FIFTH GENERATION LEADERSHIP:
BRADLEY CORP. CEO
ETHICAL WILL SUCCESSION PLAN
HELPS SCHOEP'S OWNER FAMILY STICK TO BUSINESS
A SUPPLEMENT OF
Dear Readers, WISCONSIN FAMILYBIZ
Welcome to the inaugural issue of Wisconsin FamilyBiz, a brand new annual magazine from BizTimes Media.
126 N. Jefferson St., Suite 403 Milwaukee, WI 53202-6120 PHONE: 414-277-8181 FAX: 414-277-8191
We got the idea for FamilyBiz from the readers of BizTimes Milwaukee, many of whom own or run family businesses themselves. We get consistently good feedback on the stories we publish that address the unique concerns of family owned and closely held businesses; for us, the logical next step was to provide a resource for the whole state of Wisconsin.
WEBSITE: wisconsinfamilybiz.com CIRCULATION E-MAIL:
2017â€™s Wisconsin FamilyBiz looks at five key areas of interest to any family-owned business, regardless of Dan Meyer, publisher industry. Though there are obviously more than five concerns facing the leadership of these companies every day, our choices for this issue â€“ Leadership, Legacy, Succession, Estate Planning and Family Dynamics â€“ touch on the ideas we hear about the most. As the owner of a family business myself, I couldnâ€™t be prouder or more excited to launch a publication like this. I value your feedback, and invite you to write me directly at Dan.Meyer@BizTimes.com with any questions, concerns or ideas for next year.
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Thanks so much, BIZTIMES EDITOR:â€ˆ
DAN MEYER President, founder, BizTimes Media
David Borst, Leah Call, Jo Gorissen, Sherry Herwig, MaryBeth Matzek, Alysha Schertz, Ben Stanley, Bill Wyman
2017 WISCONSIN FAMILYBIZ TABLE OF CONTENTS ART DIRECTOR:
A note from the president
Family Business Organizations
C O V E R S T O R Y : CEO Bryan Mullett on five generations of family leadership
Wisconsin Community Foundations
CHAPTER: ESTATE PLANNING
CHAPTER: FAMILY DYNAMICS
Davis & Kuelthau
19 Crafts, Inc. leader plans for the future
21 Three sisters are Zander Pressâ€™ fourth-generation owners
13 The ethical will
25 Clear ground rules for a happy family business
CHAPTER: SUCCESSION SPONSORED BY:
Reinhart Boerner Van Deuren s.c.
15 Clear succession plan helps Schoepâ€™s owner family stick to business
19 The Maximus Effect
Alex Schneider.......firstname.lastname@example.org ACCOUNT TEAM:
Linda Crawford.......email@example.com Maribeth Lynch................ firstname.lastname@example.org Christie Ubl....................email@example.com Molly Lawrence.....firstname.lastname@example.org Lena Tomaszek.......email@example.com DIRECTOR OF OPERATIONS:
25 Hometown pride is the heart of Endres Manufacturing
30 Former Oshkosh Bâ€™Gosh CEO Bill Wyman on giving back
PRINTING: J.B. Kenehan Printing CHAPTER: LEADERSHIP EXCLUSIVE ONLINE CONTENT:
WISCONSIN FAMILYBIZ 201 7
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A product of BizTimes Media
FAMILY BUSINESS LEGACY INSTITUTE EXECUTIVE DIRECTOR: David
Borst 828-9298 EMAIL: firstname.lastname@example.org ON THE WEB: fbli-usa.com PHONE: (414)
family business organizations
The Family Business Legacy Institute (FBLI) is a nonprofit partnership between private firms and families. Our goal is to assist family businesses in transitioning their firm from one generation to the next. As a hub of all things family, we sponsor a Saturday radio show on WTMJ at 6:20 am called “All Business.” Our website contains a depository for articles and education related to the family business. We host events throughout the year – social, educational, networking, open houses and roundtables – all uniquely structured to bring the family together. We bring our top-tier sponsor firms together to advise our members in wealth management, mergers and acquisitions, banking and finance, accounting and estate planning, business insurance and sales consulting. We are not a consulting firm, however. We are an organization designed to assist our members from every generation and in any situation. The University of Wisconsin-Madison Family Business Center is proud to celebrate 20 years of helping family-owned businesses across the state and beyond to address the many challenges they face. A close-knit community of members and sponsors interact in a trusted environment to exchange ideas, advice and experiences. We provide a variety of opportunities for families and their businesses to address the unique and challenging issues they face, regardless of their stage of development, growth or transition. NATIONALLY RENOWNED SPEAKER SERIES
UNIVERSITY OF WISCONSINMADISON FAMILY BUSINESS CENTER Sherry Herwig (608) 441-7347 EMAIL: email@example.com ON THE WEB: fbc.wisc.edu DIRECTOR: PHONE:
Prominent family business experts share insights on trends and techniques that can be applied to the family business. The curriculum is driven by the needs and issues of FBC members and include topics such as ownership control and transfer, family relationships, leadership, and communication/conflict. NETWORKING BREAKFAST MEETINGS
These educational programs are presented by Family Business Center Sponsors. The FBC Sponsors provide a wide array of experience and are experts in their various fields: banking, law, financial management and accounting. FOCUSED PEER-TO-PEER LEARNING GROUPS
Led by local family business experts, these confidential forums allow individuals with similar experiences, positions and backgrounds to discuss sensitive issues and critical family business topics. NEXT GENERATION LEADERSHIP BOOTCAMP
Designed specifically for future family business leaders, this one-week immersion program helps participants develop their own leadership style, execute solid decision-making skills, and guide effective governance, trusts, and estates. We invite you to be our guest at an upcoming program. Visit our website for a complete calendar. The Wisconsin Family Business Forum (Forum) was founded in 1996 and exists for the sole purpose of fostering healthy family businesses. The Forum is a partnership of family businesses (including owners, family members and non-family employees), professional service organizations and the University of Wisconsin-Oshkosh, College of Business. It is a place where all come together to explore the challenges and rewards of family enterprise, and to grow in knowledge, skills and experience. The Forum offers educational programs, networking opportunities and information sharing through workshops, seminars and peer groups discussions. The workshops and seminars include monthly programs on best practices and feature national experts on family business topics such as succession planning, governance, communication culture and values.
WISCONSIN FAMILY BUSINESS FORUM Meridith Jaeger (920) 424-2257 EMAIL: WFBFDirector@uwosh.edu ON THE WEB: wfbf.uwosh.edu
EXECUTIVE DIRECTOR: PHONE:
Peer groups are made up of 8-12 individuals that meet monthly for an opportunity to learn from and discuss strategies and concerns with one another in a problem-solving and leadership development mode.
F A M I L Y B U S I N E S S E D U C A T I O N C E R T I F I C A T E : This seven-day course of study provides basic learning for the next generation of leaders regarding the dynamics of leading and maintaining a family business. Participants earn a Certificate in Family Business Education from the Wisconsin Family Business Forum upon completion of the program.
The Forum is home to a unique resource center designed to provide relevant family business information to members, sponsors and benefactors.
FAMILY BUSINESS RESOURCE CENTER:
2017 WISCONSIN FAMILYBIZ
LEFT: Lynde Bradley, Dr. Stanton Allen and Harry Bradley.
