Harden-ed for success

CNY Business Journal (1996+), Dec 28, 2001 by Kropf, Annemarie

With every generation, the likelihood of a family business succeeding grows smaller. Gregory Harden, president and CEO of Harden Furniture Inc., recently told the success story of his family's fifth-generation business. Harden spoke at the Syracuse University Sheraton Conference Center, an event sponsored by The Family Business Center of Central New York.

"I was looking at the Harden story to describe where we are now," he said. "We managed to avoid the scenario of 'the first generation founds it the second generation grows it, and the third generation screws it up.' "

Harden began with a general overview of the 157-year-old McConnellsville company.

"There are some things we've done right," he said, mentioning good planning, a good business plan, and dumb luck. "There are some things we haven't done well, and some things we shouldn't have done."

Harden's speech detailed three different parts of the company's story: its history, Harden's experience - in management succession, and challenges to succession. "That's led to some interesting discussions over the dinner table at Thanksgiving and Christmas," he said to the audience's laughter.

The company's history begins with Charles Harden. He arrived in northern Oneida County in the early 1800s and apprenticed as a bricklayer. For a time, he was interested in gold prospecting. "Gold prospecting is a good way to get into the furniture business, particularly if you're finding no gold," Harden said. Charles and his son, Frank, worked at a saw mill, harvesting timber. By 1844, they were tired of winters in the woods, and started making kitchen chairs, Harden said. This was the birth of Harden Furniture Inc.

Starting small and locally, the company worked on construction related to the Erie Canal, Harden said. During the Great Depression, the business struggled to survive and turned to upholstery. By this time, Harry Harden, Frank's son, was president of the company. During World War II, fabric wasn't available to the furniture industry, so the company made wooden parts for guns instead.

"As a kid, I remember my grandma had a box of these wooden gun parts," Harden said. "She used it for kindling."

With the company's focus diverted to the war effort, the business installed a lot of woodworking equipment. When the war was over, it figured Harden might as well go into the casegoods business. Case goods is a term used to describe various types of cabinetry, chests, desks, bedsteads, tables, and chairs. "So the company went from- case goods to upholstery and back to case goods," he said. Currently, two-thirds of the company's sales are in case goods, while upholstery makes up the remainder.

Harry Harden died suddenly in his 40s, while he was president of the company.

"Just when the third generation seemed to have everything under control, a key person dropped dead of a heart attack," Harden said.

Greg's father became president of the company in his 30s, taking it into the fourth generation. "Business under my dad grew wonderfully," Harden said. Increasing the product line and distribution made the Harden name recognizable in the industry, he added.

As Greg was leaving college, he discovered that neither his younger sisters nor his cousins had an interest in the company. "Here you had a situation where you have kids not interested in the business, which is unusual," he said. "Other multi-generational family businesses would say they have too many interested in the business."

Greg's father wanted him to get experience, and so the young Harden enrolled in a management-training program at Huffman Koos, a New Jersey-based chain of retail I stores. Greg soon became the head of consumer service there. "if you think customers in Central New York are tough, try going Downstate," he said. In the early 1980s, Harden worked as the Huff-man Koos consumer-service representative for southeast Pennsylvania and New Jersey.

Back in Central New York, the company was growing nicely under the hands of five family members, including his father and uncle, Harden said. That was soon to change.

Greg and a cousin joined the company in the mid-1980s. They were the only representatives of the fifth generation in the business. Greg worked as the credit manager at the time.

In 1989, Greg's uncle had a heart attack. In 1991, his father suffered a stroke. His cousin quickly retired, unable to handle the emotional toll, Harden said. "The five people who in essence ran the business, within a year and a half left the business," he said. "We went from a good solid management team to no management team."

Greg assumed leadership of the company. "All you need is one good illness, and plans aren't worth the paper they're written on," he said.

As CEO, Harden's first task was to find people, to fill key positions, particularly finding a good human-resources person, he said. One of the challenges to any family business is finding and filtering qualified people, he added.

Recruiting and retraining nonfamily members is another issue with family businesses. "If a young MBA fills the position, they think, 'what's my career life?' " he said. "They'll never have an opportunity to succeed beyond that level." Harden said his company is able to retain key nonfamily members through stocks. "It's important that there be a buy-sell agreement so you can buy [the stock] back once they retire," he added.