Christin Cardone McClave entered her third-generation family business to help bring it to the next level, and ultimately helped execute a sale transaction for the largest private auto parts manufacturer in Philadelphia.
CARDONE Industries has been in existence for 50 years. At its peak, the aftermarket auto parts company employed some 6,000 employees and had more than $1 billion in revenue. McClave had grown up in the family business but ultimately chose to work outside of it. Coming back to it after years in the corporate world, she says, came after a constant back-and-forth over many years about the decision. Ultimately, it took the urging of CARDONE’s independent board of directors to talk her through the process of coming back.
“So, for us, that was really important,” McClave says. “I joined our family board in 2012. And through that process, our directors really challenged me to use my experience outside the business and help my dad who was, at that point in time, talking about retirement. And so, I really felt this obligation to come back and support my family.”
The company, founded by her grandfather and father, didn't employ any cousins or aunts. Having that sort of composition changes the conversations that are had on a family governance level, she says, giving them a lot of flexibility with a tighter family leadership group, something that would have been more of a challenge with a bigger group.
“I don't know how some of these families get through a transaction with all those shareholders having the input into that process,” she says.
That independent board of directors was key, she says. And it’s something that’s rare in family businesses.
“My father, when he took over for my grandfather, was really insistent on putting a board together, starting with a friends and family board and graduating to bringing on independent directors,” she says. “And those directors for me we key, obviously from the mentorship standpoint and also helping me through the process of what does it look like to come into your family business from a career? And, of course, my father had an idea what that should look like, but I really wanted to put a development plan and rotation plan together with the board of directors so that they can really guide my career coming into the business.”
UBS Director, Business Owner Segment Field Engagement Manager Bianca Benedetti-Fang says one of the common issues in family ownership that can complicate the success of the second and third generations is communication. Her mother started her company the year Benedetti-Fang was born. While there were conversations over the years at the dinner table about the business, there were never conversations specifically about how or whether that business would transition within the family.
“Sometimes you need an independent party to be able to say, we know where this business is going,” Benedetti-Fang says. “We know what the challenges and opportunities look like, and they can potentially pinpoint people or a person within the next generation that can help you to get there.”
At the Philadelphia Smart Business Dealmakers Conference, McClave and Benedetti-Fang, along with UBS’s Julie Fox, talk about how McClave’s family managed through being business partners over the years, why they ultimately decided a full sale was a path they wanted to pursue, and how they have adjusted back to being a family, after the transaction. More from that conversation will appear in future Dealmakers articles.