Managing the transition

The Anderson Group navigates family succession

Jennifer Hansen in her office. Harley Davidson gave her the wall mural, which was personally signed by Willie G. Davidson.

In her office at 16555 W. Lincoln Ave. in New Berlin, which is covered in wall decorations from one of her company’s largest clients – Harley-Davidson Motor Co. Inc. – Jennifer Hansen, owner and president of The Anderson Group, set the scene.

It was 1993. She was 22 years old, with fresh degrees in psychology and Spanish. She had recently landed her first job at the Lawrence Center in Waukesha, where she helped teens overcome drug and alcohol addiction. And she was enjoying being young – settling in at work, moving into her first apartment, working a second job as a waitress to help save money for a trip to Europe.

Jennifer Hansen in her office. Harley Davidson gave her the wall mural, which was personally signed by Willie G. Davidson.
Jennifer Hansen in her office. Harley Davidson gave her the wall mural, which was personally signed by Willie G. Davidson.

She didn’t intend to eventually take over the newly-formed family business, called Anderson Seal, her father had opened just three years earlier.

Phil Anderson had worked for years as the vice president of sales at a different family-owned seal distribution company. When he realized he had risen as far as he could in the company, he decided to go into business for himself, selling o-rings and rubber seals to original equipment manufacturers.

Hansen wasn’t initially drawn to her father’s company.

“I had no desire to sell rubber products when I graduated college,” she said.

Until one day, Anderson sent Hansen an oddly formal letter in the mail requesting an interview.

“It was very strange,” Hansen said and smiled, amused by the memory. “It was on a Saturday. I was like, ‘whatever.’ I went to the interview. He and my mom were there. He gave me a personality test. I think he got the idea from some ‘Golf Digest’ magazine. I took it, and he said, ‘As I suspected, you should be in sales. You’re a natural salesperson and I’d like you to come and work for me.’”

Initially, Hansen protested her father’s offer, but he asked her try it out for a year and if she didn’t like it, or if he felt she wasn’t doing good work, they could part ways.

She reluctantly agreed.

Though she didn’t know it at the time, Hansen’s decision to take the job set in motion a chain of events that would eventually lead to her purchasing the seal distribution company from her father in 2003 and expanding from six employees in a 1,200-square-foot building to roughly 80 employees at two companies working in three plants totaling 105,000 square feet.

Until this fall, Anderson Seal, which has grown to $17 million in annual sales, was owned by Hansen under the umbrella company The Anderson Group. Anderson Group also owns a packaging company, called Anderson Packaging LLC, Hansen started that ships motorcycles in pieces to plants in Brazil and India.

Hansen sold the rubber seal portion of her business to Indiana-based Trelleborg Sealing Solutions, a division of a Swedish company called Trelleborg AB, in early September (See sidebar).

She still owns and operates Anderson Packaging and will continue to lead day-to-day operations as the director of Anderson Seal under its new owners.

When he sent her that letter requesting an interview, Phil Anderson didn’t know where the company would end up or what Hansen would turn it into, but he knew she’d be an asset as an employee.

Philip Anderson and Jennifer Hansen in front of a display of Harley Davidson awards.
Philip Anderson and Jennifer Hansen in front of a display of Harley Davidson awards.

“I didn’t want her working for someone else, because she was so good,” Anderson said. “She was personable and hardworking, but most importantly, she cared about the people she was working with and that attitude alone was what I was looking for. It’s about the people who are working for you. If you treat them good, they’ll be successful.”

Family business advisor Dean Fowler, owner of Brookfield-based Dean Fowler Associates Inc. and author of four books about the habits and strategies of successful family businesses, advised Hansen and her father during the transition of ownership and praised the family’s handling of what can often become a tumultuous, contentious and destabilizing process.

“I think Jennifer did an excellent job and is a great example of embodying some of those key characteristics that need to be in place to be successful in a family transition,” Fowler said.

He named three reasons why:

Initiating a successful transition

“She was proactive and designed a future that worked for her,” Fowler said. “I think she had a good vision for strategy and opportunity. It’s not just the ability to manage the day-to-day and maintain the status quo that matters, but she is a good strategic leader that could focus attention on opportunities for the future. She has a good strategic sense for how to develop a business.”

Hansen learned the business quickly after she started in the mid-1990s, and she found she enjoyed the work. Though it was completely different from the vision of her future she had while studying psychology in college, it suited her.

“What I liked about it was I got to do a lot of different things,” Hansen said. “I got to wear a lot of different hats.”

She had never formally studied business, but soon found herself involved in operations, quality control and installing the company’s first computer system.

“We had literally been checking in inventory on note cards,” she recalled. “At first we had a shared computer and then we all got them on our desks.”

Eventually, she began doing outside sales and calling potential customers.

“It’s a very humbling thing to do,” Hansen said. “Everyone should be a waitress and everybody should be in outside sales. It teaches you humility and stamina. No one wants to give you new business, especially if you’re somebody who’s just starting out, because they don’t think you’re going to stick around. They don’t think you’re going to be an ongoing concern.”

Hansen found, as her father predicted, she liked sales. And she was good at it.

As she learned more about what her customers needed, she learned more about the capabilities of the company and its staff – how it operated and where there were opportunities to grow and improve.

