In a good succession plan, roles are clearly defined. “Everybody can’t run the company,” says Champ Rawls, associate planner at the Rawls Group, LLC, an Orlando, Florida-based succession-planning firm. “You have to clearly outline what everybody’s responsibilities will be.”
You can’t assume that the business baby you created will continue to thrive once your children get full custody. Statistically, 50 to 70 percent of family businesses don’t survive long after the second generation takes over. There are things you can start doing now, however, to make sure the transition goes as smoothly as possible.
The worst-case scenario, says Rawls, is when a founder behaves as though he’s going to live forever, then suddenly dies, leaving the heirs to “figure it out.” Often, they’re just not ready. “Qualified heirs need to have the ‘Four C’s’,” he says. “They need to be competent, capable, community-minded and committed.”
Rawls speaks of creating a “successor development path.” This involves looking critically at the gap between where the heirs are now, compared to where they’ll need to be. Are college degrees or certifications needed? Do they understand the inner workings of the business well enough?
Here are a few companies that seem to have gotten it right.
The year was 1981—the first year that the New Jersey Nursery and Landscape Association started giving out awards. The Grand Award for Landscaping that year went to Rich Cording, Sr., owner of CLC Landscape Design in Ringwood, New Jersey. In 2011, exactly 30 years later, his son, Rich Cording, Jr., received the same award for his work on a lakefront property.
It was a very gratifying moment for both men, but especially for Cording, Sr., 62. He and his son co-own CLC Landscape Design and one day, Senior will hand over the whole company to Junior. But that was not a foregone conclusion.
“My father always envisioned that I would take over the business for him one day,” said 34-year-old Cording, Jr. A picture of him at age two shows him sitting in his dad’s lap, pretending to drive a Bobcat, his hand on the stick. “However, for the majority of my childhood, I wanted nothing to do with it.”
You, too, may envision handing over the green industry enterprise you built to your children or grandchildren. However, before you assume that your descendants want, deserve, or are even capable of handling it, there are some things you need to think about first.
Cording, Sr., never pressured any of his four children to follow in his footsteps, nor even made them work for him during school breaks. That may be because he himself originally had other plans.
After earning a Master’s from Columbia University in special education, Cording, Sr., worked with emotionally-disturbed children for several years, running the landscape business on the side. Eventually, the business he’d started as a teenager—mowing lawns—then expanded into landscape and swimming-pool design, and began earning him more than he could ever make teaching.
College for Cording, Jr., included a year abroad at Oxford University in England, because he “wanted to get as far away from his family as possible, just to have the experience.” Only after a two-year stint in Japan as a Navy officer did he call his Dad and say, “I’d like to work for you.”
“There was absolute silence on the other end of the phone,” Cording, Jr., recalls. “He’d thought there was no chance, because I’d been so firm about it.”
At first, working for his dad was supposed to be “a bridge” to graduate school or law school. However, after a year, he found that he really took to the business. When he finally did go to grad school, it was for a Master’s in landscape architecture.
Cording, Jr., says that looking back, he’s not surprised that things worked out this way. His Eagle Scout project was to landscape his high school. And at Oxford, when told to pick a project, he chose to research the historic trees at each of the university’s 38 college campuses.
Sometimes, employees resent the boss’s kid coming in and assuming a status they haven’t earned, at least in their view. Cording, Sr., says that hasn’t been a problem at CLC. “All the men look up to Rich. They know this company is better with him as co-owner.”
He describes how Cording, Jr., took on three or four different roles, and improved operations. Besides ordering supplies and managing all the projects, he gets the crews out in the morning. “It used to take an hour to get 30 men out. He’s got it down to about 15 minutes.” Now, when the foremen come in, their trucks are preloaded, and they’re handed to-do lists.
That’s not all. Coming in, he thought the CLC website looked “unprofessional.” So, he learned how to code, and redid it. He didn’t like the quality of the pictures, so he taught himself photography. Now he personally shoots every project. “He’s practically a professional photographer at this point,” says his father proudly.
Three of the four Cording children now work in the business. James, 26, does sales and design, and Eric, 25, heads up the spraying and deeproot fertilization department. Their sister, Elisse, 31, is a teacher.
Orlyna Mattera-Starr, now 52, worked beside her father every summer, starting at age 12. But she, too, never intended to take over the business, begun in 1956 as Frank Mattera Landscape Contractors, Inc., in Fairfield, Connecticut.
At Rutgers University in New Jersey, she majored in Italian contemporary literature, and minored in business. “We were talking about our future plans, when one of my roommates said to me, ‘Why don’t you just go into your Dad’s business?’ and I said, ‘No way! I want to do my own thing,’” which was to work overseas for an American-based company.
Instead, after graduation, she went back to Rutgers for landscape design courses, mainly so she could serve her dad’s clients better. “Everything just kind of came together for me at that point,” she says.
In the spring of 1985, at age 22, she joined the business full-time. Her father made her vice president, and changed the name of the business to Frank Mattera and Daughter Landscaping Contractors, LLC.
Over the years, she has been left to run things more and more, as her parents increased the number of months they spent on their property in Italy. Now that her dad is 82, it’s pretty much all hers. “I’m very creative, so I love this,” she says. “Every job is different, and challenges my mind.”
The Matteras had legal papers drawn up years ago, regarding Orlyna’s succession. Rich Cording, Sr., on the other hand, has a simple plan: “One day, when I’m 100 percent done, I’m just going to sign a piece of paper that says it’s Rich, Jr.’s company, and give it to him.”
The Matteras made a gradual transition over time. One pitfall of that approach, and one that Rawls often sees, is when a founder wants to step away, but doesn’t fully trust that his successor(s) can get the job done. So, he keeps hovering, occasionally exploding when something happens he doesn’t agree with.
