Craig Hess, president of Speco Inc., is proud to have his two daughters, Jaclyn (left) and Charlee, represent the family’s fourth generation to own and operate the company.
Each family-operated business is as dynamic and different as the history and background of each of the families. However, most family-owned companies serving the meat processing industry share a passion for playing an important role in feeding people, a noble calling worthy of their family name. Companies providing equipment, technology or supplies essential to meat processors might start with an industrious entrepreneur who brings in other family members out of necessity as their business grows, while others are established family businesses that may or may not be the best fit for other family members. Some gravitate right to their family’s business while others take a longer, winding road to get there. Some opt for a different career altogether. For many equipment and technology suppliers in the industry, a family business focused career is crystal clear, while for others a bit of vision correction provides career clarity.
In his fifth decade working at his family’s business, Craig Hess had a vision as a 10-year-old, looking from across the street at the company’s single building and the potential of what could be for the company his great-great grandfather founded nearly a century ago. That company has grown to be an industry-leading supplier of blades and plates for grinding, chopping and cutting meat products.
“I remember thinking someday I wanted to grow that business to occupy the three buildings between it and the corner,” said the third-generation owner and president of Speco Inc., based in Schiller Park, Ill. The company now occupies five buildings, he adds. Bob Grote, chief executive officer of Columbus, Ohio-based Grote Co., recalled his entry into the business his uncle founded in 1972 was not exactly a childhood dream. In fact, working with the family’s slicing and food assembly manufacturing company wasn’t on his radar until about 2000, after working with an industrial equipment supplier in Ohio for several years.
“At the turn of the millennium I decided I needed to change career and industry as I felt like I plateaued,” Bob said. “Given my Uncle Jim was such a successful businessman, I met him for lunch to seek his advice and thoughts on what I might pursue. At the time, he had just bought out his long-time business partner at Grote.”
The new owner quickly realized he needed to fill some sales positions, which was perfect timing for Bob.
“Jim asked me at lunch if I might have interest in being part of a rebuilt sales team at Grote,” he said.
After a couple of months of contemplation and negotiation, he took the leap.
“I joined Grote as an outside salesman in July of 2000.”
For Kelly Green, her entry into the business her grandparents founded in their garage in Ogden, Utah, was in many ways by default. After her grandfather, a chemist, died in 1977, Green was strongly encouraged to run Birko, a provider of industrial cleaning solutions – alongside her convincing grandmother – despite her status as a recent college graduate with no experience in the family’s growing chemical supply company. Green, the third-generation owner, president and chairwoman of Birko, which is now based in Henderson, Colo., said learning from the founder early in her career was invaluable and gave her an opportunity to carry on the family tradition.
“I had the opportunity to work directly under my grandmother who was the president and majority owner of the company,” she said.
Green recalled the words of her grandmother back when she said, “This is a great entity and a great opportunity for Birko to continue on.”
She said it was a daunting challenge that she decided to take on.
“I had a huge, huge learning curve as a family member coming in,” she said. “I had to dog paddle pretty darn quickly.”
Learning the hard way
Hess said he was exposed to the family business early, but when it came time to commit, he paused.
“I guess I was brainwashed as a very young child. I would work summers and spring breaks, packing blades as a kid,” he said.
However, after graduating from college in the early ‘70s, Hess wasn’t absolutely sure he wanted to join the family business and took a year to soul search and explore his options.
“Somehow I negotiated a one-year-off deal to decide. That year was probably one of the best lessons I could have learned – traveling, working bad jobs for other people. I was realizing that maybe owning your own business and working for yourself might not be so bad,” he said. “I also had this revelation that there is always a back door or fire escape; if you don’t like it, you can just simply leave. That was over 46 years ago, and I never looked back.”
Like any entrepreneur, Hess struggled early in his career and goals were modest at best. When he first started with his family’s business, success was often gauged on whether the company could make payroll each week and pay the bills to keep the lights on and keep its vendors happy.
“No kidding,” Hess said, “we were one step ahead of the sheriff.”
But hard knocks can be a very effective learning tool, he added.
“It was really a great business education,” Hess said, “how to build a business by pulling yourself up by your own bootstraps.” The appreciation for what it took when the business was just surviving, long before it was thriving, he said, is a lesson he tries to teach to his two daughters, who represent the fourth generation to now work in the family business.
Gracefully transitioning from one generation to the next is another valuable lesson Hess related.
“I think one of the biggest challenges in a family business is that slow, delicate succession dance you do with your father, or whoever is passing the business down to you.”
And there is no shortage of opinions and people willing to give advice about the best way to pass the torch, often from sources who’ve never gone through the transition.
“You have to live through it and experience a generational succession change in a family business to really ever understand it.”
