In this issue
It seemed like an interesting career opportunity, a chance to move from the large corporate environment to a smaller family company where my efforts would have a significant influence. In 1978 I was offered the chance to join the Ph. Orth Co., a third-generation manufacturer of baking mixes and fillings in Milwaukee. During the recruitment process, the principal owner, Philip W. Orth Jr., had stated that he was looking for someone to head sales. He intimated that he was also concerned about the future of the company, since he saw no one capable of taking over as president.
Jack and Alyce Schmidt started Spacesaver Systems Inc. in Kensington, Maryland, 25 years ago. A dozen years later the youngest of Jack’s two daughters, Amy Hamilton, entered the business, which provides data storage equipment and records-management software to companies and government agencies in the Washington, D.C., area. In a couple more years Alyce’s son, David Craig, left the Air Force to join the company. Then Jack’s older daughter, Carla Adam, left a public relations career at Martin Marietta to roost at Spacesaver as well.
An urgent message to business leaders in their 40s and early 50s: Pay the price of succession during your peak years. Make plans now to finance your retirement outside your company. Don’t plan to keep on tapping company cash flow after your successor is in place.
Recently, I participated in a panel discussion on business compensation in which we were asked to discuss a hypothetical case. The entrepreneur in the case had “retired” in his early 50s after turning the business over to his children, who were in their 20s. They were struggling to keep the business going.