Technology challenges family-owned businesses

Technology challenges family-owned businesses

When Tom Apicella Sr. bought Shane’s Office Supply in 1989, sales staff handwrote all the order forms and three times a day phoned in orders to the distributor.

Times have changed, and today a computerized order entry system handles the process for the Downers Grove company. But like many family-owned businesses, Apicella initially resisted the new technology.

“The cost was a big issue for me,” he explained. “The system was pricey when it first came out. Tom (my son) had to convince me that it would be worthwhile. His persistence was really what got me to change my mind about it. He had to prove to me that we needed this to grow our business.”

Doug Apicella, who took over from his brother Tom as vice president of operations for the company, confirmed that his dad takes an “old school” approach to running the family business.

“Our dad wants to be progressive, but he always has a solid pulse on the financials of the company,” he said. “I’m 29, and I grew up with the Internet. I understand this technology. But I don’t always understand the financial aspect with new technology.

“Before I started working with my dad full time, I hadn’t realized the cost of all of these changes. The older generation’s resistance to technology is often just the practicality of the cost of the technology, particularly for small businesses.”

Once the brothers focused their dad on the substantial returns on investment for the new system, they got the green light to purchase it. And by everyone’s account, the system has generated tremendous improvements in efficiency.

Some family-business owners, like Julie and Kent Phillips of Sir Speedy of Naperville, are hesitant to purchase new technologies that quickly become outdated.

“We slow down a little with the new things,” Julie Phillips said. “The younger kids say, ‘Wow, it’s new and cool and let’s use it right away!’ But a month later, a new one comes out. So we do have to counter-balance each other a little bit.”

When Sir Speedy’s franchise developed the innovative Personal Marketing + system, combining traditional direct mail with personalized web pages and e-mails, the Phillipses had the option of whether or not to implement it. Without their son Kyle, vice president of sales and marketing, they probably would have said, “Forget it,” Julie Phillips admitted.

But the younger Phillips understood the value of the new product.

“It took long hours of explaining the process and the benefits of this new technology to get my parents to adopt it,” he said. “I had to explain that this is the way the industry is going.

“They’ve been running this business for 24 years. They’re smart and successful, but I helped them realize that we’re no longer just a printer,” Kyle Phillips added. “They’ve had to change the way they think of their business. It’s not just order-taking any more.”

Julie Phillips echoed her son’s sentiments.

“I took Kyle to a few seminars about the new system,” she said. “I could see the excitement on his face, that this was where the business was heading and what our customers would want. It made me see this in a new light. And so far, it’s been successful for us.”

Some companies, like the newly formed Emerald Frog, a specialty coffee retailer based in Elgin, see technology not as a challenge, but as a very clear division of labor.

After selling his successful coffee service about a year ago, CEO Bruce Pellegrini wasn’t ready to get out of the game just yet.

He had the core idea of selling micro-roasted coffee and knew that an online presence would be vital for such a business. A self-described “computer illiterate,” he turned to his daughter and freelance marketing consultant, Karen Pomazal.

Pomazal knew plenty about technical terms like meta tags and search engine optimization, and not only set up the Web site for the new company, but she also used technology to sway her dad in a few other key business matters as well.

“I believed that offering fair trade certified and organic products would be an important part of our branding,” she said. “When I suggested it to my dad, he shrugged it off.”

So technology savvy Pomazal quickly developed an online survey to poll their customers on the issue; she got back about 50 responses that generally supported her opinion, which convinced her dad to offer the products.

E-mail marketing also took Pellegrini by surprise. He was skeptical when Pomazal suggested it, but he ceded to her understanding of the market (the fact that it was cheaper than postal mail helped, too). The e-mail campaign spread the word about the fledgling company and soon started generating sales on its own. Pellegrini was impressed.

“I was 25 years old when I started my first coffee business. Back then, starting up a new company was much less complicated. Now there are many more hoops to jump through,” he said. “So I rely on Karen. I tell her what I think we need, and she gets it done. She’s terrific.”

Beth Carter, Contributing Writer

Posted on Monday, July 21, 2008 (Archive on Monday, July 28, 2008)
Posted by jstoltz Contributed by jstoltz

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