How Platinum guided a family business toward successful succession and new growth
Situation
An 80-year-old privately held manufacturing firm, led by a thirdgeneration family member for 30 years, had reached a plateau. Sales were slow and the CEO/owner was weary with the business, customers and employees. He was surprised to have his oldest son leave a very successful sales position to enter the family business.
Challenges
- The weary father and energetic son needed to develop a shared vision for the company, but it was difficult for the father to give up control.
- There was little managerial talent inside the business, and no plan for the owner’s exit or succession.
Intensifying competition from global companies had eroded profitability, and new impact of Internet access to customers was growing each year. - The father did not know what he would do if he wasn’t working in the business.
Solution
Steve Coleman of Platinum Group was invited to be the catalyst in helping the father and son work more effectively together and map out a long-range strategic plan for improved growth and profitability. This process identified a need for experienced managers in finance, operations and manufacturing.
To address rising competitive forces, the decision was made to narrow the company’s focus on strengths in mature markets. This strategy, in addition to investment in new technology and distribution channel resources, became the driver for change that would generate new growth.
The CEO participated in a monthly owners’ roundtable facilitated by Platinum Group that introduced the concept of a transition sabbatical — a structured time away from the business to explore the feasibility of exit and testing readiness of management successors. It also would help him see the possibilities of life beyond work.
Results
The company hired a skilled manager to run finance, IT and operations, as well as an experienced manufacturing leader. Results from new leadership and strategies were gradual but positive. After two years of thoughtful consideration, and then active preparation, the CEO/owner embarked on a five-month transition sabbatical after naming his son as new CEO. The father who left as an owner/manager returned as an owner in retirement, serving only as board chair, with many ideas for how to spend his time productively. The business is on a two-year growth track.
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