On May 16, 2017, Davis Wright Tremaine LLP hosted 85 owners and managers of family-owned businesses at the latest edition of our Family Business Legacy Series. Mike Garvey, the co-founder of Saltchuck Resources, a diversified transportation and distribution business with revenue of nearly $3 billion and 7,500 employees, and René Ancinas, the fourth generation CEO of Port Blakely, a global grower and marketer of renewable forest products, shared their perspectives on successful leadership and management succession.
Mike spoke candidly about what is perhaps the most difficult transition – the passing of the baton from first to second generation. René described the challenges and processes in accepting the reins from the third generation and preparing the fifth generation to be leaders and engaged owners.
Consult with those who can be honest with you and hold you accountable -- friends, advisory groups, and outside directors -- not family members.Despite having experienced family business succession from two very different perspectives, Mike and René saw much in common:
- Succession planning is a process. Start early and be intentional.
- Successful transitions require reflection and self-awareness. Know what you want to accomplish.
- Be objective. Consult with those who can be honest with you and hold you accountable -- friends, advisory groups, and outside directors -- not family members.
- Talk about succession and seek feedback from family and employees. Have open, honest and transparent discussions NOW.
- Avoid the “Tyranny of Perfection.” No plan is perfect. All plans need adjusting.
- Make the plan meaningful. Establish a timeline with objective milestones and actions. Rules such as age limits and term limits provide certainty.
- The family and the business must continually evolve. The next generation will do things differently. This is a good thing.