A Special Series from the North American Wholesale Lumber Association
By Warren Reeves, Wholesale Wood Products
Every Boy Scout knows to be prepared. But every company, regardless of size, should heed this motto when considering its future leaders. If the CEO of your company suddenly resigned or became unable to fulfill their role, what would you do? Wing it?
Service continuity is imperative for a company’s success. You might get away with flying by the seat of your pants in some circumstances, but when it comes to succession planning, if you’re unprepared, you’re putting your company at risk.
So, what are your options? Essentially, there are two: hire from within the company or hire externally. Regardless of which you choose, the key is that the successor be the right person. For family-owned companies, this choice can be tricky. You might want someone within your family to succeed you, but what if they aren’t ready? Your stakeholders won’t be impressed if they sense nepotism, especially if that person is ill-prepared for their new role.
Manufacturers Reserve Supply, Irvington, N.J., is in the process of grooming a leader to replace Steve Boyd, the company’s current president and CEO. Boyd’s father led the company before him and, before that, his father held the role. Boyd’s been the president and CEO for 30 years now, but he didn’t originally envision himself working for the family business. He’d been working at Packaging Corporation of America for five years when his dad gave him a call.
“My father called me one day and said ‘My general manager is retiring, would you like to come to work?’ I said ‘No, I don’t think so,’” Boyd says. He was just starting to settle down; he’d met his future wife, built a house and felt comfortable in his career.
Despite his initial disinterest, Boyd decided to give it a shot. “You just never know with family how it’s going to work out,” he says. Six years later, his father handed him the reins of president. Boyd hasn’t looked back since.
Now, Boyd is in the position of having to consider his own successor. Brian Boyd, Steve’s son, came back to the company five years ago after working at a different wholesaler for five years. Brian, who is currently the company’s general manager, had always been interested in the family business, but he wasn’t sure he’d make his career at Manufacturers Reserve Supply.
“My dad was really good about saying ‘We would like you to come into the family business if that’s what you would like to do,’” Brian says. “He said that both my sister and me. And he said, ‘If you don’t want to, that’s okay, just let me know so I can plan for the future and what that looks like from a leadership perspective.”
“I wanted to make sure that I was ready and that it was my choice to come into the business,” Brian says.
Being ready to come into the family business is one thing; being ready to take on a leadership position is another thing entirely, and Manufacturers Reserve Supply isn’t rushing the process.
The company has an eight-year succession plan in place for Brian.
“[The plan was] that he would come in and run through various departments,” Steve says. “He spent a couple years in inside sales, operations, finance and special projects. When the management team decides he’s ready, then we’ll put him in as president.”
Brian is grateful for this slow transition; it’s allowed him to learn the different roles that make up the company and given him a greater understanding of how Manufactur-ers Reserve Supply runs.
“Later in life, I’m sure “I’ll be able to look back on the first hand experiences I’ve had that will help me make decisions and lead the company in the future.”
Making sure a successor is fully prepared is crucial in the succession planning process, but it’s equally important to ensure the rest of the company, whether family or not, is on board with the decision.
“All employees should understand your strategy, and you need to communicate with them so they feel comfortable that you are all heading down the right path,” Steve says.
Once a successor is in place, it’s also important to remember that it takes more than one person to operate a business.
“We’ve got a really good team,” Brian says. “It’s just my dad and I family wise in the business, but it takes so many people to run a successful business, and most of them are not family members. We’ve built a great team of managers and employees.”
“It’s not my dad’s way. It’s not my way. It’s our management team’s way and how we want to grow the company. Even if I felt unprepared, there are many other people I can rely on to help me lead the company.”
Even the best-laid plans of mice and men often go awry, but with proper planning and involvement of all appropriate parties in your company’s succession plan, you’ll be as prepared as you can be to keep the future of your business bright.