RIGHT: Illustration from the original wash-
How the Mullett family has survived nearly a century of successions at Bradley Corp. BY BEN STANLEY
anging on a wall in an office at t he Brad ley Cor poration’s global headquarters in Menomonee Falls is a photograph of the company’s original patent from nearly 100 years ago. In it are a few hand-drawn images. A circular tub shaded with fine, slanted lines. A pipe running through its center attached to a spray head. Tiny numbers inked with elegant curves labeling different components. They are designs for the first Bradley Corp. industrial washfountain, the cornerstone product of a 95-year-old Wisconsin manufacturer of commercial plumbing fixtures and washroom accessories that sells to clients all around the world. Now in its fifth generation, the company owes its remarkable longevity as a family-
WISCONSIN FAMILYBIZ 201 7
owned and operated business to a different surname than those contained in the highprofile signatures written on the patent. Jotted beneath the word “inventor” in its lower right-hand corner is the loopy signature of Harry L. Bradley, who helped form the Allen-Bradley Company in 1910 with his older brother, Lynde Bradley, and a Milwaukee physician named Dr. Stanton Allen. Harry Bradley’s daughter, Jane Bradley Pettit, was a prominent Milwaukee philanthropist. In the late 1980s, she shelled out $90 million to build the BMO Harris Bradley Center. Her first husband, David Uihlein, Sr., was heir to the Joseph Schlitz Brewing Company. The Pettit National Ice Center in West Allis is named for her and her second husband, sportscaster Lloyd Pettit. Beneath Bradley’s name is the more elegant signature of attorney Louis Quar-
“It’s really important that the job hat, the shareholder hat and the family hat remain separate... That’s the secret sauce to keep a family business thriving.” —Bryan Mullett, CEO, Bradley Corp.
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THE WASHFOUNTAIN The Bradley Corporation is steeped in history. A room on an upper floor of its headquarters has an entire wall covered with information about the company’s past wisconsinfamilybiz.com
TROY FREUND PHOTOGRAPHY
les. Quarles, at the time he signed it, was a senior partner at a law firm he founded in 1910. The firm would eventually combine with a competitor and grow into the second-largest in the state. Now based out of the 411 East Wisconsin Center downtown, a sign on the roof of the 408-foot high-rise bears its name: Quarles & Brady. Through decades of consolidation and economic change, those high-profile names would eventually disappear from the ownership of the firms they helped build. Allen-Bradley was acquired by Rockwell Automation in 1985; Joseph Schlitz Brewing Company was acquired by Detroit-based Stroh Brewing Company in 1982; and Quarles, Herriott, Clemons, Teschner & Noelke merged with Brady, Tyrrell, Cotter & Cutler to become Quarles & Brady LLC in 1974. But the name in control of the Bradley Corporation since the beginning has remained the same. Mullett. And preserving its legacy hasn’t been easy. “If anyone tells you it’s all hunky-dory with a family business, they’re lying to you,” said Bryan Mullett, 44, president and chief executive officer of Bradley Corp. “Successful family businesses are the ones that realize the key is admitting you’re dysfunctional. When you come to grips with that, and you know it, understand it and can communicate it, the more successful you’re going to be.” On a morning in January, with the picture of the patent hanging behind his head, Mullett leaned forward in his chair at the Bradley Corp. headquarters and laid out a few key tenets of the Mullett family’s philosophy on business leadership. Among them: get a plan early, develop a thick skin and be ruthless about staying focused. “Make sure the family is informed and make sure there’s separation,” he said. “It’s really important that the job hat, the shareholder hat and the family hat remain separate, and that clear roles and responsibilities are defined. That’s the secret sauce to keep a family business thriving.”
Bryan Mullett, president and chief executive
on a historical timeline. The first year listed: 1921. It was the year two of Bryan Mullett’s ancestors partnered with a third local businessman to purchase the patent for the washfountain from Harry Bradley. Right around the time the U.S. was entering World War I, and tanks, mortars and guns thundered in Europe, machine shops and factories were whirring in Milwaukee. Long lines were forming on factory floors around sinks only built to accommodate one person at a time when employees needed to clean soot, grease and dust off their hands and arms. The lines were causing congestion, taking up space and limit-
officer of Bradley Corp.
ing efficiency. Harry Bradley dreamt up a solution to this growing industrial problem. He thought up plans for a circular sink that made more efficient use of space and could accommodate as many as eight employees at once. He started making prototypes. In 1919, he patented the idea. But in 1921, Bradley found himself with an excess of concepts and a dearth of capital as the fledgling Allen-Bradley Company struggled through a short, post-World War I dip. He sold the patent to a group of three businessmen. Their names: Gustav Gros2017 WISCONSIN FAMILYBIZ
senbach, Howard A. Mullett and Louis Schlesinger. Grossenbach was Howard Mullett’s father-in-law. The trio set up the Bradley Washfountain Corporation, named for the inventor of its first product, and began making and selling washfountains. As the company began manufacturing other plumbing fixtures and accessories, it dropped its signature product from its name. By 1928, Mullett would become president of the company. By 1953, his son, Howard G. Mullett, would land the title. After Howard G. Mullett’s death in 1980, his son, Donald H. Mullett, took leadership. And in the spring of 2016, Donald Mullet’s eldest son, Bryan Mullett, arrived at the helm. But the story behind their transitions is much more complicated than the timeline would suggest, and the Mulletts have not had a continuous grip on executive leadership, even while maintaining ownership or controlling shares. “There were three presidents in between my dad and grandfather,” said Don Mullett, 74, over the phone from Australia, one of several countries he’s visited since Bryan took over day-to-day control of the company. There were also three non-family members in charge between Don and Bryan. “We have a history of people running the business for us until we felt a family member was ready for the job,” Don said.
PLANNING FOR A TRANSITION No matter how meticulously planned or how old the company, family business succession is always tricky, but some transitions are more clear-cut than others. “Some of these things are just far more difficult to transition than people might think,” Don said. “There are always feelings hurt. It’s not an easy thing to do. They might think it’s simple, but there are rifts and barriers and crises and family issues. You just have to make sure you’re trying to understand all sides of the business and how it fits into that.” When Howard G. Mullett died, his son, Don, then in his late 30s, was the clear successor. How the company would be passed down to his three sons, however, was more opaque. Perhaps the most essential piece to a successful transition is legal and estate planning. Don got started with his in 1990. 6
WISCONSIN FAMILYBIZ 201 7
“When you look at companies that don’t make it past the second or third generation, they don’t do estate planning well,” said Bryan. “That’s usually the first trip-up.” Estate planning for a family business decides who gets what in the event of the owner’s death. It can serve as a safety net to make sure certain things are taken care of right away – like making sure the surviving family members have enough money to pay for things like an estate tax, or establishing a clear and immediate transition for company leadership. It can also serve as the foundation of a future succession plan. In Don’s case, through his father’s estate planning, he took leadership when Howard died. During his estate planning, he decided to split company wealth among his three sons – Bryan, Erik and Christopher. He then decided to get all three of them involved with different aspects of the company as they grew up so he could examine their strengths and weaknesses in different roles. “I put the kids in really a lot of different areas of responsibility from the get-go,” Don said. “All of them worked in the shop, so they knew the business from a product perspective. They were moved through different experiences, worked as different types of managers. You really need to spread them around, see how they do with decision-making, what their management style is.” But getting experience outside the family business is also essential, Bryan said. “Allow your children to take time to explore other positions so they can understand how other leaders work, how other bosses work, to learn the good and the bad from other organizations,” Bryan said. “The CEO has to be patient enough to allow for that time, to see how the children develop. And then, after four to five years of that, bring them in and take another four to 10 years and say: ‘where is the individual best suited to be to be successful?’ “In some cases, they all might be able to be the CEO; in others, one might be able to be CEO. Take the time to let them flourish outside and inside, and see who is best suited to be in what position. And then really try to support that and drive it home.”
