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.
In this issue of Family Business, we profile two families who have been thinking about succession. The three brothers who run Reitter Stucco & Supply Company Inc. in Columbus, Ohio, have been mapping out their retirement dates and creating a framework for determining who will become the next leader of the company. And at Anago Cleaning Systems in Pompano Beach, Fla., chairman David Povlitz has elevated his two children to executive roles.
As Adam Povlitz was on his hands and knees scrubbing toilets at a local daycare center in 2009, he wondered if he had made the right decision in leaving his job at IBM to work for the family business, Anago Cleaning Systems. Adam's father, David, had founded Anago, based in Pompano Beach, Fla., in 1989.
Over its 142-year history, the Follett Corporation has metamorphosed from a humble used-textbook operation into a large, complex and far-reaching education provider. Meanwhile, the extended Follett family, which has owned the company since 1924, has grown to 268 members, requiring new thinking on how to keep the family connected to the business.