All in the Family: Business Transitions
For starters, the lines between ownership and management are often blurred, and the issue of succession can lead to conflict and complicated relationships between family members. In fact, according to Forbes, 90 percent of family businesses don't make it to the third generation, largely in part to a lack of a succession plan and for internal family reasons.
The older generation’s role during a transition is critical: too much meddling, and it risks damaging the younger generation’s belief in their own ability to effectively run the business; however, letting control go completely can rapidly see a family business slide irreversibly. The next generation needs to be given enough confidence to allay their apprehension, and at that same time be kept rooted to reality.
RAISING THE BARRE: BARBARA’S CONSERVATORY OF DANCE
“I grew up watching my mother change people’s lives through dance,” Lacee said. “I wanted to continue that tradition and make a difference in the lives of youth in my community.”
Lacee officially took ownership of the dance studio this past June. After receiving her bachelor’s degree from the University of Missouri-Kansas City Conservatory of Music and Dance, Lacee knew that if she wanted to continue the tradition of excellence begun by her mother at Barbara’s Conservatory of Dance, she would need to dance professionally. She toured for two years with Paradosi Ballet Company, and then another two years with The Thorn Productions Tours Cast before deciding it was time to come home and do what she really loves: teach.
Fortunately for Lacee, the legacy built by her mother was ready and waiting for her. Barbara has spent the past 50 years creating a safe, educational environment where young people can express themselves through all styles of dance, and the past 40 years giving students the opportunity to perform on stage through their nonprofit organization, Ballet Midwest. “Dance is wonderful,” Barbara said. The transition of the business from mother to daughter was as natural as dance itself. Lacee knew by the time she was a freshman in high school that she wanted to eventually take over the studio, so the two began talking about what that would look like. They agreed that Lacee needed to continue her education and dance professionally. They agreed that she could strengthen the educational offering at the studio by earning her certification as an American Ballet Theater (ABT) Certified Teacher, one of the few teachers in Kansas to earn that honor. They also agreed that Lacee could step away if she decided the business wasn’t for her.
“There was never any pressure,” Lacee said. “If I hadn’t wanted it, it would have been just fine.”
However, the joy of Barbara watching her daughter continue in her footsteps cannot be ignored.
“I’ve been saving it for her,” Barbara said. “I know this is going to be a wonderful career for Lacee, just as it has been for me.”
To smooth the transition process, Barbara brought Lacee in as a co-director for the past three years. She has slowly transitioned more of the responsibilities and decision making to Lacee, mentoring her until they both felt it was the right time to pass the torch.
“I admire her,” Barbara said. “She is a better teacher than I am, and that makes this transition even easier.”
While Lacee intends to continue the legacy her mother built, she plans to change the dance steps a little along the way. She is in the process of implementing an updated curriculum to incorporate the ABT training; she is adding liturgical performances and a company gala; she is also putting her own artistic spin on the choreography, costumes and sets of the Nutcracker, Ballet Midwest’s longest running production. But those changes don’t offend Barbara in the least.
“Whatever new direction she wants to take it will be fine with me,” Barbara said. “She knows what she is doing.” Understanding the succession plan, working together to ease that transition, and knowing when to walk away has made this business transfer from one generation to the next as beautiful as a grand jeté.
However, Lacee credits something else to easing the transition fears.
“She is not really leaving,” Lacee said. “I will hire her to teach as long as she wants to come in and teach. And I know she will always be there to answer my questions and give me advice.”
EVOLVING WITH TECHNOLOGY: LOGAN BUSINESS MACHINESNot all generational business transfers are smooth or easy. When Chad Logan took over the company that his grandfather started in 1972, he found a transition path full of challenges.
Chad’s grandfather, Hal Logan, started Logan Business Machines with calculators as the main product line. The small, family company sold and serviced hundreds of thousands of calculators. When Sharp began manufacturing copy machines, Logan Business Machines became one the first authorized Sharp Dealers. Hal built the company based on three main principles: hard work, honesty and taking care of people (employees as well as customers).
That transition process was a little rocky. Hal had not made his wishes that Chad take over the business operations clear to all family members, so when he passed away suddenly, it became a point of contention. It might have seemed more logical for the business to pass to Chad’s father, Nic Logan, who has also been a principal in the business for 30 years. However, facing his own retirement in just a few years, the best business decision was to let Chad take on the leadership role.
“My father is my logical brain,” Chad said. “I am the social butterfly. Together, we make a great team. I hope he plans to stay in the business for a very long time. His wisdom is invaluable to me.”
Anytime you have extended family involved in a business, it can get tricky. Looking back on the circumstances surrounding the transfer of the business, Chad said a written succession plan that clearly outlined everyone’s roles and expectations would have made the transition much smoother. He wished his grandfather had brought everyone together to discuss the details so that nothing could be left in question or up to interpretation. But sometimes those conversations can be difficult.
“We clearly fell short on execution of the transition plan,” Chad said. “I think my grandfather procrastinated on developing the succession plan because he was still working in the business. The framework was in place, but the specific details were not.”
Now that Chad has put the bumpy succession process behind him, he is focused on growing the family business to make it viable for generations to come. Part of that focus includes looking at how they can grow with their existing local clients to meet their information sharing needs both in Topeka and across the country. It also means evolving the business model to embrace ever-changing technology.
“We don’t just sell copiers,” Chad said. “We help our customers manage and share information with full-service business machines, whether that is through digital displays, smart boards, data storage or document transfer.”
Chad and his business partner, Chris Martin, hope to triple the business in size, revenue and employees over the next 10 years.
