The succession plan for a business can seem daunting, involving a lot of mulling over who is best-suited to run your business in the years that follow your exit. For some organizations the transition is simple, but for others, the change can become convoluted.
A fair amount of copier dealerships are family owned and operated. Pondering the inevitable change in leadership, from generation to generation, is at the forefront of running these businesses. CEOs, presidents and VPs may spend their time instilling the company culture in those who will take on their role in the future; this could be a brother or sister, child, niece, nephew, cousin, etc. Despite these inevitable changes, the culture of the company must remain the same for the sake of the employees, who ultimately rely on the stability throughout each generation.
Some may think, “If it’s a family run business, succession must be simple.” That is not necessarily the case. Sure, those next in line for the company can — and often do — accept the leadership role. If this is the case, however, how is it kept fair for other relatives? Sometimes, no one in the next generation will want to run the company, but will still want to own it. What happens to the company’s culture and morale then? Moreover, it’s not a given that the family will want to take on an ownership role in any capacity, so who will be entrusted with the business from an outside party?
Some dealerships are currently pondering these leadership transitions or are in the process of making them happen. Luckily for them, resources are available to make things easier. The Business Technology Association (BTA) recently held an informational and insightful panel on the topic of dealership succession planning.
The dealer panel was headed by five business leaders from two generations, each having experience with the succession process themselves. It’s safe to say each person has his or her own perspective on the process, leadership transition, direction of business and overall impact of a family owned and operated organization, so attendees heard stories from all sides and learned how to avoid possible missteps within their own businesses.
Todd Lee, vice president of sales for Wells Fargo Equipment Finance, led the panel and asked hard-hitting questions: What do these leaders do to prepare their employees for this change? How does the family hiring process work? How do they keep the business alive from generation to generation?
Jonathan Garlow, president and CEO of Ford Motor Machines, spoke about joining forces with his father nearly 10 years ago. The transition process was ongoing and had a lot of moving parts that needed to be fleshed out. “Make sure you talk about it,” he advised. “If that transition happens and you’re not prepared for it, I think that is a big hurdle to overcome; it’s a big speed bump.”
This led to another discussion, which is an issue for some family run businesses: How do you keep employees on board with the succession?
Kelly Office Solutions’ President Tim Renegar, who was a panelist alongside his sons Blake and Brice, hit on that. “I think we [Kelly Office Solutions] spoke to that, and are making sure the boys are very interactive with the employees,” he said. “Everybody expects them to be the next thing, and I think the employees are extremely happy with that thought. The concern is, ‘If they’re not gonna do it, who is?’ So, when they see that there’s a plan laid out, there’s comfort in that. And they have a more solid feeling about what their future’s going to be.”
Electronic Business Machines’ (EBM) President Michael Hicks also spoke about creating a beneficial environment for employees with employee stock ownership (ESOP). “If you appreciate employees that got you to the level you are today, please consider or leverage ESOP — it is an option,” he advised. “You are protected financially. It is a path of retirement, and it takes care of the people that, hopefully, have taken care of you to this point.”
Whether or not an organization is family owned, it is tough to endure a big change in leadership. All members of the family should be happy, employees should be satisfied, the community should recognize and respect the work being done, and the business itself should remain successful.
Navigating succession can be tricky, but thankfully, associations like BTA are priceless and provide a great business network with a wealth of information.