He advised the American Association of Meat Processor members in attendance that a vision for success is vital for businesses of all sizes. Too often, company leaders get too caught up in daily operations and because there is no path to success, many lose control of their business.
“Your business has a destination,” he said. “Do you know what that direction is? What does success look like for your business?” he asked.
Clemens recounted how he became part of the company’s third-generation of Clemens family members leading the firm and why so few family businesses survive past the second generation of ownership. With a record-high $650 million in sales this past year, Clemens says the recently completed fiscal year came on the heels of one of its worst financial years in its history. Part of the successful rebound was due to the company’s “business family” structure, which was developed just after celebrating its 150th anniversary in 1995. While celebrating the company’s longevity publicly, he said there was little to celebrate financially and swift change was afoot.
“Ten years ago we became a business family,” he said, which involved some tough decisions, including cutting many family members from the payroll. This was part of a strategy to make the company’s profitability grow along with its sales.
“We are not a family business,” he said, and as such, maintaining family harmony is not one of the corporate goals. The transformation wasn’t popular with many family members initially, said Clemens. Changing paths for the company required revolutionary changes. “This is not fun work,” he said. But looking back, the family and the business is stronger because of the transformation. And in an industry where consolidation continues to reshape the competitive landscape, Clemens points out that his is one of the only surviving medium-sized, full-line meat processors left standing.
Clemens admitted no family-run company aspires to be forced into a financial position of having to establish a new path and committing to a successful business destination at all cost. But hoping for the best instead of facing reality will lead to the demise of the company. “Hope is not a destination,” Clemens said.