AS HE SAT at the diamond counter after an especially crazy Saturday at Hoffman Jewelers, David Hoffman thought about how rare it would be today to be a fifth-generation owner of his family’s business … if he made it that far. Yes, the meetings with the accountant and the attorney and even the banker had already happened, and the paperwork was already started, but the plan was for the process to play out over a five-year span — and barely one year in, David wasn’t sure he could tolerate even another day!
ABOUT REAL DEAL
Real Deal is a fictional scenario designed to read like real-life business events. The businesses and people mentioned in this story should not be confused with actual jewelry businesses and people.
ABOUT THE AUTHOR
Kate Peterson is president and CEO of Performance Concepts, a management consultancy for jewelers. Email her at firstname.lastname@example.org
David grew up like his cousins and most of his friends, in what he always considered a “spirited” home. He and his parents and his older sister all loved one another, but it seemed that even the simplest of conversations happened at 90 decibels — and real disagreements were often enough to rattle the roof. He never really thought much about it as a kid until he saw how the dynamic played out in the store when he started working with his parents and his uncle as a high school student. When he came back to work the summer after his first (strangely quiet) year away at college, David thought that seeing his uncle and his father get into it over the best approach to a repair or his mom try to school the men about how to handle a problem customer was like watching a bad, old comedy show. That summer and the several summers following, he learned how to use his own brand of comedy to defuse uncomfortable situations and to keep things on a reasonably even keel. He understood why his sister had chosen to go law school and avoid the family business entirely.
In 2016, after four years of college, a year at GIA, and three years working as a salesman then manager for a high-end store in California, David came back home to work for his mom and dad. He would manage the store while they started cutting back hours and prepared for his transition to next-generation owner. The first year was much like he remembered: loud, boisterous and often uncomfortable. He tried talking to his parents about the need to present a more professional atmosphere, and while they would get better for a few days, it never took long for them to revert to their near-constant bickering, and for his dad to find something else to complain (loudly) about.
It was near the beginning of 2019, when his uncle retired, that David began to notice significant changes in his father’s behavior. His usual verbal volleys started to sound more sharp and critical, bordering on abusive. This presented a real problem for David, who had hired several new people over the previous year to replace retiring employees. The outbursts directed at David and his mom seemed to be getting especially harsh and more frequent.
David’s younger team was doing a great job of drawing new customers to Hoffman’s, but they had little patience for his father’s tirades — especially when they were directed at David, and especially when there were customers in the store. That particular Saturday had been especially challenging. The first customer of the day had come in to pick up a repair that was not ready as promised, prompting a blistering dress-down of the jeweler. Then, later in the day, the senior Mr. Hoffman interrupted the store’s top salesperson in the middle of a diamond presentation because he didn’t like the way she was holding the tweezers. The woman dared to challenge him after the customer left, going back to his office to tell him that he had embarrassed her in front of her customer and asking politely that he not interrupt her again. He told her that since it was his business, he would interrupt whenever he wanted — and that if she didn’t want to be embarrassed, she should stop being a moron and learn to do her job properly. Unfortunately, he was speaking at a volume that had his voice carrying throughout the store. Mortified, the employee told David she needed to take a walk and collect her thoughts. When she came back to the store just before closing an hour later, she told David that she had talked with her brother (an attorney) who said that she needed to lodge a formal complaint with her immediate supervisor. He told her that what she was describing clearly constituted a hostile work environment, and that the company had an obligation to make it stop. She said she didn’t want to resign, but that she really couldn’t take the abusive tirades anymore — and she wasn’t the only one who felt that way.
David clearly did not want to lose his top salesperson, and the words “attorney” and “hostile work environment” raised a major red flag for him. He had had more than his share of “don’t take it personally – it’s just the way he is …” conversations over recent months and he was just out of patience. He couldn’t help but feel that any attempt to talk with his father would be futile — but as a manager, and as a minority owner of the company, he knew he had to do something before they lost their whole team, got sued into oblivion or both.
The Big Questions
- Is Hoffman Jewelers in any real danger?
- Could employees actually sue the company over being yelled at — or over owners yelling at each other? What can he do to save this employee and to calm the rest?
- Is there an approach David can take that might be effective with his father now, or should he wait until he owns enough company shares to fire him?
