Setting son.

• Author: Slaughter, Powell
• Position: Reorganization and succession in the family-owned business Henley Paper Co.

Facing an often-fatal illness, Boyden Henley speeds up the reorganization and transition of his family business.

Boyden Henley Jr. has a mind for dates, and Feb. 20, 1998, was one to remember. Henley Paper Co., the 65-year-old Greensboro family business he ran, would complete a transformation he started in 1996.

Henley, president and chairman, had reached an agreement to sell the distributor's printing-paper division, a mainstay for more than 50 years, to focus on its faster-growing industrial-products line - packaging, furniture and maintenance supplies. That winter Friday, it would transfer the inventory to Jacksonville-based Mac Papers Inc. to finalize the deal, setting the stage for Henley Paper's name change to Henley Corp. It had been a frenetic 12 months for Boyden Henley. Under his direction, the $100 million company had restructured along product lines and trimmed its work force 25%. On top of that, Henley, then 64, was grooming his son, A.B. Henley III, then 33, to take over.

Still, he had a lot more than business on his mind that day. Even as several million dollars of inventory from six Henley Paper warehouses in the Carolinas changed hands, doctors were performing exploratory surgery to find the cause of pain and severe weight loss he had suffered since early November 1997.

While his physicians suspected cancer or lymphoma, the surgery revealed neither, so they rendered a diagnosis of chronic pancreatitis - good news considering the alternative. But a CAT scan done as a precautionary follow-up two months later changed their minds. He had pancreatic cancer. He recalls the exact day, April 29. In an instant, the orderly succession at Henley Corp. took on a new level of urgency.

Cancer of the pancreas is one of the most lethal. The mortality rate is more than 95%, 82% the first year after it's diagnosed. While Henley has responded well to treatment and keeps a quietly determined optimism, his condition demanded he speed up his plans to turn over day-to-day management to his son. On May 4, less than a week after the new diagnosis and the first day of the company's fiscal year, he made his son president. Originally, that was not supposed to happen until next September. "You've got to be flexible and deal with what is, instead of the way you want things to be," Henley says. "You can't compromise the company if there's a question of your stamina."

Father and son hit the road to break the news about both the illness and the leadership change to employees. With 180 in six locations in North and South Carolina, there was a lot of ground to cover, but the Henleys thought a memo wouldn't be enough. They wanted to reassure workers that there wouldn't be a leadership void at a time when the company was in the midst of so much change. "Dad's a paternal figure to a lot of people here," A.B. Henley says. "It was real important to him to go to our locations to tell people himself."

The Henleys met with...