Developing viable strategies and avoiding pitfalls when transitioning the leadership of family-owned businesses from one generation to the next was the focus of a Feb. 12 session at the International Production & Processing Expo (IPPE) held in Atlanta.
ATLANTA – Kelly Green, owner of Birko Corp., a food safety technology and solutions provider based in Henderson, Colorado, said there was nothing formal or official about her transition into the family business after she graduated from college.
Instead, she recalled, her grandparents, who founded the company, basically assumed she would take the reins after college. After the death of her grandfather in the late 1970s, her grandmother took over as chairman, president and CEO, “right up to the point that I exited college and came right into the business.” With no experience, she said, “It was a bit terrifying.” She, as the second generation of family ownership wasn’t heavily involved in the business and her initiation was more like a baptism by fire. Succession planning, she said, is about keeping the family intact “but also having it run as a professional organization that can be carried on to the next generations that come through.”
She said there was no formal plan in place for her to take over the business from her grandmother, who was over 80 years old at the time of Green’s college graduation. When it became clear to Green that the expectation was for her to take the reins, she insisted that they needed to consult outside, non-family leadership advice and talent because Green felt she was too young and inexperienced to lead the company. Previously, there was an informal board playing that role, but it was an undocumented arrangement and it loosely consisted of retired family members.
“That was probably the most difficult conversation between a family owner and another family owner,” she said, but the eventual outcome and discussion with the shareholders was positive and began the process of planning for the future leadership of the company.
“We didn’t have the depth and the bench on the family side of things, so we went outside and sought out our CEO,” she said. Green met Mark Swanson while the two of them were earning master’s degrees in business administration. Green went on to hire Swanson as CEO about 10 years ago and was part of the process of bringing non-family members into the business. Green serves as chairman of the board and president of Birko.
This is the second in a series of articles covering the IPPE seminar Succession Planning in Family Business.