I lived through a similar situation with my dad who was half in the bottle every day by 10 a.m. I had to read him the “riot act” on more than one occasion over a couple of years. History kept repeating itself until I planned a day for all the staff to pull a no-show. He was in the store alone that morning and called me asking where’s everyone at. I told him it’s a planned walkout until he gets his act together. He can enjoy a friction-free environment all by himself … customers notwithstanding. Being of a sound business mind, he fell in line, and the small staff of four people, including me, never had another embarrassing, awkward or unprofessional encounter caused by him again.
David should sit down with his father and let him know about the attorney and the potential lawsuit. He needs to present this in a way that does not identify the employee. He needs to make it clear to his father that if he is expected to take over the business, he cannot risk such a lawsuit. To impress his father with how serious this is, he needs to insist on a specific plan of transition within a short period of time. He needs to find out if he can be given the right to supervise all the employees immediately. He needs his father to agree to limit his duties and to only be at the store a limited amount of time each week.
Some families think nothing of loudly carrying out disagreements, but it is unprofessional and unacceptable in a work environment. I tend to walk away from loud people just in general. I also have no tolerance for people unnecessarily berating and embarrassing others, and I know I’m not alone. I wonder how many customers have walked out of their store and never returned because they found such antagonistic behaviors unacceptable on multiple levels. Sadly, unless they are reading negative reviews about their business addressing that complaint, they’ll never know how much business they have lost for those reasons. They should worry about a potential formal complaint because it IS a hostile work environment. If other employees agree, maybe a staff meeting addressing that issue would help. Or maybe someone needs to videotape one of those outbursts so the parents can see how bad it looks and sounds. Finally, if the father’s behavior has recently worsened significantly, that is an obvious sign of stress but may also be indicative of a health issue that might need attention.
He definitely has a problem, and the issues need to be dealt with immediately. He can’t wait now that a formal complaint has lodged.
Golden Valley, MN
Many older owners spend years in their stores doing what they have always done and younger employees better learn to do it their way. They also fail to stay updated on social trends and laws because they are not part of the social media world. It’s time that David calls in his father’s attorney for a meeting and have the attorney spell out to him that the world has changed and that it’s going to cost him good employees, legal fees, bad press and the reputation of the store if he doesn’t apologize and change his behavior. This news will no doubt make working the store a whole less fun for dad, and he’ll probably speed up his own retirement.
David needs to sit his father down and say, “Dad, when your brother retired, you started to act mean and aggressive. We now have people ready to walk out and a possible lawsuit because of this. Dad, this has to stop. Can you talk with me about what you’re feeling?” David should give his father a chance to work through his issues. If his father doesn’t respond well, then David needs to demand that his father take some time off and come back only when he is ready to follow the rules. David won’t have a store to own if he does not act.
I’m not sure the salesperson can sue. One concern is that she could just simply go to the local press or go work for the competition. Also, their clients could attest to being witnesses of the treatment by the owner. I think David could possibly expedite his parents’ retirement by offering to begin a buyout at a discount. The buyout installments could provide them a retirement income. He could also cover their insurance premium while they are retired. If the parents did want to work, their tasks and hours would need to be extremely limited and not include personnel management. The father could work on days that the top salesperson is not working. The difficulty will be convincing the parents to step back from the store. David could possibly ask his parents to buy him out and use that to open his own store. Or David could help them find a buyer and use his portion of the sale to start an appointment-only office and hopefully build a new business from there.
San Francisco, CA
Well, family businesses! I named my company with the family name; however, my son will not be taking the reins any day soon. So the Hoffmans should feel blessed that they have someone qualified to take over. Hostile and abusive environment … I have been in the business for over 45 years and 20 for myself. Aside from the fact that good, seasoned and competent help is rarer to find than a 5-carat Golconda diamond, all great partners and staff need to be need to be compensated and respected. There are clearly defined laws now that attorneys can exercise and devastate a company that violates them. Dad needs to see the light, and the son does not sign the papers unless there is a clear understanding and a blueprint of procedure going forward. Get help and hire a business coach; don’t do this alone. If you always do what you always did, that’s what you will get.
For David to survive along with the business, he faces a daunting challenge to change a corporate culture deeply rooted in family culture. Ultimately, the business will fail if he loses his key good people and more importantly his customers. It seems like his father’s behavior shows no sign of improving, and it doesn’t seem like he’s ready to transition to David or retire. The only option is to force his father’s hand by giving him an ultimatum. One of them has to go. A minority ownership in a failing business is a losing proposition with no light at the end of the tunnel. If his father refuses to leave, he should sell his share and start his own business, poaching the good employees and customers along the way. As extreme as this is, it’s probably the only option he has.
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