In this issue
It was on the radar screen, especially over the last five years. Succession planning was right there, on the "To Do" list. It was never really forgotten but somehow had gotten sidelined, a casualty of the daily demands of running Reitter Stucco & Supply Company Inc., based in Columbus, Ohio.
But with the company about to turn 100 years old, and with all three brothers on the executive team in their 60s, the "elephant in the room"—the need for a clear and carefully devised succession plan—couldn't be ignored.
Nick Perrino's response to his son Joe was blunt: "You're going to blow up this business with your stupid ideas."
Nick had transformed Home Run Inn Pizza from a neighborhood tavern into a 600-seat restaurant on Chicago's southwest side. Joe shared his father's ideas about growing and expanding the family business—yet Nick called these ideas "stupid."
For many retiring family business leaders, the difference between watching their company flourish and seeing it falter comes down to a well developed and carefully executed succession plan. Regardless of where you live, effective succession planning is essential. Challenges that are common to business families worldwide include making planning a priority, communicating with family members and key employees, strategically timing transitions and instituting family and business governance that will help smooth the succession process.
A global issue
The Business: John (Jack) Wegman, who began by selling produce from a pushcart on the streets of Rochester, N.Y., opened the Rochester Fruit & Vegetable Company in 1916. His brother Walter, who had helped their parents sell groceries from the front of their home, joined Jack in business a year later. In 1921, the brothers purchased the Seel Grocery Co., enabling them to expand into general groceries and bakery operations.
The Business: Clarence H. "C.H." Sutphen, a former sales rep for educational supplies, founded the company in downtown Columbus, Ohio, in 1890, selling fire hoses and equipment to fire departments and municipalities. He also sold compact versions of steam-powered fire engines that could be pulled by people rather than by horsepower, thus saving small towns the expenses associated with keeping horses.
My father worked on the farm for as long as I can remember. He always came home filthy, his faded Wrangler jeans covered in manure, possibly a little blood and always dust. I knew he worked extremely hard. Sitting in church, I would pick at the decade-old calluses that covered his palms. I recognized that he worked to provide for our family of six; we lived comfortably, and I was never denied $20 for the Cinema 5. But not until I was 17 did I fully realize the depth of the family's commitment to the farm.
My father, T.H. (Tom) Mellor, was born in 1896. His father died when he was 3, and his mother died when he was 11.
After leaving school, my father became an apprentice at the local tramways. At the request of the director, he learned to drive (considered dangerous at that time) and became the director's chauffeur.
Generation of family ownership: Third.
Company revenues: In excess of $50 million (2014).
Number of employees: About 50.
Years with the company: Ten.
First job at this company: Back office and logistics assistant.
Like many next-generation family business members, Andrew Royce Bauer and William Bauer started working in their family business as children. But they didn't just spend school breaks helping out with menial tasks at their family's leather goods business, Royce Leather.
"I was in the business since I was born," says Andrew, now Royce's CEO. "I started selling at [trade] shows at age 11."