If your family business is going to survive and prosper, the family members running the company had better get along. If they don't, says distribution veteran John Bragg, then you're working with one hand tied behind your back.

Bragg knows what he's talking about. He's the fifth-generation president of N.H. Bragg & Sons, a general-line distributorship headquartered in Bangor, Maine. Bragg's great-great grandfather founded the company 150 years ago, and it has remained in the Bragg family ever since. The company has 70 employees, a branch in Westbrook, Maine, and sells to customers throughout the state and in neighboring New Hampshire. Bragg says that if he and his cousin, company vice president Jon Eames, didn't have an open and congenial relationship, their company would not run as smoothly, or be as successful, as it is today.

"If there's tension or animosity or any of those words, that's definitely going to work against you," says Bragg, who joined the family firm 39 years ago, when his father was president and his uncle vice president. "You've got to feel free to speak your mind and not be subject to criticism. Open and honest communication is awfully important."

Family business experts agree that close family ties and strong working relationships are vital to the longevity of a family business. Nothing will kill a company faster than fighting among family members who can't agree on how to run the company, or in which direction to take it for the future. That's where another vital element of continuity comes in: strategic planning. Without a long-term plan for the future of the business, no amount of brotherly love will ensure a strong future.

Paul Karofsky, executive director emeritus of Northeastern University's Center for Family Business, says close relationships and strategic planning go hand in hand in the family business. Karofsky has been with the Center for 13 years, and also has a private consulting business that works with family-owned companies of all sizes. Though strong relationships are the foundation for success, strategic planning is the road that takes you there, Karofsky says. He tells his clients to start planning for the future now—that means developing a strategic plan for growth as well as a succession plan detailing who will take over the business when the owners retire.

"Looking at a strategic plan [helps you] get a sense of what knowledge and skills are needed so you can create a career development plan for the younger generation," Karofsky says, adding that another important survival element is having an outside board of directors, which he says lends objectivity and heightens accountability.

But that's not all there is to having a successful family business.

"There is another factor: passion," says Karofsky. "It's terribly important. And it doesn't mean you have to love the product…but you have to love the business. You have to love what you're doing, love the people you are working with."

Strong relationships, strategic planning and passion figure in to the success of N.H. Bragg & Sons, but John Bragg says the thing that really stands out about his company is its ability to clearly define the roles and responsibilities of its managers. The roles of president and vice president have always been divided between an inside and outside focus: one person is focused on sales and marketing, the other on operational issues. The strategy has worked for six generations.

"One of the things that we have always practiced is not trying to second guess or meddle in the other person's area of responsibility," says Bragg. "We respect the delineation of authority, and don't try to second-guess anybody else's decision. That really helps."

When Bragg entered the company, his cousin, then-president Clif Eames, focused on sales and marketing, so Bragg filled the void inside, managing human resources, finance, purchasing and the warehouse as vice president. When Clif retired and Bragg became president, Clif's son, Jon Eames, filled the void left by his father. Jon Eames will become the sixth-generation president of N.H. Bragg & Sons when Bragg retires.

Bragg says there's no doubt that strategy has helped company leaders avoid tension that could cause problems within, as well as outside, the company's walls. Karofsky agrees, but says it's not the job of family members to avoid conflict within the business. Instead, he says they need to learn how to manage conflict. Still, having clearly defined roles and responsibilities goes hand in hand with a company's ability to manage itself for the present and the future, he says.

"It's important for the younger generation to develop leadership skills," says Karofsky. "They need to learn what it is to be a leader in a family business. And this involves having clarity of roles and responsibilities."

When roles are clearly defined, it's easier to monitor and plan for the person's development within the company, Karofsky explains. Performance appraisals should be conducted for family members, just as they are for non-family members, and career development plans formed from there.

Rob Lyons and Terri David always knew their place in the family business, TIPCO Technologies of Owings Mills, Md. Their parents, Bob and Jane Lyons, ran the company for 19 years before turning it over to the brother-sister team three years ago. From the outset, Lyons and David have had clearly defined roles: his in outside sales, hers in accounting and operations. And though that's helped them transition to their leadership roles, far more important was the idea that they didn't expect the business to be handed to them. They always knew they had to earn it, says Lyons, who was with TIPCO for 17 years before becoming president. David was with the company for 14 years before being named vice president. The succession planning process began three years before the two actually took over.

"We didn't think we were born into it," says Lyons. "We had to earn it. And it took that 15 to 20 years [of experience] to make that happen."

During those learning years, Bob and Jane Lyons made sure their children did not get special treatment. Their pay was on par with other employees, and their roles clearly defined and monitored, says Lyons.