Anderson Group employee Myrna Hernandez assembles a drain plug.
Anderson Group employee Myrna Hernandez assembles a drain plug.

By 1998, Hansen had taken on a huge amount of responsibility within the company and her father was already beginning to transition out of the business. She had also enrolled in a two-year executive MBA program at the University of Wisconsin-Milwaukee – which she and her father felt was an important degree for her to get to add to her credibility in the field, especially since she was a woman in a male-dominated industry.

“I think the fault of a lot of first-generation entrepreneurs is that they’re a bunch of control freaks who don’t want to give away anything,” Hansen said. “My dad was very much the opposite, which I think is very good if the person taking over wants that and can handle it. He really let me learn by making my own mistakes, which is painful and sometimes embarrassing, but I was young and I was learning from him. I was learning really quickly over time. I was doing all the hiring and strategic implementations. I got us ISO certified. It wasn’t like I was someone new coming into the business and saying, ‘Now I’m the new boss.’ I was kind of already the one in charge. I was the VP and I had hired my own staff and I had made my own goals. So it was a really natural transition.”

Eventually, as she took greater command of the company, she asked herself: ‘Do I really want to keep expanding and doing all this work if I’m not going to own the business?’ She approached her father, who was willing to transition into retirement, and they decided to have the company valued by a Chicago firm.

She took out a loan and purchased the company from her father at full price.

“At the time, I wasn’t scared to do that and I don’t know why,” she said, and laughed. “I was maybe oblivious to the risk. He wasn’t worried about it either. I felt comfortable and I felt confident. Part of the deal was he couldn’t have anything to do with the business. So he left and he didn’t come back. I joked around that he left his coat here.”

Fowler said her willingness to initiate the discussion about buying the business, and to do so on her own terms – terms she was comfortable with and fit into her vision of the future of the company – were key to the success of the transition.

“When family members proactively design the future, then it tends to be a future that will work for them,” Fowler said. “Too often, families have a future that’s imposed on them designed by the senior generation, and then it fails when the senior generation leaves. She took the steps to become educated and understand what the options were. Figured out how to work with advisors and attorneys in order to be actively engaged herself to have a voice in the structure and dynamics of a transition.”

Taking on financial risk

Another positive aspect of the way Hansen and her father went about the transition was that she assumed all the financial risk and responsibility at a very young age and while her parents were still relatively young, Fowler said.

“She was willing to take the financial risk, and I think in too many cases of family business transition, the next generation wants leadership and control, but they’re not willing to take their own personal financial risks for the future,” Fowler said. “She bought out her parents in her mid-30s. Those are usually people’s most opportune years for their careers to blossom. She took the financial risk to buy out her parents while they were young, and then she could still have years to grow the business as the owner herself.”

Anderson Group employee Der Lee Vang assembles a drain plug.
Anderson Group employee Der Lee Vang assembles a drain plug.

The fact that her parents were still young enough to get involved with other projects if they chose to do so was also vital to the transition – instead of concerning themselves with her business, they could focus their efforts elsewhere, on a new enterprise.

Eventually, her father did exactly that. He took ownership of the iconic Milwaukee diner chain George Webb Restaurants in 2010.

“I think true entrepreneurs, they can’t stop,” Hansen said of her father. “It’s not in their DNA. Emotionally, their brain is wired to lead and to do things and to work. Work is fun. And I think that’s what work should be. It should be something that you enjoy doing. And as a result of doing what you enjoy doing, you can maybe be successful and make other people’s lives better along the way.”

“He left and he’s the owner of George Webb today,” she continued. “So he went and did a different business venture and I think that’s great for him.”

But Fowler said one of the biggest reasons for Hansen’s and Anderson’s success in the transition wasn’t necessarily the details of their plan, but how they formed it.

Open communication

“She had a good relationship with her parents,” Fowler said. “Good communication and a positive working relationship was important. If you have a proactive, engaged, capable, competent next generation leader who helps design a future she can live with and a family who is open to discussing those things, that’s key to the transition.”

“They were exceptionally good at communication,” he added.

Hansen felt the absence of that communication after her parents left the business.

“It’s really hard when you’re a sole owner to talk about things that are going on in the business,” she said. “You can’t talk to your family about it. You can’t talk to your co-workers about what’s going on. I mean, you’re the boss. There’s very few people, when you’re in my position, who you can open up to about problems, obstacles, struggles, just to share.”

Luckily, she had a strong group of friends she had made while earning her MBA at UWM, off of whom she could bounce ideas. Her former classmates became great advisors.

“They weren’t in my business,” she said, which was important. “If you’re working as the VP of marketing at Froedtert, you’re not going to buy my o-rings, but you’re someone who can understand the things that I’m going through. So they really became an essential group of friends and mentors and people I still talk to today.”

“I also met my husband in the program,” she said. “So that was a perk.”

Hansen recommended other family business owners find people in unrelated fields to talk with about certain problems they’re encountering as executives to help them brainstorm solutions or, in some cases, just to vent.

“She was proactive and designed a future that worked for her,” Fowler said. “She bought out her parents. Her father was an excellent entrepreneur, and Jennifer is an excellent entrepreneur. I particularly like to emphasize the proactive element. Next generation leaders who have that characteristic are successful.”

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Ben Stanley, former BizTimes Milwaukee reporter.

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