“Yes, it’s an aggressive goal,” Chris said, “but with our dedication to ‘aweinspiring service,’ we are confident we will reach it."
REMODELING A BUSINESS: WINSTON BROWN REMODELINGWhen Jake Brown took over ownership of Winston Brown Remodeling, he didn’t step into a thriving business. Instead he found a business that had been gutted back to almost bare bones, brought on by the need for his father to scale back because of health concerns.
Jake, owned his own small business in Lawrence at the time, knew he was going to have to rebuild his father’s business and redesign it to maintain growth in the future.
“I wasn’t handed a big, fat silver platter of a company,” Jake said. “It was a business I had to build from scratch.”
While working for Wickes Lumber Co., in Lawrence, Gary Winston Brown started taking on side projects for customers who wanted to do home remodeling. That demand grew until Gary realized he could create a business doing what he loved. He laid the foundation for Winston Brown Remodeling in 1974 and built it to a 55-employee company in the 1990s, creating one of the largest remodeling firms in Northeast Kansas at the time.
The company was known for its historic remodels, winning several awards for its restorations. Growth was good. Then that foundation began to crumble.
Gary was diagnosed with cancer in 2004 and the housing market was already beginning to see a decline. Faced with uncertainty in his ability to maintain the business, Gary looked to sell the company to an individual in North Dakota. He told his employees to find other jobs. He quit actively marketing the business. So it steadily dwindled from 55 employees to four.
As good sons are known to do, Jake stepped in to help keep things running and quickly decided the business was worth rebuilding to keep it in the family. They didn’t create a transition plan. They didn’t involve attorneys. They just worked out the details with a handshake. Jake purchased the business from his father and became sole owner in 2008.
Then the real work of rebuilding began. Jake had to slowly re-educate potential clients that Winston Brown Remodeling was still in business. One job at a time, word-of-mouth began to spread and the business once again organically began to grow.
“I fell on my face a few times,” Jake said. “However, each time I had a step back, I learned from it and took two steps forward.”
That forward progress includes a design-oriented approach to building and remodeling. Jake, together with his designer, Monica Parsel, work closely with their clients from the initial planning stages all the way through to project completion to take the stress and uncertainty out of the equation.
“We want to take the ‘rough-gruff’ out of construction,” Jake said. “People think about home remodeling and all they can envision is the mess they will have to deal with. We come in and build that space they have dreamed of in a way that meets their vision.”
The circumstances under which Jake took over the family business might not have been ideal, but he is grateful in the long run that he was able to rebuild the business in his own way. Jake’s vision of turning remodeling and building into a fun and rewarding customer experience has paid off. The company is now larger than ever.
“We spend a lot time getting to know our clients,” Jake said. “In a way, we become married to them for the duration of their project. A lot of our customers become really good friends and those relationships continue long after the work is complete.”
MAKING A CLEAN TRANSITION: JETZ SERVICE CO.Not too many nuclear engineers find themselves working in a company that specializes in laundry. However, for Noel Etzel, taking over the business that his parents started in 1966 was extremely logical. Like most engineers, Noel’s attention to detail and rational decisionmaking played a critical role in his decision to take the helm at Jetz Service Co. in Topeka.
Tim and his wife, Carole, started Jetz Service Co. in response to a laundry crisis created by the devastation from the 1966 F-5 tornado that ripped through Topeka. As apartment buildings began to spring up to meet the housing needs of people who had lost their homes, the need for centralized laundry facilities in those buildings became readily apparent. Seeing a way to meet those demands, Jetz Service Co. quickly grew into a thriving business.
Now, 51 years later, Noel and a cadre of younger generation leaders are ready to step in and evolve the company to adapt to changing trends and technology. This transition of leadership didn’t just happen overnight. It actually began five years ago, while Tim was spending some time in California.
“I had some time to think while I was out of town,” Tim said. “I started thinking about what the business would be like when I was ready to step away, and began right then putting the pieces into place to ensure a seamless transition.”
The transition plan involved discussions with key personnel in the business. Not only would Tim be stepping away, but Ron Sommers, the company president who had been in the business from the very start, was also planning to retire. As the succession picture began to unfold, the pieces started to fall into place.
Noel took over as CEO when his father retired in January. Ron’s nephew, Chris Sommers, will replace him as president when Ron retires this summer. Steve Cowsert will take over for Chris as operations manager, and a relatively new hire, Ryan Hembree, will serve as vice president of sales and marketing.
“We have such high-quality young people in our company,” Tim said. “I am fully confident that we will continue to grow and expand the company.”
For this father and son duo, the transition from one generation to the next has been pretty seamless. With the help of some long-term planning, expert advice from attorneys and accountants, and a well-communicated succession plan, nothing was left to chance. The ‘transition team’ has spent the past few years meeting monthly to make sure all the details are going according to plan.
Now that the “Fantastic Four” are taking over the helm, they are putting their own mark on the business. Even though the company has a stellar reputation for taking care of its employees, Noel and his team have embarked on a re-engagement process with their employees to discover what they want and need from the company.
“I personally shook hands with every single one of our 170 employees this past year,” Noel said. “It was the first time I had done that. It was pretty awesome.”
Noel says he recognizes that their industry is changing and that the company will have to adapt to stay relevant. While the majority of their business growth has been through acquisition, they are exploring new avenues that will embrace emerging trends.
Even as they push forward with their new agendas, the younger generation still appreciates where they have come from. They also look forward to seeing Tim’s familiar face in the office every day as he lends his support and advice, accompanied by his faithful companion, Pitzl, a friendly ball of fur (Colan breed). “She runs the Eastern Division,” Tim said.