They’ve been there, done that, and now are sharing their experiences.
Three family businesses will share strategies and pitfalls around succession planning at an upcoming webinar through the Prairie Family Business Association.
It will be held Jan. 7 at 10 a.m. CST and be presented by:
- Dave and Jan Johnson, second-generation owners of Reliabank, which was founded in South Shore and celebrated its centennial in 2020.
- Jarod Stec, third-generation owner of Stec’s Advertising, which his grandmother founded in Rapid City in 1981.
- Darcy Christenson, second-generation owner of Sioux City-based Quality Telecommunications & Triview Communications, which recently marked 30 years in business.
“These families demonstrate the power of spending time working on your business. If you want to be a multigenerational family business, you need to set aside time to plan for the future,” said Stephanie Larscheid, executive director of the Prairie Family Business Association.
“Being intentional about communication will increase the likeliness of a successful transition. Just like these families describe, there is great benefit to having someone facilitate your family meetings. Reach out, and our team can put you in touch with a facilitator who has experience with family businesses.”
The families you’ll hear from are honest, candid and definitely willing to share what they found does and doesn’t work. We sat down with them for a preview of the insight you can expect.
How did you begin your leadership/ownership transition? What were your first steps?
Jan Johnson: Eleven years ago, Dave told all our staff he was retiring after the centennial. That now has come and gone, and he has not quite retired, but at that time we did really get more involved with the Prairie Family Business Association. I think Dave was always aware we needed a plan, but this connected us with an adviser who now facilitates our quarterly meetings, and it really has made the difference to move us forward.
Dave Johnson: We participated in the family business retreat at the Paul Nelson Farm, and at that point, our sons indicated they wanted to retain ownership in the business, which was a pleasant surprise for me. They decided they don’t want to follow me as CEO, so now we’re working through what that transition could look like.
Jarod Stec: My dad and I had a conversation in which he expressed a desire to retire in five years, but those years kept moving. Every year it was five years out. So at one point, I asked how we were going to transition, and he said it would be the same way he and his mom did. I reminded him they had 30 years to transition, and he wanted to be gone in five, and at that moment, we realized we didn’t have such a good plan in place. He had a good friend who had been part of Prairie Family Business for a long time, and we attended a conference, and it was an eye-opener as far as resources for people in our situation.
Darcy Christenson: We really started at the Prairie Family Business Association annual conference by asking the question. It was just for my parents to realize they couldn’t just pass away, give me and my brothers the business, and everything would be roses and butterflies going forward. So the conference was huge to put things in perspective and help us realize we had to begin putting steps in place to have a true succession plan.
What stands out as a pivotal point in your transition?
Jarod Stec: We took advantage of a live case study offered through Prairie Family Business Association, and that was a pivotal moment because it showed a lot of the ways we could accomplish what we were trying to do. We knew one way and knew there were other ways but didn’t know what they were. From there, it rolled pretty quickly.
Dave Johnson: It was pivotal when we realized our sons would rather work in the business as opposed to liquidate and take equity, so that helped set in motion other decisions. And I also knew they didn’t want to follow me as CEO, so I was totally confused, but then we met the Lloyd family through Prairie Family Business, and they had been in the same situation and yet were able to find someone within the family to take over the CEO position, so that was an eye-opening experience for me.
Darcy Christenson: After the conference, we never realized how many experts there were to help us and how important it was to have a succession plan written out.
We used a live case study, which really put things into perspective. It lined us up with the experts we ended up using, and my mom took the lead as far as beginning to put it down on paper.
Looking back, what are some things that went well and you would encourage other families to consider?
Dave Johnson: Bringing in nonfamily members into leadership has really worked well for us. That was a stumbling block I couldn’t see past when we first got involved.
Jan Johnson: We insisted our sons go to the Prairie Family Business conferences, and that was really important. And one of our sons became involved in a peer group, which really helped him buy into the concept of transitioning more.
Jarod Stec: Once we got going, it all went smoothly. The biggest thing is making sure having tough conversations didn’t ruin our personal relationships, and that went really well when it could have been difficult.
Darcy Christenson: Bring in the spouses. That was something we did to show them what we were doing, so it gives them an idea of what’s going to happen. We didn’t realize how important that was until we went to a family business retreat and met others who had gone through divorce and realized the challenges that could create.
Looking back, what are two or three things you wish you would have done differently?
Jarod Stec: When I came into the business, it would have been beneficial to sit down and have a conversation about the future from the very beginning. My dad was unsure I was in it for the long haul, which turned into a trial period that lasted five years. Talking about succession from the very beginning would have removed uncertainty.
Darcy Christenson: I wish we would have started earlier too. My brothers were in the business for five to 10 years more than I was but never thought of themselves as owners. It was always the thought that Mom and Dad would be there, so it wasn’t until they began talking about planning to retire that they began transitioning into leadership roles.
Dave Johnson: I wish I would have bought my life insurance. Once this got formalized, the business took off at a higher level and required some additional debt. So I wish I would have bought more life insurance when I was younger.
What is one piece of advice or encouragement you have for other family business owners?
Dave Johnson: Invest in your legacy. You have to quit thinking about it and get into action. When you’ve worked your whole life at a business, you’ve touched not only your family but your customers, vendors and employees. It’s worth the investment to go to a retreat, work with a facilitator, come to a conference.
Darcy Christenson: Get connected to all the facilitators you can. We’ve used multiple facilitators, including one recently who helped guide through a strategic leadership plan.
Jarod Stec: If you’re a member of Prairie Family Business, take advantage of the resources available, and if you’re not a member, check them out because that’s how my dad and I started. We would not have nearly a good enough plan if we were not exposed to everything we were exposed to through Prairie Family Business. Of all the organizations we’ve joined, it’s been the most beneficial.
Ready to learn more? Click here to register for the webinar, and get ready to learn Jan. 7.