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Family business that embraces employee ownership transitions to fourth-generation leadership

Posted in ,   |  October 27, 2021

At an age when most people would be retiring, W. Fredrick and Ferne Edney became business owners.

It was 1951, and Fredrick had spent a career bringing wind power to rural homes that previously didn’t have electricity. By late in his career, he had a choice – transfer to South Dakota or Texas – which led him to a sales territory from their new home base of Huron.

A few years later at 65, he retired there and started a company selling a broader range of equipment to implement dealers.

“He and my grandmother started the company, and she did the accounting in a spare bedroom at the house, and they rented space in a lumberyard as a warehouse,” said Doug Edney, their grandson.

“He’d mainly been selling to implement dealers, so he handled everything, including farm equipment, and continued to call on customers but with different products and his own company.”

Seventy years later, Edney Distributing Co. Inc. is marking a milestone anniversary with a transition to a new generation of leadership and focus on continuing to evolve its business.

Building the business

After World War II, there was “a huge pent-up demand for farm equipment,” Edney said.

And the business benefited. Edney’s father, W. Milton, joined the business and expanded it, becoming president in 1960 following Fredrick’s death. Milton’s brother, Dale, came on board in 1962, serving as vice president until retiring in 1993, and their mother, Ferne, continued serving as secretary-treasurer and office manager until she died in 1974.

“At that time, we had a need for more people, and I came on the radar and my father thought that might be a good fit,” said Edney, who started out in the warehouse after graduating from USD.

“That was the last thing I wanted to do because I had worked there during the summers going back to junior high, but my dad came and talked to me, and we decided it would be a good place for me to at least start.”

As it turned out, he never left.

Edney Distributing now includes a network of 1,500 dealers, as far away as Canada but focused on the Upper Midwest. As a wholesale manufacturer, the company works with more than 50 suppliers worldwide in the ag, lawn and turf, forestry and light industrial industries.

“We have employees who have been with us for decades,” Edney said. “And we’re really proud of that because they’ve spent most, if not all, their career in this company, so their history is the same as ours.”

Early on, Edney Distributing decided its employees should share in the ownership of the company. An employee stock ownership plan, or ESOP, was established in the 1970s. Employees qualify by reaching age 21 plus 1,000 hours of service.

“My grandfather and his brother were really forward-thinking,” said Edney’s daughter, Jenni, the company’s president. “They really cared about our employees and wanted a way to show appreciation and for employees to benefit from their efforts, so that as the company grew the employees would also benefit.”

It was only the second ESOP formed in South Dakota, she said.

“I think that’s so amazing and something I really respected about my grandpa. He was a lifelong learner and not afraid to try new things. I look back with admiration for the foresight he had to create that plan for our team members, who benefit from it to this day.”

Fourth-generation assumes leadership

She has followed in her father’s footsteps.

“Not dissimilar to my dad, I didn’t plan on working in the family business,” Jenni said.

Her degree is in psychology, and she has experience in retail and financial services. But when her grandfather died in 2007, she felt the pull to come back and help.

“I finally pushed my way in and wrote my own job proposal and said I’d come help for a year,” she said.

That was 14 years ago. This past August, she became company president.

“I fell in love with the people and the company, and it’s just a joy to get to work with my dad,” she said. “We work really well together and have complementary skills.”

Her brother, Brian, also spent 12 years in the business building the company’s first website and overall technology infrastructure before leaving for a career in the medical device industry.

Doug Edney has transitioned to “a title yet to be determined,” which means he’s spending more time traveling and advising while easing out of a day-to-day role.

“My dad was 82 when he passed away, and I think he’d be here working today if he were alive, so it’s important I recognize the time to look at transition,” he said. “And I’m very lucky that Jenni is in the business and very capable, so that allows us to look at transition a little differently than my parents and grandparents.”

The board of directors includes Edney, his wife, Lynn, and daughter Jenni, and he’d like to add to it, he said.

“I give my dad a lot of credit because he’s been so courageous and shown a great deal of leadership, engaging in tough conversations with me and being opened to some of my outlandish ideas,” Jenni said.

“We’ve been able to collaborate and create a really solid foundation for our company to continue to grow. Our suppliers know they can count on us, our dealers know they can count on us, and our employees know they can count on us, and the hard work we’ve been doing ensures we will be able to keep our commitment.”

That includes transitioning the company to the Entrepreneurial Operating System, or EOS, an approach that allows Edney Distributing to identify gaps on its team and “helped us get the right people in the right seats,” Jenni said. “We can more effectively communicate the direction the company is going, and every employee owner knows how to contribute each day to move us toward those goals. Being an ESOP really meshes well with EOS because it’s so empowering to our team members.”

The EOS connection also led Edney Distributing to become a member of the Prairie Family Business Association. The company, which has its administrative offices in Minnesota, had participated in another family business event series in that state and met some additional Prairie Family Business Association members.

“So I checked it out and participated in the virtual conference in 2020, and I couldn’t believe what I’d been missing out on,” Jenni said. “The presentations and participants were exactly reflecting the challenges we face as a family business and as a business based in the Midwest. I felt like, ‘Oh my goodness. I found our people.’ I’ve been so pleased. What a dynamic group of really interesting people.”

They’ve participated in webinars, are currently in the board school and went to the 2021 conference in person.

“We’re thrilled to have connected with the Edney family,” said Stephanie Larscheid, executive director of the Prairie Family Business Association.

“What an fantastic fourth-generation business succeeding regionwide. We’re so glad to have been a resource for them already and equally excited for them to connect with other families who are going through similar journeys. They have a lot of best practices to share, and we know more great things are ahead for them.”