Focus: Succession planning

Having a plan in place when it comes to future generations taking over the business is crucial. Amelia Levin speaks to consultants, operators and manufacturers about the steps they have taken to secure a successful succession plan

Maybe you’ve seen the popular HBO show Succession. If you have, don’t worry; the typical business owner doesn’t have to orchestrate a board of directors takeover or a small coup just to put a successor in place.

In real life, succession planning doesn’t have to be nearly as dramatic as it is for the family of the media mogul Logan Roy. Still, it does require both present and future-forward thought, and in many cases, professional consult with the right players. This goes for consultants, manufacturers, operators, reps, dealers and all players in the E&S industry.

“We’ve been talking about succession planning for about five years now,” says James Camacho FCSI, owner of Camacho Associates, based in Atlanta.“We’ve been fortunate to get good folks and they stay around for years.”

Though plans have yet to be finalized, Camacho has enlisted attorneys and accountants to aid in the official succession plans. Part of that planning is the percentage that Camacho as the owner will be able to retain from the company transfer to another leader. Another part of the discussion is determining how much he’ll remain involved and longevity planning to ensure the company remains healthy and vital 10 years from now.

At Berner, an air curtain manufacturer based in New Castle, Pennsylvania, the succession planning process started long ago. “In 2003 or 2004, we started meeting with Ann Dugan, founder and past CEO of the Family Business Center at University of Pittsburgh,” says Miranda Berner, who joined her family’s business in the early 2000’s. The company has put together a family board that includes spouses and children “to identify family values separately from the company values,” Berner says. There’s also a traditional board of directors with company ‘outsiders’, including an accountant and an attorney, meant to keep the family drama out of the picture.

These are just some of the best practices Berner’s team learned from working with the University of Pittsburgh. Another best practice and guiding principal for long-term succession planning that Berner’s mother, Georgia Berner, instituted was only considering employing family members with at least five years of experience working elsewhere. “That’s helped me build individual self-confidence and brings
outside perspectives into the company,” says Berner, who is now director of marketing for the company after spending several years in other positions, including sales.

Though she’s the only one of Georgia Berner’s four children working for the company, “it’s important to maintain that family board so everyone understands the business” and can be kept in the loop when important decisions are made, such as hiring a new CEO when Berner retired in 2017.

Identifying future leaders

The process of selecting potential successors or future leadership begins in the present, with professional development opportunities and a clear path for growth. “It is important to share the leadership guide with the whole company and for everyone to understand the opportunities available,” says Tarah Schroeder FCSI, vice president, Ricca Design Studios.

“That is exactly what happened to me when I started 15 years ago as a project manager. The leadership at the time always gave me opportunities for professional development and to grow in the industry, promoting me and giving me more responsibility along the way. I felt there was a gap in my understanding of the business of the business, and so I went back to school to get my MBA. When it was time for ownership transition, there were several sessions and meetings to coach me in the process.”

Schroeder says that the firm recently crossed a significant milestone of 50 years as a company, since its founding in 1973. “There was a successful ownership transition about 15 years ago to the second generation, and as of the first of this year, we are on our third generation of ownership at Ricca Design Studios.”

Schroeder’s mentor and CEO of the firm, Lenny Condenzio, spearheaded the succession planning efforts years ago. “With the transition from the first generation to the second generation of ownership, there was no framework on how to make that happen,” she says. “I credit the leadership group at that time for defining what transition looks like at Ricca and how it can be successful. A leadership guide was created, outlining the company mission, vision, and goals for ownership transition.”

Hiring right is key

Well before the process of identifying future leaders can happen, hiring the right people who will enhance company culture from the get-go remains a critical part of the succession planning equation.

“The secret to succession planning is the same as hiring: you have to cast a wide net to see what talent is out there, and then invest in the best possible talent — the payback will be much higher in the end,” says Craig Wilson, owner of American Recruiters, who has assisted foodservice equipment and supplies companies looking for assistance. in hiring the right individuals since 1999. He even wrote a book on the subject called 33 Ways to Not Screw Up Hiring Great Talent. “You have to know where you are with the company mission and have really good job descriptions that identify three, four or five things that really matter,” he says.

“Just like an operator invests in an expensive piece of foodservice equipment, people are investments too.”

Fortunately, the advent of remote work and the openness of culinary school students to working outside of a traditional restaurant setting has helped expand the talent pool. In the consultant world, “I’m seeing a lot more companies hiring chefs and offering additional sales or consulting training,” says Wilson.

