If you missed last week’s Family Business Alliance event, not to worry, we’ve compiled a recap for you. The event featured a fantastic panel facilitated by Joe Schmieder from the Family Business Consulting Group.
Panelists represented the four generations active in family businesses today:
• Leon Slikkers, S2 Yachts, representing the Traditionalist Generation (ages 72-95)
• Dave Custer, Custer, Inc., representing the Baby Boomer Generation (ages 53-71)
• Nancy Westgate-Sytsema, Wesco, Inc., representing Gen X (ages 37-52)
• Megan Spruit, Grand Rapids Metrology, Representing the Millennial Generation (ages 17-36)
The conversation was organized by the phases of the leadership journey: Growing up, Entering, Advancing and Exiting.
Each of the panelists talked about the importance of family values growing up. Nancy recalled learning the value of hard work at an early age when she and her brother labeled sandwiches for their mother who oversaw the Wesco deli division. Leon talked about choosing to leave school at a young age to run his family’s farm where he learned resourcefulness and innovation—values that helped him build his business from the ground up.
Dave has been intentional about passing along family values through family meetings—something he and his wife started when their children were teenagers. They continue this practice today, meeting every 12-18 months. Now that their sons are grown, family meetings include spouses. Over the course of half a day they talk about the health of the family business, plans for the future and a review of financials. To keep things interesting they leave town for family meetings. This gives them the space to conduct business and spend quality time together having fun.
This part of the conversation focused on policies for entering the family business.
Megan said that she didn’t view working at the family business as an option—growing up her parents focused on education and encouraged their children to pursue their passions. Megan was working for a company in Chicago when a position opened up at Grand Rapids Metrology that aligned with her skills. After many conversations with her parents, she first took a position with a non-competitor peer company to learn the business. After deciding that she liked the industry she filled the vacancy at the family business with confidence and credibility.
Joe reviewed an example of a hiring policy from one his clients and we thought these were excellent points to consider. In his example, to join the family business a family member must:
• Fill a legitimate open position (not a position created just for him/her)
• Have 3 years’ experience working outside of the family business
• Earn a Bachelor’s degree
• Meet the basic hiring criteria
• Submit a letter of interest to the leadership team/board
• Be enrolled in school (if seeking summer employment)
Growth, training, and performance were discussed. Leon talked about the importance of starting at the bottom and working your way up in the business. Leon also mentioned the importance of leadership training. His grandsons have completed college and are now involved in the business. They are part of a cohort of employees going through a leadership training program to prepare them for taking on more leadership responsibilities.
The panel touched on roles in the family business and how a rotation of positions is important for really understanding all aspects of the business. At Custer, Dave’s sons started in sales. Having them work with customers directly was important to their development as leaders.
Other key takeaways:
• Consider a program like Strength Finders.
• Promotions should be performance based, even for family. To help facilitate this, the panel suggested a combination of peer reviews and direct report reviews.
• Mentorships, peer relationships with non-competitors, and or the creation of an advisory board are great strategies for personal development and growth.
• Next generation leaders need to understand profit/loss responsibility, have experience with hiring and firing, and be strong problem solvers.
• Emotional intelligence is also essential to being a strong leader. Interpersonal skills must be part of the grooming process for next generation leadership.
It goes without saying that succession planning can be tricky. When it came time to choose his successor, Dave looked focused on 3 factors: ability, work ethic, and desire. Joe added that birthright is more commonly being replaced with earned right.
A highlight of this section was Dave’s 40/4/40 plan for phasing out of the business. He has created a schedule that allows him to work 40 hours a week. He is in the office 4 days a week. And he has cut back to working 40 weeks a year. This allows him to do retirement-like things while staying active in the business.
Nancy talked about the importance of having a clear plan for succession that will preserve family relationships above all else. She shared that she has lived through a challenging transition and is committed to not experiencing anything like that ever again.
Yes, we couldn’t agree with this sentiment more!
Thanks again to Joe for facilitating and to our panelists for sharing their experiences!
As you look at your plans for involving the next generation in the family business, remember to lean on us at the Family Business Alliance. Our website provides a plethora of resources. Also, be sure to check out our peer groups! Members have really enjoyed this offering and we are adding groups regularly to accommodate the demand.
By: FBA Team