CASE
Real Estate
Development
Partners, Inc.
Dick Randall, president and CEO of Real Estate Development Partners, Inc., arrived
in Pennsylvania after serving in World War II. He had saved a little money, and
together he and his father bought a piece of property and developed it into a golf
Over this same period, several national measures of economic activity in the
industry indicated considerably lower growth rates in both revenues and asset values
of other companies. In fact, Real Estate Development Partners seemed to be growing
at twice the rate achieved by the average performers in the industry.
Although he was very pleased with the company’s record, Dick felt that he had two
major unresolved issues. First, he questioned whether, given the size of his estate and his
age, he could do enough to avoid extraordinarily high estate taxes. Second, he was
uncertain as to whether his five sons and daughters would get along well enough to
allow the family-owned business to continue to a third generation (Figure 1). He felt
strongly about keeping the business together. Because of the expertise and economies
FIGURE 1 Randall Family Tree
Van Laura
Dick
68
Sandy
66
2FAMILY BUSINESS
family and also to work in a more caring corporate culture. Amy and Deb also went
to work for other companies. Amy had returned recently and assumed responsibilities
in the marketing department. Thus, four of the five siblings (all except Deb) were now
working in the firm. They had very different positions and, as managers, limited inter-
dependence. Most of the need for communication and coordination seemed to
emerge around strategic and ownership issues, not the day-to-day running of the
AN ACTION RESEARCH CONSULTING PROJECT
AND THE RANDALL FAMILY
Because of Dick Randall’s concerns regarding the future of the family-owned business,
he agreed to participate in an action research effort to discover just how ready he and
his family were to transition the business across generations of owner-managers. Given
his dream of continuity, he had to prioritize the issues to be addressed.
A family-business consultant visited the offices of Real Estate Development Part-
ners and met with and distributed copies of a family-business survey to family members
active in the business, several key nonfamily managers, and several family members who
REAL ESTATE DEVELOPMENT PARTNERS, INC. 3
TABLE 1 Action Research Results for Real Estate Development Partners
Family-Business Survey Results
1. The CEO is very satisfied with the company’s current results and its track record and believes
he has only two major issues in front of him: estate planning and planning for succession.
5. Family and nonfamily managers agree that those who would be involved do not know the
standards and processes through which succession will occur.
6. Family managers do not perceive the company as having an effective board of directors or
advisors.
7. Nonfamily managers do not perceive the CEO as delegating authority and responsibility and
letting people do their jobs.
Family Survey Results
1. Family members (both active and inactive in management) agree that the family does not hold
family meetings on a regular basis. (But there was a wide range of answers, indicating some in-
and out-of-the-loop dynamics at work. More than likely, family members who work at Real
Estate Development Partners meet more often and therefore feel more in-the-loop than family
members who do not.)
2. Family members do not agree that the standards and processes through which employment in
4FAMILY BUSINESS