At Ricca, an internship program helps source candidates without foodservice design experience. “We also have an apprenticeship program for superstars who need a little more coaching to reach the next level, and an inclusive recruitment process where team members from across the company are involved in hiring,” Schroeder says. “We are always looking for someone who is the right fit at any level from principal to entry-level Revit associate.”

Kathleen Held, CEO and president of Cini-Little International, knows the importance of hiring well to invest in the company’s future. “When I became CEO in May 2020, part of my strategic plan centered on adding talent,” she says.

“It was during the height of pandemic, and remote work. “I was fortunate that I broke Cini-Little into the work-from-home concept 19 years ago when I had my second child. But hiring remote positions became easier after the pandemic.”

Due to Cini-Little’s openness to remote work years ago, the firm had already had processes in place for leveraging video conferencing and collaborative software — meaning remote work not only is a perk for younger recruits, it’s nice for the senior staff too. “My mom worked for Cini-Little as well and was able to help me with childcare; it’s a nice situation for senior staff who had been coming in five days a week to have an opportunity to work from home and spend more time with their grandchildren or retired spouses versus spending all their time commuting,” explains Held.

Still, for those who crave in-person collaboration, Cini-Little maintains outposts at shared offices around the country, and to serve as a ‘landing spot’ for those traveling around the country. Held herself makes a point of stopping by all the offices when she travels for work to maintain those valuable in-person connections.

Creating a strong culture

Hiring well and offering remote work is one thing, but creating and promoting a collaborate, supportive, family-like culture is the next step in successful recruitment and company sustainability. Take it from Brett Daniel FCSI and Emalee Austerman FCSI, two of Camacho’s protégés who have moved up the ranks and don’t think about going anywhere else. “I couldn’t be paid enough to leave Camacho,” Austerman says.

“It’s one big happy family. James and Cathey are truly wonderful people. They’re flexible and understanding. They’re generous and accommodating. They treat everyone they meet respectfully, welcome new ideas and innovations to help the company not only succeed but stay at the top of the game.”

Daniel, who was promoted to vice president in January, shares similar sentiments. “A little over seven years ago, I was about to graduate from Purdue University and had started my job search for positions needing Revit experience,” he says. “I had no idea the world of foodservice consulting existed and was excited to accept a position with Camacho. Since then, I have learned so much and gained an appreciation for this fun, fast-paced industry. James and Cathey Camacho are the most caring and wonderful people to work for. They treat us all like family and allow us the flexibility to maintain a great work/life balance.”

For Camacho, watching the next generation move up the ranks has been satisfying on a personal level, if not on a business one. “To get to that position to help others grow and learn your system — that’s highly rewarding, but it also helps you help them bring in more business,” he says. “At Camacho, we teach you that if you’re within three feet of someone, you’re marketing. We make sure everyone has their one-minute elevator speech down, but we also try to make working for us like a family. We care for each other so that helps people care about what their do and care about the company.”

Schroeder says at Ricca, hires are based on having foodservice experience and BIM/Revit experience but also soft skills and just being a cultural fit. “Even for someone who is a culture fit, we know we can always teach the hard skills,” she says. “We promote a culture of inclusiveness, transparency, crucial conversations, and entrepreneurism.

While we are not perfect, we continually revisit to be better tomorrow than we are today. And we always want to make space for everyone to connect in person. We host monthly happy hours, provide food and drink for the office, host town halls, and have bi-annual company meetings to bring everyone together that are a bit work, a bit fun, and a bit community service.”

Offering opportunities for growth is an important part of creating a strong company culture. Held knows this — she serves on the board of FCSI’s Educational Foundation and the group has been working with Western Kentucky University to develop a foodservice design certificate program to support budding foodservice consultants.

“We’re hoping for a soft launch in Spring 2023,” she says. To earn the certification, participants in the program will need to take a newly designed foodservice design class, as well as a Revit class and three supporting classes. “We’re hoping this will bring in an influx of people interested in foodservice design not only for consulting firms, but also for manufacturers and dealers,” Held says.

Making succession official

When making succession plans official, Berner and Camacho say that’s when you call in attorneys and accountants who specialize in that field. “You’ll need to determine a percentage of the gross company revenue that the current owner will take and over a certain amount of time,” says Camacho.

“There has to be enough funds to pay out the owners while still keeping the company viable for the long-run.” For him, the process has taken between six and nine months.

Berner’s company enlisted attorneys and accountants specializing in family business planning “because there are estate and trust tax issues involved,” she says.

The next generation of owners doesn’t always have to be the children. “They may not even be interested in running the businesses,” Berner says. “But it’s an important legacy so knowing who will run the business – whether that’s an outside CEO or not — while the family continues to own it is extremely important.”

Amelia Levin

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