MAKING THE CHOICE In 2007, when Don hit the traditional retirement age of 65, he didn’t feel any of
his sons were ready to take over the business. So he brought in an executive from the outside, Michael Sipek, to run the company as CEO. Sipek had a combined 30 years of experience as an executive at Western Industries and Rexnord Corp. “I think the wisdom of all that, when you make these decisions, you want to be comfortable. And it gave me plenty of time to develop the kids,” Don said. “At 65, there wasn’t one of my boys who was ready to take over the overall management of the corporation. Some people mature quicker than others, but I just didn’t feel I was ready (to make the decision).” But the time was nearing. Bryan, the oldest son, got his start in the 1990s at a company in Dallas, Texas called Braswell & Associates, also a commercial plumbing and washroom accessory manufacturer. He worked in sales there for a few years and was happy with his position and the warm Texas weather. Then, in 1997, his dad called. “There was a job opening here back when our washroom accessories division was in Milwaukee, and it was a regional sales manager job, and my father called me,” Bryan said. His dad offered him the job, and Bryan initially turned it down: “I said, ‘Well, I like it down here. It’s warm.’” His dad tried again: “I think it’s probably a good time to come back.” Bryan again turned him down. Don laid down an ultimatum: “Well, I’ll let you make the decision. But there’s a job opening now, and I’m not promising a job opening in the future.” “It took me a while to come to my senses,” Bryan said and laughed. “I told my boss that, and he said, ‘well, that’s a pretty good point.’ He said, ‘you may want to reconsider, you’re always welcome here and we’d love to keep you, but probably the wise decision is to go back and see what it was like to work in a family business and for your father.’” So he did. And over the next 20 years, he worked his way up the rungs of the company ladder, eventually leading the company’s fixtures and accessories manufacturing business and overseeing all aspects of corporate purchasing. The middle brother, Erik, 42, started out as a firefighter and EMT for the City of Waukesha and Village of Hartland. He held that job for about five years before taking a A product of BizTimes Media
TROY FREUND PHOTOGRAPHY TROY FREUND PHOTOGRAPHY
job at Bradley as manager of a distribution center in Ontario, Canada, where he stayed for two and a half years. From 2001 to 2007, he worked as the plant manager and manufacturing supervisor at The Mills Company, a Bradley Corp. subsidiary located in Marion, Ohio. From there he worked his way up, and by 2013 had become the vice president and general manager of Bradley Corp.’s Building Specialties Group. The youngest brother, Christoper, 34, started his career in 2008 working as a territory manager of Proudly African Imports in the British Virgin Islands. The company is a wholesaler of imported products from African countries, including clothing, soaps, musical instruments and accessories. He held that job for two years before returning to Bradley Corp. to take a sales job. For the past three years, he has been the vice president of sales for Bradley Plumbing Corp. “My father, you put yourself in his shoes, he did everything in his power to make it work with three boys running the business,” Bryan said. “However, somebody has to be in charge. You can’t have three cooks in the kitchen. It’s OK that it doesn’t always work out all the time. “It’s taboo to talk about. It’s sensitive. But if families don’t make difficult decisions, the business isn’t going to be around for many generations.” In 2012, Bryan was named president of Bradley Corp. and assumed broad responsibility across the company’s product groups to implement its long-term strategic plan. Don maintained his role as chairman of the Bradley board and Sipek stayed on as CEO. In 2014, his brother Erik, who had been promoted to VP of the company’s building specialties group a year earlier, left the company. He currently owns his own consulting group, Mullett Consulting Corp., an aircraft management and leasing company called Private AirShare and nine Snap Fitness locations in southeastern Wisconsin. In 2016, Bryan was named CEO. “When that came down and I was asked to take over, you can imagine how difficult it was for my other two brothers,” Bryan said. “But once that was determined and supported by not only Don but also the board and the family, it became very clear. That was the most challenging time. I can tell you, it was a lot of stress. Trying to make it all work for the family, to get
Patricia Hill and Joe Senner at work on the factory floor.
everybody through the trials and tribulations, it doesn’t take weeks – it takes years. You have to have the patience to get though it and some thick skin. You’re going to take bullet holes, you’re going to take hits across the chin, you’re going to have scars. “One person might say, ‘that’s not worth it,’ but another person might say, ‘now that we’re through it, it was worth it to see how things can flourish and how the family and business can continue to grow.’ “Erik went down a different path, but he’s still a shareholder, he’s still on the board,” Bryan said. “We helped him take another path because it just didn’t work. Those are some of the trials and tribulations of a family business. Christopher, my youngest brother, he’s in the sales department and he’s doing a wonderful job.”
FULL STEAM AHEAD From its early days as a washfountain manufacturer, Bradley Corp. has maintained its identity as a commercial plumbing and accessory manufacturer, but much has changed over the past 95 years. For one, the company is much larger. It has a total of 550 employees, three manufacturing plants – all located in the United States – and a distribution warehouse in Canada. For another, the company has
formed multiple divisions and acquired several subsidiaries over the past three decades. Bradley Corp. works closely with architectural design firms to furnish and lay out bathrooms in commercial buildings and sells a wide range of commercial and personal plumbing accessories. Some of them are quite innovative. The company is rolling out a new line of motion-activated hands-free wash stations that includes a dispenser for soap, a faucet for water and a hand drier side-by-side on one sleek, continuous bar. The benefits, Bryan explained, are twofold: hand-wash2017 WISCONSIN FAMILYBIZ
ers can do all three steps in one location with minimal hand movements, and they donâ€™t have to touch anything that might have accumulated germs or bacteria from other users. Bryan is also bullish on the prospects for future growth. The company opened its first sales office outside the United States in Dubai, in August of 2016. â€œThereâ€™s always somewhere in the world where the economy is growing and there are places where the economy is declining,â€? said Jon Dommissee, Bradley Corpâ€™s director of Global Marketing & Strategic Development. â€œThereâ€™s industrial revolutions going through Indonesia, India, places like that right now. China is in a little bit of a slowdown, but itâ€™s still the largest economy, and the largest construction economy, in the world. Weâ€™ve always aligned our company with where the trends are moving. We analyze a lot of trends.â€?