“We call that ‘seagull management,’” says Rawls. “The founder swoops in and—pardon my French—craps all over everything.”
When I called to speak to Danny Lizamo, Sr., the founder of Danny and Sons Irrigation and Landscaping in Chicago, Illinois, he passes the phone to son, José. At 26, he’s worked with his dad half his life, since age 13, doing “whatever was needed, sweeping the floor at first.”
Now, he does “everything,” describing himself as the secretary, treasurer, manager and appointment setter, essentially running the business for his father, for whom English is not the first language. He also works in the field alongside his brother, Danny, Jr., 28.
Besides building landscapes and installing irrigation systems, the three (there are no other employees) do backflow testing, winterizing and complete sprinkler system repairs, hardscaping and snow work.
José started learning how to do all these things at an age when most kids are still watching cartoons. He’s grateful to have the skills, even though Lizamo, Sr., hasn’t always been the most patient teacher. José laughs, comparing his dad to Red, the irascible paterfamilias on “That ‘70’s Show.”
Even when kids work reluctantly for dad, they still learn something important. As soon as Scott Haskins’ daughters were old enough to toddle behind him, he had them help with fall cleanups, picking up sticks and acorns. Does he feel that he’s taught them the ‘work ethic’ by doing that? “Yes, definitely,” he says.
Though he changed the name of his Tilton, New Hampshire-based company to Four Daughters Decks and Landscape, he isn’t sure any of the quartet—aged 20, 17, 12 and 8—will want to take over someday; he feels they’re too young to know yet.
At the Willow River Company Landscaping and Tree Farm in Hudson, Wisconsin, owner and founder Ron Shimon focuses on tree production. (The company also does design/build and landscape installation.) He started the company in 1983 as the Eagle Ridge Nursery, following a career as a county forester. In 1987, he and his late father, a plumber, bought the current 30-acre site in 1987 together, and started planting trees. Another 120 acres were added 13 years ago.
His three sons, Dan, 34, Jim, 32, and Eric, 30, started helping out as soon as they could walk. “It was, ‘You can come along with Dad and plant trees, or stay home with Mom.’ They always wanted to come with me. Like my grandsons do now—they just want to shadow me all the time.”
All three boys went to the University of Wisconsin, earning degrees that serve the business well.
Dan earned a degree in landscape architecture; Jim, in business; and Eric, in forestry, like his dad. Shimon and his three sons are equal partners in the business, each having a quarter share.
Now, Dan does the estimating and design work; Jim keeps the books, and also repairs and maintains the equipment. Eric works in the nursery and does tree sales. “Dan and Jim are more into hardscapes,” says Shimon. “Eric and I are more into the trees.”
Like the Shimons, the Cordings play to each other’s strengths. Cording, Jr., discovered he doesn’t care for sales, but likes working with established customers and earning repeat business.
“I like asking, ‘How’s the family?,’ spending 20 minutes talking about our lives, before the client says, ‘By the way, we’d like to plant some more trees back here.’ My dad’s much better at going out and meeting new people, getting to know them, eventually making them feel comfortable hiring us.”
Shimon says all three of his sons are “pretty good at working with people. They’re all able to go out and sell something; it’s a strong point for all of them.”
He says it sets them apart from “the kids nowadays—they’re afraid to talk to people. Everything’s on a tablet, texting…they don’t have communications skills anymore. How are you going to sell landscaping jobs if you can’t talk to anybody?”
Family or not, when people work together, disagreements will naturally come about. The only real argument the Cordings, Sr. and Jr., ever had was over one unhappy client.
“I’d let a $5,000 something fall through the cracks,” admitted Cording, Sr. “It wasn’t that significant, but in his mind, it was an egregious error in management. He said to me, ‘I can’t accept this. I want 100 percent client satisfaction.’” “I’m thinking to myself, ‘This kid’s crazy!’ You deal with 300 customers a year; one of them is going to be nutty. I said, ‘It’s not in the contract. We’re totally in the right; this person’s just taking advantage of us.’” “He said, ‘Dad, I don’t want this customer bad-mouthing us to other people.’ Well, he redid it, the client was thrilled, and the next year, she recommended us for a $100,000 job. After that, I shut my mouth.”
Now, “If an issue arises, either I deal with it or he does, or we do it together,” said Cording, Jr. “There are so many instances where his initial idea or mine was not as good as the subsequent idea we got by discussing it. We both know that we’re stronger as a team.”
The Cordings and the Shimons have one thing in common: they get along well within their family units. When they have disagreements, they can discuss the issues rationally. They’re lucky; things in families don’t always go so smoothly. And they can really run off in a ditch once the next generation takes the reigns.
Making the transition
When sibling rivalry rears its ugly head, it can be a major roadblock to making a smooth transition. Because now, they’re not fighting over who gets to play with the fire truck.
One solution for this is to create a ‘family covenant.’ “We sit down with each sibling individually,” says Rawls. “They’re each asked what their reasonable expectations are of each other, and how they all want to be treated.”
A family covenant isn’t legally binding, but the process of creating one gets all the issues out into the open. “We’re not miracle workers; we can’t fix things that happened 20 years ago,” says Rawls. “But the family will get an outline of everybody’s roles and responsibilities.”
To siblings who can’t get along, he advises: “If you don’t like each other, go home to your own families. You don’t have to talk to each other outside of work.”
But for parents and children, working in a business together can reap rewards far beyond the monetary.
“I have the joy of being in business with my sons every day,” says Rich Cording, Sr. “It brings tears to my eyes that I have this gift in my life.”
A thriving business built from scratch is a great gift, too. Before you let your children put their hands on the stick, however, make sure they’re ready, willing and able to drive it.