Getting the right people
Birko’s Green said while she was absolutely committed to the company’s success and carrying on the family’s business, her background and experience made filling her grandparents’ shoes a challenge.
“I jumped in full force and recognized, ‘gosh, I wasn’t the right person to be in that seat,’” she said.
Considering what would ensure the growth of the company and taking a step back allowed her to realize that bringing in a non-family member in the CEO position was the right decision. And Mark Swanson, who Green had met while attending graduate school, was the right person. Swanson joined Birko in 2008 but not before some hand wringing and heated conversations among the stakeholders in the family.
“Family businesses are a very prideful entity,” she said, and in this case there was plenty of resistance to involving non-family members because of the overriding mindset that “we built this, we don’t need help; we got this on our own and we can do this.”
Green realized the importance of putting the right people in the right positions and, as she said, “hiring people that are smarter than me. I have to understand as a family owner that we need to find some really strong talent to fill those voids, and it started with Mark Swanson.”
Looking back, it’s been nearly 12 years since Swanson was hired as CEO. Green said that seemingly unthinkable and hotly debated step of bringing in a non-family member into the leadership group taught the entire leadership team the lesson of “leave your ego at the door,” which has become somewhat of a battle cry at Birko.
Climbing the ladder
After four years at Grote Co., Bob was promoted to vice president of sales, filling a void created by Geoff Rawes, who was elevated to the role of president at the company, where he planned to work for a handful of years before retiring.
Anticipating there would be an even bigger role to fill in a few years, Bob went back to his uncle to discuss how he might succeed the retiring president after he stepped down. He worked hard to prepare himself for the elevated position.
“Leading up to Geoff’s retirement in early 2008, I earned my MBA, participated in the company’s advisory board meetings, led its acquisition efforts and did whatever I could to prepare myself to take over as president in March 2008,” he said.
Fast forward three years into his tenure as president and it was clear that Grote’s business had grown to the point that Bob needed a full-time chief operating officer to help him carry the load. Bob’s brother, Jack, joined the company assuming the role of COO and president, and Bob’s title shifted to CEO.
“We worked out a deal with Jim to buy into the company, ultimately ensuring that Grote will remain privately held in family hands at least for another generation,” Bob said.
But climbing that ladder for the first 11 years was not without challenges and lessons to be learned. Bob said customers and even employees assumed that based on his last name, he must be a food industry expert, which he was not.
“Overcoming this misconception took effort both in the factory and out on the road. I am fortunate to be an engineer by education with a working background in technical sales and automation. This background helped me quickly learn the equipment and many of the applications. With the customers it was recognizing them as the true experts and explaining how it was done in their factory. From there I was able to build on my knowledge and how I may be able to use our equipment to help with their application.”
Hess makes a point of telling others who are considering joining their family’s business that they should know there are risks and rewards that are different from a corporate job with no family members.
“A family business is like a double-edged sword,” Hess said. “One side can be the most wonderful, productive life tool you’ll ever possess. The other side can be the most destructive weapon you’ll ever possess. I’ve seen family businesses destroy families,” he added, which can include irreparable damage to relationships including divorces, grandparents not being able to enjoy their grandchildren and other family dysfunction.
Sometimes small families are less susceptible to controversy. Less can be more in some family businesses as more family participation can create more complications.
“I was very lucky it was just my father and me,” Hess said. “My father and I had a saying we honored: ‘The mutual admiration club,’ or in other words, respect each other. So many business decisions are not worth jeopardizing your family relationship.”
Bob Grote reminds those considering going to work with their family business that expectations can initially be unrealistic.
“Expect that there will be preconceived opinions of you when you come onboard, especially if you didn’t grow up in the business. You will have to demonstrate that you are bringing value to the organization and not just another name.”
Demonstrating a willingness to learn while advancing through the ranks pays dividends while helping the company grow, Bob added.
“If you can come in without a title, then advance, it will be better received,” he said. “Grote is truly a business family. We make decisions regularly that do not directly benefit the family but are the best for the business. If you are not willing to put the business ahead of your own wealth accumulation, then maybe a different career path is something to be considered.”
Meanwhile, Green at Birko, said continuing to learn and networking with other business leaders is essential. For her, that meant going back to school at night to earn an MBA.
“That was a tremendous asset that allowed me to get into other networks of people,” she said.
One of those networks included Swanson, who Green went on to hire as a top-level leader at Birko.
“It allowed me to get outside of my own fishbowl and meet and network and expose myself to other industries. That was the No. 1 piece. I would highly suggest any family member make sure that they continue their education too,” she said.
Looking back, Green also said there is tremendous value in learning from customers’ experiences, even if that means working in the supply chain for another company before joining the family business.
“Check those boxes of getting your MBA, work closely with customers, be a part of the vendor supply chain and work for another company to build that expertise.”