Bryan said the company sees a big opportunity to expand its sales presence in Africa and the Middle East. â€œSince Iâ€™ve been on this planet, I havenâ€™t seen construction like I have over there,â€? he said. â€œItâ€™s unbelievable how quickly they build. They donâ€™t have the red tape. When you get outside the city, it just goes to open desert and camels, so you can just put up another building because nothingâ€™s there. Itâ€™s just fascinating to see the growth. Weâ€™ve put boots on the ground there and made significant investment to grow in that region.â€? In terms of the overall health of the company and the outlook over the next few years, Bryan is optimistic. The transition years were some of the most difficult of his life, he said. â€œYou have to wear three hats, and you have to be disciplined,â€? Bryan continued, referring to his three roles as a Bradley Corp. employee, a company shareholder
and a member of the Mullett family. â€œYouâ€™ve got to be disciplined to wear the right hat at the right time. â€œAnd thatâ€™s challenging.â€? He stressed the importance of looking outside the walls of the business for guidance, inspiration and, when needed, blunt advice. â€œEach child, each sibling, should have a mentor unrelated to the business,â€? Bryan said, reflecting on the past few years. â€œI canâ€™t express enough that having a mentor to help the individual with family drama, and help the person with personal growth and development, and then be able to â€“ when thereâ€™s a lot of stress â€“ let that person vent, is essential. â€œBut that mentor also needs to be able to hit that guy right between the eyes and say, â€˜youâ€™re dead wrong.â€™ That mentor is a key, key piece.â€? And now that the transition is over, itâ€™s full steam ahead. g
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LEFT: After 70 years in
CRAFTS, INC. LEADER PLANS FOR THE FUTURE
business, Crafts, Inc. continues to innovate. Today it is one of the nation’s top suppliers of “green” roofing. RIGHT: Workers install a
Company thrived after leadership shakeup
Crafts, Inc. metal roof.
BY ALYSHA SCHERTZ
his year, Crafts, Inc. of Manitowoc will celebrate 70 years as a family business. While not without challenges, the company has grown significantly, and is now a third-generation roofing and sheet metal contractor, serving clients throughout Wisconsin. Steve Weinert, president of Crafts, Inc., has not only led the company through several stages of growth, he’s also led the company through a crucial strategic restructuring. “I took over in 2010, and since then we’ve basically transformed the firm,” he said. “We are twice the size we were at that point, and have also gone through signifi-
cant changes in regards to leadership – we kind of pushed a big reset button.”
THE JOURNEY TO A MORE FOCUSED FUTURE Crafts, Inc. was founded in 1946. At the time, the company consisted of several divisions that specialized in roofing and sheet metal, electrical, and heating and appliance sales. In 1952, the company divisions separated to form independent companies. Leonard “Spike” Kraft, Weinert’s maternal grandfather, retained the Crafts, Inc. name, and the roofing and sheet metal business. It’s the only division of the original company still in existence.
Steve Weinert, president of Crafts, Inc.
2017 WISCONSIN FAMILYBIZ
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Bob Weinert, Leonardâ€™s son-in-law and Steveâ€™s father, purchased the company in 1967. Steve grew up in the business, sweeping floors and working in the warehouse. He earned his journeyman card as a roofer before enlisting in the U.S. Army. Steve later earned his MBA in production management and took a job as lead for several shoe factories at a family-owned business in England. â€œIt was really an interesting job,â€? Steve said. â€œI had about 450 people working in my group of plants. I gained a lot of perspective and experience.â€? He rejoined Crafts, Inc. in the late 1980s and served in various roles, including project manager and vice president. Eventually, a breakdown in family trust forced Bob Weinert and his board to reevaluate the direction of the company. Key members of the family leadership team were replaced, and Steve took over. It wasnâ€™t easy for anybody, and the legal proceedings surrounding the issues would go on for several more years. But the company survived â€“ and thrived. â€œDuring that time we were really focused,â€? he said. â€œWe took a look at our company and thought about our value statement â€“ why we wanted to be in business.â€? The team eliminated unprofitable product lines and market segments, and even let go of customers they couldnâ€™t service while making a profit, he said. Today, the company has offices in Manitowoc and Appleton, employs about 80 people and has a plan to continue its growth trajectory.
THE TOUGH CONVERSATIONS THAT MUST BE HAD The shakeup of the leadership team was eye-opening for everyone involved in the business, Steve said. â€œAll of our existing agreements sort of got shattered throughout the changing of roles,â€? he said. With the help of its accounting and legal teams, and utilizing resources through the Wisconsin Family Business Forum (WFBF) at the University of Wisconsin Oshkosh, the family was able to not only get everything back on track, but also prepare for generations to come. â€œLike so many things, this process is about communication,â€? said Stephen Shellwisconsinfamilybiz.com
Crafts, Inc. 3403 Menasha Ave., Manitowoc PRODUCT OR SERVICE:
Roofing & sheet metal contractor YEAR FOUNDED:
1946 FOUNDING FAMILY: TOP: Crafts, Inc.â€™s 70th anniversary celebration turned into a true family affair, with more than 200 employees and their families attending. BOTTOM: In 2016, Crafts, Inc. celebrated 70 years in business.
man, manager at Schenck, SC, who worked with Crafts Inc., during the process. â€œThe first thing to do is identify the stakeholder goals â€“ not just the shareholders, but the employees, and even other family members not directly involved in the business. Those goals will help define the process.â€? Just recently, the family completed the documentation that would provide Steve with options regarding the family trust and the voting shares of the company in the event something happens to his parents. â€œItâ€™s never an easy conversation to have, but everyone approached the conversation from the perspective of the business and whatâ€™s best for the business moving forward,â€? he said. Itâ€™s a process that can at times be difficult, but open and honest intentions are important. â€œYou have to think about contingency plans for the unknown, and sometimes itâ€™s
â€˘ Leonard â€œSpikeâ€? Kraft, Founder â€˘ Bob Weinert, Chairman â€˘ Steve Weinert, President WEBSITE:
difficult to talk about contingencies without making them sound like absolutes or scaring people to the point where they donâ€™t want to deal with any of it,â€? Steve said. This was a delicate, but important, conversation that Steve initiated with the help of the companyâ€™s outside partners, including the WFBF. Bob Weinert, now in his late 70s, still serves as chairman of Crafts, Inc. According to Steve, his father has been part of the business for nearly 60 years, and still works with a few of the companyâ€™s long-term clients, but mostly his role has become a strategic one. His mother, JoAnn, daughter of the original founder, Leonard Kraft, can remember being involved in the family business since she was 7 years-old. Steve meets regularly with his parents to discuss the business and its future. Bob and JoAnn currently own one-third 2017 WISCONSIN FAMILYBIZ
According to Crafts, Inc. president Steve Weinert, family is tightly woven into the company culture.
of the company, including all of the voting shares, he said. “My father has retained the voting shares since he purchased the company in 1967.” Today, those shares exist as part of his parents’ trust. Steve currently owns two-thirds of the company, all non-voting shares. He acquired the first third when he became president, and the second in August 2013 as the shakeup with the leadership team was coming to an end. “It really felt like part of the healing process – the culmination of the legal work and putting in place a new, formal plan to handle the estate moving forward,” he said. Steve is currently the only blood family member involved in the day-to-day operations of the company. He and his wife, Alison, have three adult sons. One works as a chemical engineer, a second is finishing up a computer science degree and a third is working on a degree from the University of Wisconsin – Milwaukee in geo-spatial intelligence. “Right now, they are doing their own things. I respect that,” he said.
A STRONG, FLEXIBLE PLAN FOR THE FUTURE The company’s new plan provides some flexibility in regards to the next generation. When it comes time for Steve, 57, to step away from the company, his children will have options that could include passive holding responsibilities, a purchase agreement or, if they end up taking interest in the business, an opportunity to earn a spot in leadership. For Steve, however, the “family” in fam12
WISCONSIN FAMILYBIZ 201 7
ily business extends beyond blood. “We have several second-, third- and even fourth-generations of families working with us,” Steve said. “A lot of the younger employees have expressed interest in solidifying their future with the company, and we’re definitely open to that.” The restructuring process has allowed the company to begin making room for those changes to happen. Several individual promotions were made recently in the company to help diversify leadership responsibilities and build the management team. Currently, Crafts Inc., is a little too small for it, but Steve said he “has a lot of respect” for companies with an Employee Stock Ownership Plan (ESOP) in place. “Some day, if we achieve enough growth, we can have everyone participate,” he said. “The biggest thing we’re doing is setting up a flexible program that will allow us to adjust and adapt as we grow. We want to be ready for any possibility that presents itself.”
