president of the Buhl Foundation, also sits on Microbac's board.

It was a relief to have completed the ownership transfer well before he got sick, said Warne Boyce.

"While I was still active, I thought [Trevor] should do it. The standard of culture has virtually remained intact and the atmosphere has been terrific."

Trevor, who is based in Virginia near his wife's family, said that before Warne's illness he chatted by phone with his father five or six times a day. Now he limits calls to twice a day to discuss the business, which has grown to 24 labs and about 400 employees nationwide.

"He's in a pretty serious battle right now that requires him to be rather focused. One of my challenges going forward is to make up for his lack of presence."

Even for a family business that doesn't have to grapple with illness or death, the succession plan might involve some unexpected choices.

Take the Tillotsons, who own the Downtown brokerage and financial planning firm, Hefren-Tillotson Inc.

The company's 43-year-old president, Kim Tillotson Fleming, picked Northwestern University specifically for its physical therapy program. But after a summer internship working for her father, Willard, after her freshman year, she switched her major to business and economics.

After college she worked as a research analyst and institutional money manager in Chicago and San Francisco for seven years before heading back to her hometown in 1987.

At that point, Fleming and the family brokerage "interviewed each other" to determine what kind of role she could play.

"To be honest, I don't think I really understood the business; it was smaller" than the big firms where she had cut her teeth in the financial sector, including Bank of America and Duff & Phelps.

Fleming, whose maternal grandfather, Art Hefren, founded the company in 1948, came on board without a clear idea about the future.

Meanwhile, her older brother, Craig, 46, was working in sales for Hefren-Tillotson, having joined the business in 1985 after a stint in the construction industry. He's now executive vice president and head of sales.

Fleming, named president in 1996, said her brother's creativity makes him a better fit in marketing while her administrative job takes advantage of her personality and skills.

While the siblings have been accumulating stock in the company, their father remains the largest shareholder.

At 73, he spends three to four months a year in Florida and over the last couple of years has turned over the day-to-day management to his daughter even though he comes to work when he's in Pittsburgh.

"He's been good at letting me or other department heads make a decision that he might not agree with," Fleming said. "I think he's at the point of being comfortable that we have good people."

When she assumed the president's title, there was confusion among employees about who was running the show because her father was still heavily involved in helping her through the transition, Fleming said.

"We had a period where people were not sure who had control of the final decision. Some people automatically went to Dad to make a decision. That's natural. It takes time. It wasn't a bad thing."

As for her own sons, 9 and 12, Fleming isn't sure whether they'll be the fourth generation to manage Hefren-Tillotson. Another consideration is her brother's four children who range from 8 weeks to 15.

"One positive is that my dad never pressured us to coming into the business," said Fleming. "If my children or my brother's have an interest and are suited, fine. But I believe you have to earn the right to be here."

Jack Butler is also unsure at this point whether Butler Gas will be passed on to his 14-year-old daughter or any of his sisters' five children. "There's no tight succession plan; they're too young."

Butler owns 75 percent of the company while his sisters split the other 25 percent. Their mother, Mildred, 85, who managed the company's books for years and who offered lots of counsel to her son over lunch when he took over the company, is still chairman of the board.

The family has thought about the future, Butler said, and is trying to develop a team of managers to run the business.

"We don't want to sell the company, but we don't want to die working."

Sunday, March 31, 2002