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"An AMC Story: All in the Family"

Interview By: Stephanie Czuhajewski for AMC Connection, June 2010

A Q&A with Taylor and Kyle Fernley about their family business, Fernley & Fernley, Inc., the first association management company.

T. James Fernley operated a wholesale hardware store in downtown Philadelphia. At the encouragement of several other local hardware distributors, he agreed to form and manage the Hardware and Merchants and Manufacturers Association (HMMA) for the purpose of networking and promoting the group's interests in the business community as well as their interest in combating the "big boys" in the industry.

Today, Fernley & Fernley, Inc., is recognized as the first association management company and represents the birth and evolution of the AMC industry. Below, Taylor and Kyle Fernley answer questions about the organization of then and now.

What is your relationship to the founders and what year was F&F founded? Are there any other historical facts you think readers may find interesting?

Taylor: I am (president and CEO of F&F) the great-grandson of founder T. James Fernley. Kyle is the great, great grandson of T. James Fernley. The business was launched in 1886. Beyond HMMA, T. James went on to offer his services to other trade associations and brought his two sons, George and Thomas, into the business. He steered the firm through the depression, often dipping into his personal funds to keep afloat and foregoing the collection of client management fees for periods of time to get client associations through different periods. After FDR's National Recovery Movement in 1933 mandated that all businesses belong to an association, the company (and the industry) flourished. On the family front, F&F for most of its "adult life" was operated by two different sections of the family. In 1998, I purchased Thomas A. Fernley, III's share and became the sole stockholder of F&F. Kyle has been working off and on as an intern for Fernley since he was 12. He officially joined the company June of 2009.

Who is your oldest client? Describe how that relationship has evolved throughout time.

Taylor: Our oldest client is the Aviation Distributors and Manufacturers Association. ADMA was established when World War II production was at its peak and the government-issued priorities were needed for the procurement of supplies. ADMA was formed in May of 1943, with six aviation distributors and George Fernley, at Chicago's Palmer House. Sixty-seven years later, ADMA is still managed by F&F. Currently, ADMA is 63 members strong and has annual meetings in the fall with 150 industry leaders in attendance.

What are the biggest challenges and greatest rewards in operating a family-owned AMC, and what advice would you give someone who is thinking of doing so?

Taylor: The greatest challenge has been understanding what is on the ever-changing minds of our clients. In years past, our clients' needs and expectations were largely the same. Today, the complexity of the members within our associations is widely diverse and our challenge is to meet all of those needs and do so in the most cost effective manner.

The greatest reward is the ability to have a positive impact on molding the future of industries and the opportunity to provide a forum for associates and employees to grow and prosper in their professional lives. We have a world-class set of professionals at F&F who amaze me every day with their talents and dedication. For those thinking of getting into this business, surround yourself with successful people. Join the AMC Institute and ASAE & The Center. Get involved and learn from the best. Invest in technology and people. And, most of all, do not be risk-averse. Be willing to try new things. Remember, failure is an important component of the learning process.

Kyle, what is your favorite thing about working in the family business (and least favorite)?

Kyle: Working for Fernley, every day is different. There is no routine and that is what makes it interesting and fun. I really enjoy being able to come to work every day with a new challenge on my plate. It helps me grow not only as an employee, but as a person in general. Living up to the expectations that I set for myself as well as the expectations that others set for me is my least favorite. Having Fernley for a last name is the best and worst thing about working for a family-owned firm. From the day you start, you are expected to set precedence for everyone around you. It can be extremely challenging, but at the same time I embrace the challenge because it makes me a better professional.

Taylor, do you compartmentalize relationships and discussions with family coworkers, or do you talk shop frequently at home?

Taylor: I have always been a firm believer of separation of church and state; that is to say, what goes on in Vegas stays in Vegas. Put another way, I prefer not to bring stuff home at night. However, I candidly have not scored well in this arena. In business as in life, it is all about balance. During the course of the day, I work passionately to grow and develop our external customers (association clients) as well as the internal customer (our valued associates and employees). Do I take things home at night? You bet. Do I dwell on that to the point that it is the center of all conversations? No way. I am fortunate to have a wife of 35 years and children who are good listeners with incredibly insightful perspectives. I listen to them intently and then overlay that against the powerful feedback I get from my management team back in the office. They collectively serve as my informal board of advisors that will continue to drive the growth and success of our company going forward.

Kyle: Taylor has been able to successfully separate his personal and professional life. Yes, he has brought issues home in the past, but this is a good thing. Some may even call it therapy. It is in our family's best interest to maintain the success of Fernley, and if that means offering Taylor a perspective on an issue that he may not have seen before, it allows him to view things even more clearly. In the end, we are a family and we support each other no matter what.

What are some of the most significant changes that you have seen within the industry throughout the past three decades?

Taylor: The need to identify and proactively respond to the rapidly-changing clients' needs, the advent of technology. Expectations, for example, in response time have been shortened to nanoseconds. Association management companies have become far savvier in marketing and are now being viewed as a more efficient business model than the standalone arrangement. Association management companies have become far more self confident and are now willing to share information with their colleagues on trends and best procedures. We need to remember that AMC's represent only 27 percent of the market potential. So, working together is to all of our advantage.

Kyle: Technology, technology, technology. I have seen numerous changes in Fernley since I began working here during holidays, summers, and weekends since the age of 12, but never have I seen such requests as I have in the past year for advanced technology. Generation Y has seen such an influx in technology since the early 80's that tomorrow's newest product is old news next week. Our clients are searching for effective techniques and applications of new technologies through the use of social media to drive our new business development and marketing initiatives. Fernley's investment in technology makes this feasible, which in short allows us to retain our clients because they know they are getting the best.

What are the principles or practices that have withstood the test of time and will still be important in the future?

Taylor: The words culture, trust, values, and mutual respect come to mind. Strict adherence to these principles has allowed us to withstand the test of time.

Kyle: Growing up, Taylor coined more one-sentence life-lessons quotes than I can count. One these that really stuck out to me and still does to this day was "as soon as you lose someone's trust, it is lost forever." Many principles will come and go with every generation, but trust will never be lost.

Given what you foresee in the future of the AMC industry, what is on the horizon for F&F?

Taylor: Our company will look completely different in three to five years. We are taking a wholesale look at the AMC model and overlaying it against the expected needs and expectations for our clients today and into tomorrow. We are investing in people and technology. We are continually in search of new and creative reward and incentive programs for peak performers. And, most importantly, we recognize that the AMC model is just coming into its own and has a bright future ahead.

Stephanie Czuhajaweski is vice president of marketing and communications of Symbiotix Management Services, LLC. Email: sczuhajewski@symstrategies.com