READY FOR WHATEVER TOMORROW HAS IN STORE The company is not done growing, Steve said. Crafts Inc. has pioneered several roof systems and construction methods throughout the years, and continues to innovate. “The demographics in our company are unique, and skewed younger,” he said. “The younger workforce here is driving change and innovation at an unprecedented level.” The culture at the company is one of collaboration. Retirees at the company often stay on in a small capacity to help train the next generation.
“They want to be involved, they want to impart skills and ‘pass the baton,’ so-tospeak,” Steve said. Steve recognizes that people are the company’s most important asset, and the company remains committed to ongoing training and growth opportunities. “I’ve quickly learned that our company is much better off if I surround myself with people smarter than me,” Steve said. “Our employees are driving a lot of the change and growth in our industry.” Since the reorganization, Crafts, Inc. has developed an online interactive web portal for clients to quickly and easily access their order and warranty information. They’ve implemented the use of new adhesives and are a leading company in vegetative and sustainable – or “green” – roofs throughout the Midwest. “The culture of innovation and change here makes everything a lot of fun,” Steve said. “It makes you want to come to work.” At 57, Steve has started to think about retirement, but will probably take a less conventional route, similar to those of his grandfather and father. When Steve’s grandfather sold the business to Bob, he went on to become a successful construction safety engineer in the nuclear industry and still plays a significant role in the company. Steve envisions himself making several transitions of leadership. “For me, it’s about disciplining myself to not ‘just do it myself,’” he said. “I have a very talented and successful team in place, and I’m going through the process now of trying to balance staying relevant while also letting them lead and grow on their own.” g A product of BizTimes Media
Reading the will. Anonymous. (Source: Wikimedia Commons)
THE ETHICAL WILL
Use a video message to make your feelings known BY DAVID BORST
he room is dimly light. A large, burnished wood desk sits at the front of the room. Behind it, the family attorney. Chairs ring the desk, with the principals all seated and their minions standing and surrounding them as if cheering on a prize fighter. But there is to be no fight this day. Or is there? Is this the beginning of the match? The reading of the will after the death of the patriarch or matriarch is pictured in film as a momentous occasion, with the family greedily wringing their hands as they learn the fate of their inheritance. Invariably, someone is surprised and ends up with nothing or some small and worthless token – a final stab in the back from the grave. This grim depiction is not the norm, but rather the sensationalized version of what happens when the head of the household
moves on to their great reward. But, what if there is a family business involved? According to Eric Weiner, author of “Words from the Heart,” it doesn’t have to be like that. H-E-A-R-T is an acronym for the content in his book: Hope, Experiences, Appreciation, Religion and Treasures. After we are gone, it is more difficult to pass along the things that matter to us, but it doesn’t have to be. Writing an ethical will lays out all the things that are important to the writer. As Weiner writes, “Hopes for the future,” as well as passing along the “religion, spirituality and core beliefs” that make up the heart of the person are crucial to the successful ethical will. While writing a document might be legally the best approach, experts suggest that videotaping your will is even better. A video 2017 WISCONSIN FAMILYBIZ
can get across the emotion involved in the decisions you make far better than a piece of paper. Showing loved ones the treasures you are passing along to them while discussing it via video captures the essence of the item and the moment. The item itself may have monetary value, but what it meant to the owner may be priceless in terms of memory or history. Several years ago, a book by Randy Pausch called “The Last Lecture” was making the rounds of bestsellers. The book described the lecture he gave to his students, faculty, friends and family as he was dying of cancer and knew that it would be his last. Few of us get the opportunity to impart some wisdom to the world before we leave it. But why not make a point to share with those who matter something of real value? Some time back, I lost a colleague of mine in academics. She had been suffering from cancer that ultimately went to her brain. Years before she knew her cancer diagnosis, she and her husband adopted a child. Before she passed, she went and bought birthday, graduation and even a wedding gift for the child, so that she would be present at those special occasions. That is what an ethical
will captures – that presence, despite the fact that the person has passed on. If you are involved in a family business, it is no easier to talk about death than it is for any other family. In fact, it could be tougher. If you are the son or daughter, bringing up the topic appears to be insensitive or – worse – greedy, and if you are the parent, the topic requires you to come to grips with your own mortality. This is no easy task for either party, which is why the ethical will works. It allows you to videotape yourself (although there are professionals who do this, too) when you are ready to speak about the various things that need to be said. The video allows the emotion of the moment to come through. Telling the next generation that you want to continue with the family business tradition of giving Christmas hams to the employees comes across as far more real than if you passively told someone your intentions within the context of a document. Video conveys emotions you simply can’t express in writing. Another issue Dr. Weiner addresses in his book is forgiveness. All too often, I see people who have been alienated from their
families. They have either done something that they now regret, or have been angry with something to which they have been subjected. While offering an apology during your lifetime could save years of anguish, sometimes the ethical will allows you to set the record straight. It is not one last chance to say “gotcha,” but rather a chance to say “I am sorry” or “I forgive you.” We can’t go back and redo that which has been done, but we can exit this world with a clean slate. The ethical will allows us to set things right, which really helps the next generation carry on with the business, and with the business of life. A family business complicates many things, but it does leave a legacy for generations to come. An ethical will makes sure that legacy lives on long after the business owner turns out the lights on the business for the last time. g DAV I D B O R S T, E D. D. , is executive director and chief operating officer of the Family Business Legacy Institute, a southeastern Wisconsin regional resource hub for family business. He can be reached at firstname.lastname@example.org.
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LEFT: (Multi-generational photo) L to R: Walter, Paul, Alan, John, Rich, Eric and Lester Thomsen. RIGHT: Freezer storage inside the Schoep’s distribution facility.
PUT IT IN WRITING
Clear succession plan helps Schoep’s owner family stick to business BY LEAH CALL
choep’s Ice Cream Company has certainly mastered brand recognition: who hasn’t been known to enjoy a bowl, or even a pint? And while Schoep’s product can sell itself after just one spoonful, this third-generation family business has had to successfully navigate the challenges unique to familyowned companies to stay viable and on top of its industry. Founded by E.J. Schoephoester in 1928, Schoep’s has been under ownership of the Thomsen family since Peter B. Thomsen purchased the popular, Madison-based ice cream maker in its relative infancy in 1940. Keeping the same basic formula of fresh cream, eggs and fruit, P.B. Thomsen
expanded the market and product options for Schoep’s. Through the years, the company has added Gilles frozen custard and sherbet, as well as other frozen treats. Today, Schoep’s produces 10 million gallons of ice cream yearly and tops $60 million in sales, shipping its product to all 50 states and Puerto Rico.
