An initial disappointment with a venture in China wasn’t nearly enough to discourage Bob Randall’s enthusiasm about doing business in that country’s white hot economy.
“I’ve been watching the evolution, particularly in China, over the last 20 years,” says Randall, president and CEO of TRACO Inc., a 1,600-employee window and door manufacturer for the residential and commercial markets. “There’s no question in my mind that they’re the future.”
To get a head start on that future, TRACO Inc. launched a window plant with a Chinese partner in the mid-1990s and a joint venture in 1999 with a major Chinese manufacturer, only to pull out of the country last year when it realized that the deal wasn’t going to work.
Divergent interests of American business operators and the priorities of the Chinese make it difficult for Chinese and American partners to march in lockstep. American business owners want to make money, and the Chinese want to employ as many people and export as much as possible.
And cultural differences often make negotiation and agreement a frustrating process for Western businesspeople accustomed to finality in decision-making.
“You never stop negotiating with the Chinese,” says Randall. “You think you have a deal, and you don’t. They always come back at you.”
Undaunted by the experience, Randall hints that a second move by TRACO into the world’s fastest-growing big economy will come sooner rather than later, perhaps in the form of an acquisition.
“The key is, you have to have the right players running it,” Randall says, and that means having control on the ground.
“Do it yourself, control the deal,” Randall advises anyone considering a business foray into China.
Succession wars
Randall’s determination to make a venture in China work isn’t surprising, given the opportunities to succeed in that country’s economy and his own fascination with Southeast Asia, which has had a grip on him since his undergraduate years at Pitt.
But a venture into China — or nearly anywhere, for that matter — would never have been possible had Randall not been so set on growing the business that he endured a long battle with his father over the direction that TRACO should take.
Randall’s parents started Three Rivers Aluminum Co. in 1943 as a home remodeling contractor and later as a replacement window and door distributor. Randall’s father, E.R., handled sales and his mother, Mae, kept the books.
Randall had little interest in the family business when he graduated from college. He spent two years in law school at Duquesne University, decided it wasn’t for him, and joined the Coast Guard. While at sea, and with no reason he can cite to this day, Randall wrote his father a letter and informed him that he intended to join the business.
When Randall joined TRACO, it had eight employees and $300,000 in annual sales. He worked in the business during the day and sold home improvements at night.
It didn’t take long for the differences between father and son to erupt into conflict. Randall’s father, risk-averse and conservative, didn’t care much for strategic planning or striking out on new opportunities, while Randall, young and aggressive, saw lucrative opportunities for the business to expand and grow.
“I either got fired or quit at least a dozen times,” Randall says.
Those early years, Randall acknowledges, were painful ones. His father tried to thwart Randall’s every effort to grow the business. He even cut his commissions on his home improvement deals, contending that Randall was making too much money.
“It was highly frustrating,” Randall says. “I saw opportunity after opportunity being lost.”
For Randall, the solution was to simply implement his ideas without his father’s consent or endorsement.
“I just started taking control; didn’t ask, didn’t suggest. I just did them,” Randall says. “Fortunately, most of them worked, and gradually, I just moved in and took over.”
As Randall took greater control of the business and began to implement some of his strategies for growth, he and his father reconciled their differences over time. E.R. maintained an almost daily presence at TRACO, even after Randall had taken over the helm, and remained the virtual patriarch of the business until his death at 91.
Because the company had many long-tenured employees who had come along under Randall’s father, E.R. provided an important link between the generations as the company changed and grew.
“He was the catalyst to maintaining the culture through our high-growth periods, being visible, being involved,” Randall says.
Passing the baton
When it comes to family succession, Randall’s experience with his father was sobering. Consequently, he has become more focused in recent years on preparing the company for the next generation and readying his children to take over.
He says he is moving away from the day-to-day responsibilities and concentrating more on business development and customer relationships. And to complete the transition, he has to make sure that the next generation of leaders — family members as well as others — is prepared to take leadership roles at TRACO.
His challenge is different from the one his father faced. The company is infinitely larger and more complex today, and Randall has four children, one working in the business and at least two others with an interest in joining the company.
Son Adam is a student studying finance and international business. Randall is trying to steer him toward focusing on Latin America, where he sees the next great prospect for global opportunity. Another son, Chris, is working at a window plant in Oklahoma, getting a view of another company’s approach to the industry. Randall says he has a two-year rule, an edict that demands that each of his children work at least two years at another company before they join TRACO.
Randall’s oldest son, Brett, is a vice president with TRACO and runs its core business from the company’s Cranberry headquarters. Daughter Robin worked in the business for eight years and recently opted to go into her own venture.
“My challenge is to make sure that Brett, my oldest son, is prepared, and, hopefully, a couple of more kids will come in and we’ll get them going through the process,” Randall says.
Randall acknowledges that no matter how much he plans, there will be unexpected bumps in the road as his children’s views change and spouses come into the picture. His antidote for trouble is open communication between the generations.
“You always have disagreements in business,” says Randall. “They’re healthy, as long as you can manage and handle them properly.”
Regular family meetings, where all are kept up to speed on what is occurring, are one way to keep surprises to a minimum.
Ultimately, Randall says, he and his children have a responsibility to the company and its employees to make sure that they can fulfill their responsibilities and secure TRACO’s survival. For him, there’s no free pass for anyone into the family business.
“I’ve always been vocal about that,” Randall says. “If you’re not prepared, guess what? Go somewhere else, because you’re not coming here.” How to reach: TRACO Inc., www.traco.com
