Magazine Feature / People

Teaching is a family affair

Frank Schneider, Kim Schneider Malek

Father and daughter teaching duo Frank Schneider and Kim Schneider Malek lead a class on family business at DU's Daniels College of Business. Photo: Wayne Armstrong

Six years ago, a Denver family business was losing money hand over fist as it struggled to pass control to its third generation. Everybody, especially members of the ownership family,was fighting, employees were quitting and the bank was about to pull the rug out from under them.

They knew they needed help, and rather than go with a traditional business consultant, they enlisted the father-daughter team of Frank Schneider (BS ’55 and MBA ’60) and Kim Schneider Malek (MBA ’90), who teach a graduate course called Sustaining the Family Enterprise at DU’s Daniels College of Business.

Frank and Kim combine their areas of expertise at Schneider Consulting Group, a family business consulting firm Frank founded in 1987. They spent a year consulting with the family business, analyzing their financial statements, their management, their personalities, and their dreams and passions. The next year, the family business showed a profit and has improved in profitability every year since.

Today, an executive with the family business says the company could have improved as much with another consulting group, but they would have ultimately failed.

“We would have been profitable, but we would not have known how to work together as a family,” she says. “We would have failed as a family.”

Frank Schneider started concentrating on his consulting work in his Denver-based local accounting firm in1976 after nearly 20 years as an accountant. It soon dawned on him that all his consulting clients were family businesses and had unique dynamics that were affecting the performance of those businesses.  He finally realized that business, ownership and family were fully intertwined and that the family dynamics could not be removed from the business — right after one of those clients fired him.

“The day before the son fired me, I told him, ‘As soon as you quit blaming your father for all the problems, maybe we can make some change,’” Frank recalls.

The moment made him realize he would need more than business acumen to work successfully with family businesses. He returned to school for studies in organizational behavior and development and quickly realized that he needed to learn more about the family system.  He then returned to DU for graduate studies in family therapy through a program affiliated at the time with the Graduate School of Social Work

“It’s been a journey from left brain to right brain that I’m still working on,” he says.

However, Frank’s daughter, Kim Schneider Malek, was a natural right brain thinker. She studied interpersonal communication at Boston University, earned her MBA at DU, and worked for a technology-based university owned by Jones International for eight years before leaving on an 80-day sabbatical in Southeast Asia. Kim had already secured a job with another cable company when she met a man on a plane who asked her to help him and his wife run their business in Basalt.

“I said no, but halfway into traveling, all the businesses I interacted with were small family businesses and I became so intrigued,” she says.

Kim decided not to take the cable job when she got back, and instead accepted the consulting offer.

“When I called Frank and said this is what I’m going to do, he said, ‘This is the problem with consultants: they hang out a shingle, they’re an hour smarter than the client and they do work they don’t have experience doing,’ which was clearly the case. I had never managed or created a business,” Kim says.

So, in 1997, Frank offered to mentor Kim through her first consulting gig. The client was pleased with their work and afterward Kim set out to find a job with a large consulting firm. While looking, she met a banker in Denver who told her if she wanted to work with small family-owned businesses, she shouldn’t waste her time trying to figure out what they do in large businesses.

“And the only credible person in this whole region that I know about who does family business consulting is your father,” the banker told Kim. “Go convince him to give you a job.”

It was a long and difficult decision. Frank, a DU accounting and MBA alumnus who no longer practiced accounting, didn’t know if he could teach Kim everything she would need to know. His wife was concerned about what their working together would mean for the family. But they decided to give it a shot.

Kim enrolled in the same two-year family therapy program Frank completed through the Denver Family Institute and got a crash course in how the language of business, accounting, and the language of people, emotion, lead to performance. “I was well known at DU, president of the graduate business association, and my strength was absolutely not accounting, so professors rallied while I was a student to make sure I learned what I needed to learn,” she says. Father and daughter proved a capable team and have now helped clients in more than a dozen states from coast to coast and border to border and Mexico.

Kim says success comes when a family sets a goal for their business and a path to accomplish that goal that keeps the family whole. That may mean transferring a business to the next generation, or it could mean selling. As far as the family goes, Kim says: “It’s not necessarily tree hugging, Kumbaya singing. It might be just staying out of the courts.”

Often, it means a business is profitable and the family members who weren’t speaking to each other reunite. That’s what Frank calls the Mary Poppins moment: “Remember at the end, the family was back together, the father was back in his job at the bank and Mary Poppins flies off with her umbrella … Success is getting that feeling.”

Frank credits DU for leading him on a path where he gets to have so many Mary Poppins moments. In fact, it was the late Jeff Rothstein, a former professor in DU’s  Graduate School of Social Work who guided him into learning more about group dynamics. Rothstein, who co-taught a course on family business with Bob Zimmer from the School of Accountancy,  was a psychotherapist who specialized in working with family businesses and came from one himself; he was the third generation of a large Canadian pants manufacturing firm.

Frank was a frequent guest lecturer in Rothstein and Zimmer’s course. Five years ago, Ron Kucic, the head of the accounting department, asked Frank and Kim — who was then teaching MBA courses on high performance management — if they would resurrect the class.

Kim loves the irony of telling people that she teaches accounting, even though the class is actually an integration of finance, behavior and organizational development, strategic planning, succession planning, ethics and law.

“It’s a class that hits on an important component of family wealth management that is more than just dollars,” says Bruce Hutton, a DU marketing professor. “It provides a model to meet the needs of the whole family.” Through their experience, Hutton says, Frank and Kim demonstrate a higher level of understanding than others in their industry who talk about family values without really acting in a way that values more than the dollar.

Robert McGowan, who teaches management at DU, is looking at raising the profile of the class because it is so popular and so many students come to DU from family-owned businesses.

“DU is pretty unique,” he says. “There are very few institutions that focus just on that. Family-owned business provides a distinctive competitive focus.”

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