Change is hard. Maybe even harder when the change involves people with the same last name changing roles in a family-run business.
When Bill Bassett took over Bassett Mechanical in 1974, the transition was less than smooth. No plan had been developed, and Bassett had to struggle with his predecessor remaining active in the company. When it was time for him to pass the torch to the next generation, he was determined there would be a detailed and clear process in place.
“The best thing you can do is plan it out and write it down,” says Bassett, who along with his daughter Kim described for those attending the Family Business First Awards the succession process Bassett Mechanical implemented when Kim joined the company.
The Bassetts were the keynote speakers for 19th-annual Wisconsin Family Business Forum event honoring the 2015 award winners presented by First Business Bank in partnership with the Family Business Forum.
The event also honored three family-owned companies with a 2015 Family Business First Award:
» Buechel Stone Corporation. In 1964 Francis and Alyce Buechel founded Buechel Stone Corporation by taking their 125-acre farm in the Chilton area and converting it into a working quarry. The quarries now span more than 700 acres of land in east central Wisconsin and produce over 100 types of natural stone.
» Faulks Brothers Construction. Faulks Brothers Construction has been shaping central Wisconsin since 1946. Starting as a two-man undertaking by co-founders Syd and Oliver Faulks, the Faulks brothers began what is now one of Waupaca’s largest employers.
» Perfect Patterns. Perfect Patterns has been a leader in precision tooling in the Waupaca and Fox Valley area for over 60 years. Under the leadership of founder Scott Gauerke, Perfect Patterns operates in four locations with more than 160,000 square feet of modern manufacturing space and more than 50 state-of-the art CNC machining centers.
For many family businesses, that transition to the next generation is one of the greatest challenges a business will face, often because planning for the succession doesn’t happen soon enough.
In addition to creating a written plan, some of the other lessons the Bassetts learned during the transition from Bill to Kim included accepting that not all department heads will make great coaches for the next generation, communicating the plan and timeline to the existing leadership team and providing numerous opportunities for job shadowing and mentoring.
When Kim returned to Bassett in 1996, it would be another 10 years before she reached a level in the company where she worked directly with Bill. In 2006, she became executive vice president at Bassett Mechanical.
“I never reported to him for the first 10 years. It wasn’t until 2006,” Kim says of her experience learning the company from the ground up. “Then I had the office next to his and shadowed him. That’s when I truly began to understand the whole business.”
As much as the process was planned for the transition to her leadership, there were some bumps and challenges along the way. For starters, as she began moving into the executive positions, it became apparent Kim had a different management style than Bill. Both had to accept that not everyone would be happy with the change, nor could Kim try to do things the way Bill had done them.
Kim would have to find her own style and understand some of the leadership team might decide it was time to pursue other opportunities.
“Successors are constantly under surveillance to prove themselves,” Kim says.
In the end, though, the company did not lose anyone and when Kim was ready to take over day-to-day leadership, Bill was ready to let go. He had her moved into the executive office and had himself moved out. During the transition, there were times he disagreed with Kim’s approach, but allowed her to pursue her own path and set her own style.
For Bassett Mechanical, the results have beaten expectations. The company grew 30 percent in 2014.
“Bill is an example of how to do it right,” Kim says. “When the time came, he let me make the decisions.”
In an effort to help family businesses make a better transition to the next generation of leadership, the Wisconsin Family Business Forum will host a June 11 event about succession in family businesses at the University of Wisconsin-Oshkosh Appleton Executive Education Center.
For details and registration, visit wfbf.uwosh.edu.
Family business: Backbone of the economy
In Wisconsin, nearly 92 percent of all businesses are family owned. They employ nearly 60 percent of the workforce, produce 40-60 percent of the GDP, and utilize more than $2.4 trillion of investment capital.
» 30 percent of all family-owned businesses survive to the second generation
» 12 percent make it to the third generation
» 3 percent survive to the fourth generation