PLANNING AND PREPARATION Succession planning is key to the longterm survival of a family business. That plan includes management succession, ownership succession and future leadership development. The Thomsen family has spent significant time and preparation on all three. Third-generation manage2017 WISCONSIN FAMILYBIZ
S P O N S O R E D
C O N T E N T
From Cash Flow to Career Opportunities, 4 Reasons to Participate In a Family Business By Gregory F. Monday, Shareholder, Reinhart Boerner Van Deuren s.c.
family business can be most successful as a family enterprise when its owners recognize, honor and support each family member's specific professional and economic objectives. There are four reasons why an individual may want to participate in a family business: cash flow, wealth accumulation, career/occupation and legacy. By identifying and understanding each family member's reasons for participating, owners can allocate the benefits and responsibilities of a business in a way that maximizes individual fulfillment and collective success. In addition, the flexibility of family business ownership and governance mechanismsâ€”including trusts and other estate planning techniquesâ€”can allow each family member to participate in ways that are most consistent with his or her objectives.
Cash Flow Participating in a family business as an owner or employee is one way to generate cash flow. Most marketable securities portfolios do not produce particularly high rates of income. In contrast, a family business can pay compensation or deferred compensation and other benefits to family members who work for the business. A family business can repay family loans with a variety of interest rates, and it can lease facilities or equipment from family members at reasonable lease terms.
Wealth Accumulation Wealth accumulation, or appreciation on invested capital, is another reason to participate in a family business. A family member often can invest concentrated amounts of capital in the business with greater confidence in the potential for appreciation. Family business stock prices are not usually as susceptible to irrational market forces as publicly traded securities. Further, as a shareholder, director or executive, the business owner can have substantial influence on stock appreciation. Many studies find that family-controlled companies perform better over the long term than public companies because families are less likely to emphasize short-term profits at the expense of long-term success. Furthermore, coupling the business with a family office allows for even more efficiencies and long-term, family-focused planning and benefits.
Career/Occupation Family members often benefit from occupational or career opportunities in the business that would not be available to them in a business that has no family connection. For example, a business that builds and manages hotels may provide its members with a wide range of occupational opportunities, including finance, marketing, design, hospitality, restaurant/ club management and executive
responsibilities. A family business also may be more willing to give its family member employees the time or flexibility they need to care for and raise their children.
Legacy Legacy is a fourth reason why some family members choose to participate in the business. A family member who is proud of the business' success and reputation in the community may wish to claim some share of that legacy as a family business leader, as a minority owner or through involvement in the family's charitable foundation or family office. To create the best possible family business governance, ownership and succession plans, the business owners should seek to understand what each family member values the most. Then, they should consult advisors to design legal and economic structures that allow each family member to serve roles in the business that are consistent with his or her reasons for participating, and allow the family, as a whole, to best serve all objectives.
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ment includes Alan Thomsen, CEO; Eric Thomsen, VP of innovation and technology; Richard Thomsen, operations manager; and John Thomsen, food service sales and special events. â€œAt the end of the day, the reason family businesses either make it or they donâ€™t has to do with politics,â€? said Alan Thomsen. â€œEach generation has to be willing to step back and let their personal differences stay outside of the business. I think that is the most critical piece. You can succeed a heck of a lot better working together than if you try to do it all by yourself.â€? When second-generation leaders Les, Walter and Paul Thomsen were in their 60s, discussion turned to the companyâ€™s plans for succession. â€œWe started having some discussions about company bylaws and what is going to happen. We began talking about it four or five years before we ever started engaging in a meaningful way,â€? said Alan Thomsen. â€œIt took a long time for us to be able to sit down and get together and validate, first of all, that the third generation was prepared; and then, that they wanted to commit to taking the company forward. So we started down a path of open dialog. We used some of the legal firms that helped us adopt our original company bylaws, and started setting up a path for transition.â€? Included on that path were plans in case of death or disease, as well as processes to handle new business opportunities. â€œWe have a board of directors,â€? said Thomsen. â€œAnd if anybody ever comes to us with business propositions or mergers and acquisitions, those things are vetted out and discussed at a board and/or stockholder level.â€? Some family businesses require the next generation to buy the company as opposed to inheriting it. That is currently not the case at Schoepâ€™s. The reality that the next generation may not be in the financial position to buy out the current generation played a part in the familyâ€™s decision. â€œThe current decision is to pass the company along, assuming there are owners in the business that are family members,â€? said Thomsen. â€œOtherwise, Iâ€™m sure we would look at another direction.â€? wisconsinfamilybiz.com
Schoepâ€™s Ice Cream Company, Inc. PRODUCT:
Ice cream, frozen custard, frozen yogurt and novelty treats HEADQUARTERS:
Madison YEAR FOUNDED: TOP: Schoepâ€™s distribution facility on Manufacturers Drive in Madison. BOTTOM: Schoepâ€™s original Hom-Pak packaging.
SMOOTH TRANSITIONS Alan Thomsen always expected to work in the family business. â€œWe were a pretty tight-knit group growing up,â€? he recalled, noting the management roles each of the second-generation leadership played. â€œPaul managed the office and sales activities. My dad (Walter) took care of first shift production, and Les would take second shift production and all the duties associated with that. So we were always as a family interacting between ourselves, cousins and long-standing employees. I think being part of something for so long and the family heritage just continued to draw me in.â€? Alanâ€™s uncle, Paul Thomsen, served as company president from 1974 to 2008. Alan assumed that role in 2012, adding CEO to his title in 2015. In between, nonfamily member Tim Timm served as CEO.
1928 FOUNDING FAMILY:
E.J. Schoephoester (founder), Peter B. Thomsen (1st generation of current ownership) CURRENT COMPANY LEADER:
Al Thomsen, president/CEO WEBSITE:
Timm is still involved in Schoepâ€™s as a company advisor and board member. â€œThat was part of our transition, to bring someone in from outside of the family who was knowledgeable in our businesses and was also tough enough to be able to walk down the â€˜political path,â€™ if you will,â€? Alan said. Alan holds the mentoring he received from Timm and others in the company in high regard. â€œI think that is unique to a family business,â€? he said. â€œWe tend to have a lot of mentors. We just donâ€™t necessarily recognize them as such until we are old enough 2017 WISCONSIN FAMILYBIZ
to realize the impact they have had on us.” Coming up through the ranks of the family business, Alan was impacted by a number of people. “We work with a lot of different folks who have different focus areas,” he said. “Not any one mentor can bring forth everything. You kind of have a shopping cart approach and hopefully you are in a position where you know what your needs are at your current business status.”
DEVELOPING THE NEXT LEADERS Alan and the other third-generation family members worked closely together at Schoep’s throughout their youth and adulthood. “We as the third-generation have agreed that any future generation needs to work somewhere else before they engage in the company. We want them to get out and have life experiences,” Alan said. “I think when we were growing up it was necessity. We all had to work hard to keep the family business going. We all played a part, and it was important to all of us.” Schoep’s currently employs a total of 122 people at its state-of-the-art produc-
tion facility on Division Street on Madison’s east side and at its distribution center near the Dane County Airport. Alan said he views outside experience as critical to company growth, whether from within the family or elsewhere. “Whether the next great person has the name Thomsen or not, you really aren’t concerned about that, because the most critical thing we have is a responsibility for 122 people and their families,” he said. “So if you put yourself ahead of those folks, you have made the first and last mistake in business.” While Schoep’s hiring strategy focuses on bringing key people to its management team, the company also allows its employees to grow and advance within the company ranks through training and education. “You always need to be looking ahead, training folks and allowing them to grow personally. If you allow them to grow, they are likely to stay with you longer. It’s a mutual commitment rather than a onesided deal,” Thomsen said. To assist in employee development, Schoep’s offers a program where it pays the
cost of employees’ education in approved areas of study.
