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SCOTT MACKENZIE RARELY eats lunch at his desk. Most days you'll find him at the gym, using the hour-long office break to re-energize for the rest of the day.

"I come back so much more productive," says MacKenzie, president of MacKenzie Vault, which manufactures memorial urns in East Longmeadow, Mass. "It's not just about being in the office, it's about having your brain in the right place in the office."

Working out during typical office hours is something MacKenzie's father, Neil, would never do. It is one of many generational issues they clashed over when Scott joined the family business at age 25.

"My father asked how could I possibly run the business or be the next successor if I was at the gym," says MacKenzie, now 31, who also provides gym memberships to the employees who want them. "He just didn't understand."

Like many twentysomethings, MacKenzie learned early on that implementing new ways of running the family business would be met with skepticism from his baby-boomer father.

"The most inflammatory issue in family businesses is work-life balance," says Wayne Rivers, owner of the Family Business Institute in Raleigh, N.C. "It's a generation-gap issue that's a problem even in the most enlightened family companies."

In a 2007 survey of 50,000 undergraduate and MBA students, more than half cited work-life balance as the top priority in their careers, according to research firm Universum. Unlike baby boomers, who were willing to work countless hours to get ahead, their Gen Y children are interested in working smarter, not harder.

For MacKenzie, that meant moving his office to the shop floor to determine what would motivate employees to be more productive. After a year of watching and listening, he established a bowling night, a deep-sea fishing trip and other social perks to boost morale. And when Howard Stern switched to Sirius Satellite radio, MacKenzie brought in receivers to pipe the show into workers' earphones.

"When my dad heard that, he thought I was a crazy person," MacKenzie says. "Whether I agree with Howard Stern's views or not, I knew that was something they enjoyed. I've found that having some comforts at work that you might enjoy in your personal time can make you more efficient."

And when his father saw the changes affect the bottom line, resistance waned.

"He understands raw numbers — that makes sense to him," MacKenzie says. "We've since doubled and we're almost tripling in size."

Joseph and Katherine Hickson have also seen their family business flourish since their Gen Y children joined Private Garden Greenhouse Systems in Hampden, Mass., a family business that designs and builds customized greenhouses.

Bridging the Gap

How do you navigate the generational challenges in a family business? "You have to be willing to continually invent and improve," says family-business expert Wayne Rivers. He recommends:

Develop a common vision. "If the senior generation is happy with $50 million in sales, but the junior generation thinks the company should be at $200 million, that's going to be a whipsaw," he says. When the family shares the same dream, however, it can energize both generations to achieve greater success.

Clearly define roles and responsibilities. Put structure in place so everyone knows where they stand. Rivers also encourages incentive compensation when specific targets are met. "And if you don't hit the targets there should be consequences, whether it's a demotion, moving to a different department or finding a job outside the family company for a while."

Create new measuring tools. Forget judging performance solely based on work hours. "What difference does it make if the junior member just works 40 hours a week, if she gets the results you want?" Rivers asks. "Why should she continue to work another 40 hours beyond that just because you did it that way?"

Establish ground rules — and stick to them. No one should dominate a conversation. Everyone must listen, then have a chance to speak and be heard. As for big-picture strategy meetings? "Those are sacred; don't miss them," he says. "That has to be one of the ground rules."

Pick your battles. Don't always expect to get your way. "You have to figure out which changes you can stomach and which you can't," he says. "If only the senior generation renders the final decision, it provides no training for the junior generation to come to agreement on their own."

"When the kids would come to the table with ideas, at first there were many times that we would look at each other and say, 'It won't work,'" says Katherine Hickson, 50. "We've had to be willing to learn new ways of doing things, but it's still not that easy sometimes because we're not of that world."

The baby-boomer couple had grown accustomed to working "ridiculous" hours for more than two decades to grow their business. So when their daughter — also the director of public relations and human resources — wanted flextime after having a baby, the discussions became heated. The greatest resistance came from the family's patriarch, though he ultimately acquiesced to the change.

"I never believed that this would happen, but she works harder at home with the baby than when she's in the office," says company president Joseph Hickson, Jr., 50, adding that the business now offers flextime for all its employees.

The family gathers twice a week for lunch meetings to discuss such business matters. All new ideas are put to a majority vote. "One person can't just hijack the direction of the company and that gives us balance," Katherine Hickson says.

Experts say another way to achieve balance among the senior and junior generations is to ensure that family members understand their roles in the business.

"Be very clear about what somebody's job description is, and what the definitions of success are," says Ira Bryck, director of the University of Massachusetts Family Business Center in Amherst, Mass. "You need to be able to draw a line in the sand."

It's a balancing act that requires the willingness to listen before moving forward with cautious optimism.

"From technological advances to personnel changes, it takes time — and that level of patience is a difficult lesson to learn," says Joseph Hickson, III, who at 27 is Private Garden's chief operating officer. "It's a double-edged sword because taking too much time can be ineffectual, but if things change too quickly, you're throwing experience out the window. I think the older generation can teach the younger generation, but still learn from them."

In fact, when approached the right way, experts say generational differences can work in the company's favor.

"If you can temper the enthusiasm and rough edges of the junior generation with the wisdom and knowledge of the senior generation, you get a perfect mix," says Rivers, of the Family Business Institute. "No matter how serious the issues may seem at the moment, if hope and optimism are present anything can be resolved."

As for the gym-loving MacKenzie, he ultimately resolved the differences with his father, who has since handed him the company reins. His father now works only a few days a week, but continues to bring his lunch to work — and can sometimes still be caught shaking his head in response to his son's out-of-the-box ideas. Even so, MacKenzie says he has earned trust and that allows him to grow the business far beyond his father's expectations.

"Having the opportunity to really get to know my father through this process of merging new and old ideas is an opportunity that I treasure," MacKenzie says. "The family business isn't a chore. It's something that I'm proud of, and enables me to love what I do. I'm here because I want to be."