As early as 10 years ago, Rick Doman said he was warning Doman Industries Ltd.'s directors about the need to sell off its pulp operations in British Columbia and restructure what would eventually prove to be a crippling debt load.
"Maybe my views weren't listened to because I was the boss's son," said Mr. Doman, echoing the struggles that many in the next generation face as they try to make an impact on the family firm.
The Duncan, B.C.-based company, now called Western Forest Products Ltd., is still in financial trouble and operating under new ownership. But at the age of 41, Mr. Doman is no longer with the firm his father started in 1955.
Five years ago, his father, the lumber baron Herb Doman, suffered a series of strokes and was forced to resign as chief executive officer. As the elder Mr. Doman lay in a hospital bed, it fell to his son Rick to take control, as he was the only boy in the Sikh family that had been involved in the Vancouver Island lumber industry since 1914.
In nearly four years as chief executive, he had to deal not only with the company's debt problems that required a complex financial restructuring, but also with opposition from family members who didn't think he was up to the task.
"When you are young and the son of the chief executive, sometimes your voice isn't heard as much as it should be," he said.
"It is very common for members of the next generation to find themselves with opinions to offer that are not welcome," said David Bentall, a Vancouver-based consultant to family businesses and chairman of the University of British Columbia's Family Business Centre.
Mr. Bentall is intimately familiar with intergenerational issues in family businesses. In the 1980s, he was at the centre of a painful dispute between his father and uncle over the future of the Bentall Group, a Vancouver real estate developer that had been run by the two men for more then four decades.
His father wanted the company to remain private, with David taking control, while his uncle wanted the company to go public with no family management. In the end, they couldn't agree on a common direction. So they went their separate ways and split up the business.
Mr. Bentall says people like Mr. Doman are often the victims of a cluster of factors that combine to prevent power from being vested in the next generation.
One of the issues that arise is the older generation overshadowing the younger one. They must contend with the fact that the patriarch has become successful because he learned how to consolidate power and authority, to be decisive and to provide leadership, he says.
"Transferring authority to the next generation is almost the antitheses of everything he has had to do in order to be successful," Mr. Bentall said.
Company founders form an emotional attachment toward strategies that allowed the company to succeed, making it difficult for the next generation to make changes.
Another factor that prevents decision-making authority from being handed down is the wealth that families create in their own companies. This accumulated wealth can be a source of conflict because the older generations are sometimes loathe to entrust their financial well-being to the decisions of less experienced sons and daughters, Mr. Bentall said.
Family-owned companies must try to make adjustments in order to deal with these factors if they want to keep the business in the family. For instance, Mr. Bentall advises families not to have all of their wealth tied up their own company.
But younger generations, too, need to take steps to make a smooth transition to power. For instance, they should be prepared to gain some experience and credibility by working outside the family firm, otherwise they risk being seen as no more then an inexperienced trainee by their peers.
Karen Flavelle, for example, now the president of Purdy's Chocolates, first built a career in marketing with the Swiss Chalet restaurant chain before she bought the family company from her father in 1997.
One of the biggest problems family-owned businesses face is unclear succession planning.
Even though he got his start by sweeping out the Doman family's lumber yards and later became a member of the company's board, Mr. Doman was "kept out of the loop" when it came to the subject of his father's succession plans.
"I assume that he had an agreement with some of the other board members," he said. "But I was never made aware of it."
The fact that he was kept in the dark about his father's succession plans made him reluctant to replace his father, until a senior board member convinced him that if he didn't take the job, the company would be liquidated and 3,000 forestry workers would lose their jobs.
"The founders of family-run companies are often very driven, self-motivated people," and the success of the enterprise is often attributable to that, said Josephine Nadel, a consultant with PricewaterhouseCoopers' who specializes in family business issues. "But that can sometimes be a double-edged sword," she said. "If something happens to the founder and there is no succession plan in place, it causes intergenerational conflict among members of the family."
Although Mr. Doman was asked by company stakeholders to step in when his father became ill, after he became CEO, he learned that some family members were not behind him. He found this out when he read in published reports that he had allegedly begged his mother to allow him to take over before his father thought he was ready.
Mr. Doman denies that he ever made any such request and says he doesn't expect to have "strong relationships" with some members of his extended family.
But this may not have happened if everyone in the family had been kept appraised of the company's succession plans. Francine Carlin, a consultant with the Canadian Association of Family Enterprises said the succession process often goes askew because CEOs are so focused on operational issues that they forget to take a long-term view.
"A lot of this can be avoided if people sat down early on and looked at what is going to happen 20 and 30 years down the road," she said.
Mr. Doman said he now recognizes that anyone considering taking charge of a family firm should think twice before accepting the job, especially if they sense they don't have the full support of their family and the board of directors.
When his company resumed normal business after restructuring its debt in 2004, Mr. Doman was let go by its new owners -- a bondholder group that took control after the company filed for court protection from its creditors.
The experience has left him gun shy about going into business with members of his family again.
"Whatever I do next, it will be on my own," he said, discussing plans to start his own lumber-trading firm. "There will be no family involved."
Mr. Doman can hardly be blamed for taking that view, says Don Prior, a managing partner with Caldwell Partners, Canada's largest executive recruitment firm.
"People in family businesses have to work twice as hard to overcome what some perceive as the silver spoon syndrome," he said. "[And]that is not easy."