MEETING FUTURE DEMAND Innovation and technology play a critical role as this family business grows and adds to its product mix. “We are spending a quite a bit of money and effort on developing protein-enriched products, either for ourselves or for other customers we co-pack for,” Thomsen said. “We are also spending time on new and innovative flavors and techniques to deliver the best possible product.” Understanding and meeting consumer demand is one secret to Schoep’s success. “I think we are in a really unique time now, where the Millennial population continues to grow, and we recognize that folks aren’t looking for a five-quart pail that they will put in a chest freezer at home,” Thomsen said. “They have limited space, and they are looking for an experience. And that experience usually isn’t greater than a pint. My time, our time – maybe a couple sitting on the couch sharing a pint – that is becoming more and more the norm.” g
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Richard Harris and Russell Crowe in "Gladiator".
THE MAXIMUS EFFECT Choose wisely to preserve your business legacy BY DAVID BORST
he movie “Gladiator” is at the top of my list of favorite films. For those who missed this one for fear of too much gore, let me sanitize the tragedy that unfolds in the movie. Maximus is general of the legions of Rome fighting against the barbarians to the north – the Germanic tribes. Marcus Aurelius, the aging emperor, wishes that the heroic Maximus would take over the running of the Empire when he is gone and tells Maximus this wish. But the Emperor has a son named Commodus, a ruthless and valueless son who believes the title of Emperor belongs to him through birthright. I am not giving you a spoiler alert because after all, this movie was released in 2000. You have had plenty
of chance to see it... The movie shows the murder of the Emperor by the villainous son, the enslavement of Maximus, who becomes a gladiator slated for death, and his rise to avenge the Emperor’s death in a valiant lunge at the usurping ruler – Commodus – killing him and freeing the empire for democracy and rule by the Senate. By now you are probably wondering what this has to do with family businesses. Plenty. Your business is your kingdom, your legacy. Often, children are very capable of working their way into the organization and succeeding the owners. But sometimes they aren’t. Sometimes the legacy is better served by an outsider – thus, The Maximus Effect. 2017 WISCONSIN FAMILYBIZ
This is not implying a regent role: this is suggesting total control and a new direction. The outsider who steps in would do so permanently. All parents try to raise their children with values reflecting their own. Most of the time, these values stick and when it comes to morality and ethics, the child is a natural, albeit imperfect (meaning not identical) reflection of the parents. In this way, we all carry a bit of legacy with us, regardless of whether the family we were born into was lucky enough to have a business. I reflect my parents, and my children reflect me. Not perfectly, but enough to know whether they were raised right. But sometimes the teaching fails. Whether the spawn is affected by hubris, jealousy, or some other personal conflict, it matters not. The best direction leads to devastating consequences, and when a family business is involved, this spells disaster for the legacy and often the firm. The interesting part of this is the vexing conflict the owner must go through, torn by the emotion of a child and a plan gone wrong, and a legacy that ends with him/her. All too often, business owners choose blood over what is best for the firm. On those rare occasions when an owner is able to see clearly with a 20/20 lens, the conflict is no less painful. It requires the owner to swallow pride and in the end put what is best for the firm above all else. It means the owner must turn their back on their children for the sake of the company and all the stakeholders. Think of the conflict that must go on
in the mind of the owner in these situations. “Could the next generation be better at managing than they have demonstrated thus far? Could I be wrong in assessing character?” The other side of that is, “Can I set aside my own self-interest for the betterment of the firm? What if the new person in control is no better than the next generation would have been?” The emperor Marcus Aurelius made his decision known privately to Maximus until it was time to let his son know his true intentions. This conversation did not go well, leading ultimately to his assassination at the hands of a powerthirsty son. Marcus seemed like a good ruler, with the exception of his attacks on some of my German ancestors… but he made one fatal decision. No, not the one to bypass his son. But rather, not to communicate his intent all along. This is the Achilles’ heel (mixing my historical references in an attempt to make my point). The owner of the firm should be transparent, especially as a parent. Surprising a daughter or son later in their life is not a good plan. All too often, owners leave tough decisions until it is too late or fail to properly groom the decision over a long period of time. Just like the stock market responds unfavorably to surprises, so, too, is it human nature to respond poorly when the plan has not been clearly articulated over time. Would Commodus have responded differently if his father had groomed him for the eventuality of another taking
the throne? Possibly not – but that is the Roman Empire. This is Wisconsin. Here and today, the owner owes it to the firm, the current employees, the customers and other identified stakeholders to turn the family business over to the most qualified. With the steady grooming hand of the owner over years, this most likely will be their child – the next generation – but the statistics are daunting, showing the failure rate of that next generation. Even with the ablest of forethought and guidance, the family business is likely to fail with transition. With 75-80 percent of U.S. GDP depending upon family businesses to survive transition, it is important that we do everything possible to assist in the grooming and tutelage of this next generation of business leaders. Rarely do we see an outsider so beloved and so humble that the owner has a crystal clear decision. The movie “Gladiator” refers to Maximus as the “stoic philosopher.” I am not sure that trait is best for running a family business, but his other traits – integrity and loyalty – are probably what the emperor was seeing all along. The Maximus Effect makes choosing family first a complex issue, even if you are the emperor. After all, you have your whole kingdom to look out for, and you will decide its entire future direction with this one decision. g DAV I D B O R S T, E D. D. , is executive director and chief operating officer of the Family Business Legacy Institute LLC.
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Three sisters are Zander Press’ fourth-generation owners BY MARYBETH MATZEK
rowing up, the three daughters of Zane Zander spent their time at the family’s commercial printer and newspaper business, but never gave much thought about someday running Zander Press themselves. Those thoughts, however, began to change as they got older. “I think we all needed to spread our wings and then come back to the business,” said Kris Bastian, who purchased Zander Press with her sisters, Darcy Zander-Feinauer and Beth Wenzel, in 2005. “We sometimes joke that this place is like the Hotel California – you can check out, but you can never leave.” The trio are the fourth generation of family members to own the business in Brillion, a small Calumet County city that
LEFT: (L - R) Kris Bastian,
sits between Appleton and Manitowoc on U.S. 10. Just three percent of family-owned businesses make it to the fourth generation, putting the sisters in rare company. Wenzel, the oldest of the three sisters, serves as company president, while Zander-Feinauer is a graphic artist and Bastian works in printing and sales. When asked how she became president, Wenzel replied “the other two ganged up on me and said, ‘You do it.’”
