I recently went back to my hometown to attend a funeral for a gentleman I have known my entire life whom I will call Tig. This event wasn’t unusual. It plays out in towns and cities everywhere. What made this event unique was the location of the funeral. Neither the viewing, nor the funeral, was held in a funeral home or a church like every other funeral I have ever attended. Instead, these activities took place in a building located within the confines of the company that was founded by the deceased. It was a fitting location to highlight the life of the man and the pride that he took in the company he had founded over 53 years earlier.
My hometown is the definition of a small town. In reality, per Wikipedia, it isn’t even a town. It is an unincorporated community of about 400 people located in a county of only 12,000 residents. It is one of those small “drive-through” towns that no one notices or remembers. It wasn’t always that way, though. When I was much younger, it was still a thriving community. Before the consolidation of the 3 county high schools into one school, my town was pretty active with a car dealership, a grain mill, a grocery store, a hardware store, three gas stations, and the company founded by Tig. After the closing of the local high school in 1974, all of those businesses went away… except for Tig’s company.
Tig’s company was a manufacturer of agricultural equipment and in the area where I grew up, where there was nothing except cornfields and coal mines, business was good. The company grew strong through the years and as his children graduated from college, he brought them into the family business. New ideas and different perspectives continued the growth model to the point that Tig’s company started expanding into new markets and growing at a fast rate. Throughout all of this growth, Tig never changed. He was as nice of a man as he was a success as a businessman. This held true for his children as well. They were a close-knit family with two of the children visibly active in the business. The business now employs the third generation of family members who have brought even newer ideas and perspectives to the company. This has led the company to unprecedented growth over the last decade. At the centerpiece of this company, though, was always Tig. Even into his 80’s Tig was a presence at the company. His house was located next to the company. He stopped in daily to see how things were going. He was always the person who could be called on for advice when needed. The company carried his name. It was his. It was his legacy and it is where we gathered to say goodbye.
After being directed to a parking area by an employee of the company, I walked into one of the manufacturing buildings that had been thoroughly cleaned out for this event and saw the long line of people waiting to pay their respects. As I wound my way through the line, I was greeted first by Tig’s grandson. He is now the Sales Manager for the organization. The grandson’s father, Tig’s eldest son, is now the President of the company. As I continued down the line and met with Tig’s other children, it dawned on me that the company was still in good hands. Tig had a succession plan in place that had already been activated. There was no question about who was running the company. Tig’s children all seemed to have their roles defined regarding the company. There would be a seamless transition after Tig was gone. I thought this was a wonderful closing gift that Tig gave to his family.
Succession planning for a family-owned business is not easy. I have unfortunately witnessed numerous companies that have failed due to a lack of succession planning. There are many causes for these failures from no family members interested in taking over the business, infighting among relatives, to lack of planning by the owner. Having a good succession plan not only ensures one’s vision for the company continues it also contributes to a positive legacy for the company in the community.
Following are, what I believe to be, some tips for a good succession plan:
- Start now. No one knows what tomorrow holds for us. Things happen unexpectedly.
- Evaluate what you want your company to be. Do you want to cash out at some point or do you want to see the company continue? This is a tough choice depending on many personal factors for each individual. Knowing this important detail will help you decide the next steps.
- Evaluate successors. If your goal is to continue the company you should evaluate who you think would be best to help the company succeed. This could be anyone from a family member to a long-term employee.
- Develop the plan. Once you have some idea of what you would like to do, develop an action plan. This plan can be fluid, depending on changing needs, but having a written action plan for succession is a good start.
- Get expert help. Talk to people who are experts in financial planning to help you make the decisions you need. There are numerous implications with succession planning that can impact the financial stability of the company or individual who is part of the succession event. Have everything clearly spelled out for you so that you can communicate to others what will happen in the future.
- Communicate. Having a plan in place is only as good as the method used to communicate the plan. These can be very difficult conversations but they are necessary. Having clear communication to all involved, including employees, can help smooth the transition to new ownership.
There are so many things I will take away from my association with Tig. He was a kind man who showed goodwill toward others. He created jobs for people in a relatively poor area. He treated everyone with kindness and respect. He built a business from the ground floor that continues to grow and develop after 50 plus years. This will be his legacy and those will be my memories.
His good planning and foresight for his company’s succession is why people aren’t talking about what will happen to the company. It was what allowed the focus to be exactly where it needed to be. Every time I drive by the facility I will have nothing but fond memories of the man.
So long Tig. Thanks for your kindness and friendship. You will be missed.