"Part of the success of a family business is making the employees feel like they are part of the family," he explains. "We worked very hard to try and maintain that [feeling]. We had to be one of them."

That spirit of camaraderie helped when their parents retired, Lyons says, because the company grew so much that he and David couldn't manage it on their own. They had to empower branch managers to run each of the firm's two branches as their own businesses, while he and David oversaw the "big picture" operations. Lyons manages the sales force and the company's long-term vision and strategy, while David is responsible for internal operations.

Another helpful part of the transition: when Bob and Jane Lyons retired, they really retired.

"When my folks left, they left," says Lyons, adding that partial leadership transitions almost never work. "They are there if we need advice, but they don't just stop in and make a change, or force a change. Everything is completely up to us. I think that's what makes it so healthy."

Lyons and David aren't worried about the next generation of leadership; they each have small children who are too young to express an interest in the

business just yet. Right now, Lyons says they are focused on growing the business, hopefully adding branches and eventually owning the company's real estate (they now pay rent to their parents, who own the company's land and buildings). But when the time comes, he says succession planning will start early, just as it did with their parents.

"We realize that hard work and people are essential for growth and survival. Reinvesting money back into the business, and realizing that there is no such thing as a 'get rich quick' formula, has been paramount to our growth and our ability to lead," says Lyons, who is 38; David is 33. "While we are facing very different challenges than our parents faced, I am confident that we will not only survive but we will continue to thrive."

Strategic planning was a vital issue for Scott Parrish just a few years ago, though in a different way than it was for Bragg and Lyons.

Parrish and his father purchased the industrial division of the Keith Simmons company in 1983, adding their name to the firm. Parrish-Keith-Simmons was a successful family-owned distributorship, selling general-line industrial supplies in the Nashville area for the next 17 years. But as the 21st century approached, the distribution landscape began to change dramatically.

Consolidation was rampant, big companies were getting bigger, and the small general-line distributor was getting squeezed. With annual sales of less than $2 million, Parrish-Keith-Simmons was in a tough position: it had to find a way to get bigger or develop a niche market to differentiate itself from the growing competition.

Ultimately, Parrish, by then the president of Parrish-Keith-Simmons and the only family member still with the company, decided to sell. In January of 2000 Parrish-Keith-Simmons became part of Turner Supply Co., a regional distributor based in Mobile, Ala., with locations throughout Alabama, and in Tennessee, Mississippi, Georgia and Florida. Parrish is now vice president, Nashville region, for Turner Supply. He says it was a good move for his company and his family. But the change didn't happen overnight.

"A year prior to that I had realized that as a small, under $2 million general-line distributor, we needed to make some changes," he recalls. "During that period, I went in two different directions: we became a more specialized distributor, filling a niche market where I felt we'd have a better chance of being successful…While doing that, I was taking a look at other opportunities—forming a consortium, merger, or being acquired and becoming part of a larger company…I knew it was important to be aware of the environment and be aware of other opportunities."

Parrish-Keith-Simmons had developed a specialty in materials handling—specifically, selling hoists to Nashville's theatrical market. But in the end, Parrish decided that niche wasn't enough to sustain the company for the long run. Becoming part of Turner Supply was a better way to ensure that what he and his father had built would live on.

"The fit with Turner was very good in that it's a family-owned business, too," says Parrish. "So, we share many of the same philosophies…I also like the fact that we'll be celebrating our centennial next year."

At the time of the acquisition, Parrish's two sons were 15 and 13, so there was no next-generation waiting in the wings to take over. Besides, Parrish says he never wanted to put pressure on his children to join the family firm.

"I never wanted to make them feel like they had to join the business," Parrish says. "I wanted them to make sure that they did what was right for them and their lives."

He says it wasn't difficult giving up the company name, either.

"Once the decision was made, I didn't have a lot of nostalgic ties," he says. "I'm loyal to organizations…and I believe that if I make the choice to make a move, then I want to go in full speed ahead and be a loyal employee of the new company."

Besides, becoming part of Turner Supply opened the door to new resources, including inventory, logistics, technology and capital. For Parrish, the decision to sell was a win for everyone involved, and he says he encourages family-owned businesses in similar situations to consider all their options when planning for the future.

"When we purchased the industrial division in 1983, we never thought in a million years that we would sell it," Parrish says. "But markets change, economic times change, and that decision was good for our now branch location, and it was a great decision for my family."

For Parrish, the decision to sell was one of many options for the future of his family-owned company.

"I certainly believe in family-owned, independent businesses," he says. "I guess my view is to just be creative in your thoughts and not be too bullish. Realize there may be other ways to accomplish what your ultimate goal is."