Family businesses can be complex; a quick Google search on succession planning will highlight the challenges of transitioning a company from one generation to the next. There are plenty of statistics to highlight the drop off in companies making it to a second, third or fourth generation of family leadership.
Those businesses that do navigate the transition can create something special. Not only do family businesses create a legacy, but those that are successful have the chance to form a culture that sustains not just the ownership family but the families of hundreds if not thousands of employees. Being successful, however, and sustaining that success, requires putting in the work on transition plans, business strategy and operations, and maintaining family relationships.
To help with that often-difficult work, BizTimes Media is excited to present the Family & Closely Held Business Summit, on Wednesday, June 7 from 2-6:30 p.m. at the Brookfield Conference Center. The event, sponsored by Meisner Tierney Fisher & Nichols and National Exchange Bank & Trust, with supporting sponsor Blackhawk Capital Partners, will feature a keynote conversation with leaders from Sheboygan Falls-based Bemis Manufacturing Co. and Bill Edstrom, owner of Edstrom Consulting Group.
There will also be a panel discussion featuring Jeannie Cullen Schultz, co-president of Janesville-based JP Cullen; Nathan Liebl, chief operating officer and co-owner of Butler Tool, Inc.; Anne Cookson, co-owner of Waukesha-based Baker’s Quality Pizza Crusts & Crustology; and Matthew Powell, president of Pewaukee-based Century Fence. Panelists will discuss their own transition into family business leadership and ownership, how they aim to grow their companies, navigating family dynamics, and much more.
Following the keynote and panel, the event continues with three breakout sessions. Topics include a guide to raising outside capital, navigating cultural continuity in a family-owned business, and evaluating exit planning options like an internal or external sale, private equity or an employee stock ownership plan.
For more information and to register, visit biztimes.com/family.
Ahead of their keynote conversation, Richard Bemis, director and past chairman and CEO of Bemis Manufacturing, and his daughter, Vesla Hoeschen, chair of the board of Bemis Manufacturing, shared insights on how Bemis has grown into a global leader in toilet seat manufacturing and one of the top non-automatic contract plastics manufacturers in North America. The company was founded in 1901 and, with Hoeschen, is now in its fourth generation of family leadership.
BizTimes: In your mind, what have been some of the keys to Bemis’ longevity as a family business?
Richard Bemis: “I believe innovation has been a key to our success. Bemis has a long history of developing patents for our products. We have also created manufacturing processes unique to our company which differentiate us from our competitors. For example, we developed a flow-coat process for painting our molded wood toilet seats, we used robotics for high-speed assembly of our toilet seats and built our own compression presses to accommodate high-volume molding. So, both product innovation and manufacturing innovation have contributed to our long-term success.”
Vesla Hoeschen: “I agree, and I would add strong leadership and constant re-investment back into the company, our people and our community.”
What have been the keys to successful transitions between generations?
Bemis: “My brother, Peter, and I recognized early on that we were caretakers of the company and we committed to leaving it in better condition than we found it. We took a thoughtful approach to planning to avoid an interruption in family ownership due to inheritance tax. Having two classes of stock – voting and non-voting – allowed us to transition ownership to the next generation without relinquishing control. Reinvestment back into the company was made with the long-term view toward a successful transition.”
Hoeschen: “I will point out that prior generations were all operating owners, but that has changed with my generation. The fourth generation is committed to redefining what it means to be an owner and allowing for different styles of ownership engagement – operating, governing and investing. We are also transitioning to a new style of governance, one more democratic than autocratic.”
Bemis’ products have continued to evolve over the years. What are the keys to innovation and how do you avoid employees having an aversion to change?
Bemis: “It’s hard to romance a toilet seat, but we have. And we’ve done it for 90 years since we first started making them in 1933. By listening to our customers, we have improved upon the humble toilet seat. Customers wanted the toilet seat to be easier to change – we developed a top-mounting hinge with rust-proof hardware. Customers wanted the toilet seat to be easier to clean – we designed a hinge that allows for quick removal for cleaning. Customers wanted a more comfortable seat – we developed a heated seat, one with a night light and one with padding. As customers want more and more from a toilet seat, we are working to develop a seat to meet their needs. Jeff Lonigro, our CEO, continues to focus on market-back innovation to drive future success. Visionary leaders have to push boundaries, ask tough questions and sell the concepts of change.”
What are some of the keys to good family business governance?
Hoeschen: “I believe you need a strong, independent, fiduciary board where open communication is encouraged. The board is not always going to be 100% aligned, but if there is a robust discussion and different opinions are allowed to be expressed, you get to better answers. Our independent directors outnumber our family directors and it takes trust from the family to make this work. Good communication needs to exist within the family as well. Our different voices need to be heard and respected, and we do this in our Family Council. I’m making this sound a lot easier than it is in practice. We’ve been working on improving our communication for years.”
How can family businesses go from knowing best practices in governance to actually implementing the practices and then sustaining those changes?
Hoeschen: “There is no checklist of tasks for success. Each family business is unique, which means there is no one-size-fits-all path for success. The family needs to be committed to doing some heavy lifting, working together, making choices that benefit all of the stakeholders involved –not just the shareholders but the employees, business partners and local communities as well. We’ve also had good success leaning on our independent board members.”
Bemis: “You gotta walk the talk. You need to be willing to do the work. Sometimes a professional consultant can bring a lot of value to helping the family plan, execute and sustain best practices. Making it to the fourth generation does not just happen naturally, it cannot be an afterthought. The family must be deliberate in their efforts to create a successful transition.”