Darcy Zander-Feinauer and Beth Wenzel – fourthgeneration owners RIGHT TOP: Elliot and Margaret Zander – second-generation owners RIGHT BOTTOM: Noel and Zane Zander (seated) – third-generation owners
CO-OWNERS AND SISTERS, 24/7 Owning a business is challenging enough, but add in working with family members and the stress level can really rise. Fortunately, the three sisters successfully pull it off while still maintaining tight family ties. Wenzel gives credit to their 2017 WISCONSIN FAMILYBIZ
Preparing the next generation for family business leadership By: Mike Bradburn - Vice President, Commercial Banking at Park Bank
As business owners of the baby boomer generation look to retire over the next five years, for many of them, family members are a key component of this wave of change as the next generation prepares to carry on their legacy. I’ve seen this scenario many times over my career as the wave continues to pick up speed. A transfer from one generation to another in a family business has no one-size-fits-all approach, but the earlier that businesses start having these conversations about succession, the better. Attorney Dennis Hollman of O’Neil, Cannon, Hollman, Dejong & Laing, S.C., echoes this sentiment. For the past 35 years, Hollman has specialized in business tax law and succession planning. During this time, he has worked on hundreds of different succession planning strategies with clients, and he said the biggest mistake families can make when going this route is procrastination. Hollman views succession planning as a process, not an event. It’s an evolving dialogue meant to make the transition as fluid as possible. The problems come when the strategies aren’t well thought-out and discussed, which can lead to the professional and personal aspects of the client’s lives crossing over. Amanda Martin knows this well. Her father, Chuck Schwiesow, purchased the industrial coating and painting contractor Porta-Blast Inc. before she was even born. Now, she is the president and majority owner of what
Amanda Martin and Chuck Schwiesow, Porta-Painting
is now called Porta-Painting. Based on her conversations and inquiries into the business and its direction with Schwiesow and his former business partner Bruce Ash over the course of the prior year, Amanda was prepared when interest was expressed in her one day taking over the business. “I kind of saw it coming, because we’re pretty open with each other,” Martin said of her reaction when her father expressed interest in her one day taking over the business, “but I was also surprised when I was finally asked.” With experience in retail, bank branch and corporate banking support management and a degree in business finance from UW-Madison, Martin seized this opportunity, but she didn’t begin right at the top. She joined Porta-Painting as a project manager and estimator, and she worked for the company for about two and a half years before taking over as majority owner. That time was important to see if it still made sense for her, her father and Ash. She said that what has made her succession so successful is that it was well planned and the communication between herself, her father and the company was transparent from the beginning. It also helped that Schweisow has stayed on as vice president and minority owner, because where some employees might be wary of the boss’s daughter coming in to take over, he was able to show through his actions that the company is in good hands. Martin added, “From the beginning he said, ‘I trust you and whatever you do I know it’ll be the right thing.’” Like Porta-Painting, long-time generational family business and Park Bank customer, Hein Electric Supply Company is also looking to the future. Two years ago, Alexa Kohlenberg joined the family business that her grandfather, Sid Kohlenberg, took over in 1947 and is now owned and operated by her father, Ron Kohlenberg. After graduating with a bachelor’s degree in business from UW-Stevens Point, Alexa decided to work for a large corporation,
Alexa and Ron Kohlenberg, Hein Electric Supply Company
saying she wanted to “climb the corporate ladder.” She eventually felt the need to move to a smaller company, however. After much discussion, she joined her father at Hein Electric to learn every aspect of the family business. “I grew up with it at the kitchen table,” Alexa said, “now I get to live it day-to-day.” A program was developed by Chris Stoming, vice president at Hein Electric, to give Alexa first-hand experience – guiding her to learn, work and engage in all aspects of business operations. So far, Alexa has worked in nine different departments and visited all eight Hein Electric branches in the last two years. She has six more departments to cover, including the office of the president. Alexa explains, “After each experience, I sit down with Chris and share my insights and how we may consider doing things differently. Our associates have accepted me and know that my only interest is to do what is in the best interest of the company.” Ron adds, “Whatever path Alexa takes, whether it be management and/or ownership, the company is structured and is prepared to continue as a successful, independent business.” This is how a successful succession can be achieved – through communication, preparation and a solid strategy. The new generation brings fresh ideas and different perspectives, and if positioned correctly, this can lead to a lasting legacy for a family-owned business for the generation that comes after. Member FDIC
community, which she says is very supportive of family owned companies. Brillion is home to several well-known family businesses, including the Ariens Co. and Professional Plating. Upbringing also plays a key role. â€œWe know the right way to talk to people, thanks to how we were raised,â€? Wenzel said. As for mixing family with business, talking about work is not off limits during family gatherings. â€œWhen you gather with family and friends, you usually talk about work. When youâ€™re at work, you talk about your family. Itâ€™s no different with us,â€? Wenzel said. â€œWe donâ€™t avoid the topic. Weâ€™re sisters 24 hours a day and weâ€™re co-owners 24 hours a day.â€? Bastian said another key to their success is their leadership style. â€œWeâ€™re all laid back and very Type B,â€? she said. Like when most sisters get together, there is plenty of good-natured ribbing that takes place. Wenzel said itâ€™s probably a good thing they donâ€™t work together too much. â€œWeâ€™re all doing very different things and have our own areas where we focus,â€? she said.
A RICH FAMILY LEGACY But as an owner of a family business, there is still that pressure to be successful and â€œnot mess up,â€? Zander-Feinauer admitted. â€œYou donâ€™t want to be the generation that failed. Thereâ€™s a rich family legacy and it can be a huge burden to carry,â€? she said. Zander Press was founded in 1899 when Otto Zander purchased The Brillion News for $450. A teacher who was fluent in German â€“ which was key, since the community had a large population of German immigrants â€“ Zander grew the paperâ€™s circulation. His son, Elliott, came on as editor in 1927. After Otto Zanderâ€™s death in 1944, Elliot and his wife, Margaret, continued running the newspaper. Their son, Noel, joined The Brillion News in 1959 to cover sports. Elliotâ€™s oldest son, Zane, also joined the family business in 1960 after finishing college and serving in the Army. Elliot, Zane and Noel Zander incorporated the printing company that had sprung up alongside the newspaper, and in 1965 changed the companyâ€™s name to Zander Press Inc. Zane Zander focused on expanding the companyâ€™s growing commercial printing business. wisconsinfamilybiz.com
Otto Zander and his press, 1926.
Zander Press, Inc. PRODUCT/SERVICE:
Today, commercial printing is Zanderâ€™s core business, providing printing services to not only local businesses but also state and national customers with both offset and digital printing. The company still publishes The Brillion News and Lake to Lake Shopper. The Great Recession was challenging as companies cut back on printing, but Zander-Feinauer said the sisters weathered the change by being frugal and â€œholding on tightâ€? through industry changes. â€œWe owned everything here,â€? she said referring to the buildingâ€™s furnishings and equipment. Fully recovered now, Zander Press just completed its best five years in business, Wenzel said. Being flexible and forming partnerships with other companies has been key to Zanderâ€™s success. â€œWeâ€™re proud of being able to produce high-quality items at affordable prices,â€? Wenzel said. â€œWeâ€™ve stuck to our roots.â€? That includes being a part of their community. Zander Press is frequently approached to donate to local endeavors, whether itâ€™s in-kind printing services or a cash donation. â€œSince weâ€™ve been more successful these past few years, weâ€™ve been able to support whatâ€™s important to us and our customers,â€? Wenzel said. â€œItâ€™s important to
Commercial printing, newspaper HEADQUARTERS:
Brillion YEAR FOUNDED:
Otto Zander CURRENT LEADERS:
Kris Bastian, Darcy Zander-Feinauer and Beth Wenzel WEBSITE:
us to give back to the community.â€?
PLANNING FOR THE FUTURE Like many other family-owned businesses, planning for the future â€“ including future leadership â€“ is critical. For the sisters, itâ€™s one of their biggest challenges. They know itâ€™s one of the most important things they can do to ensure a fifth generation of family ownership, but so far the trio does not have a plan. â€œWe havenâ€™t addressed it. We should, but we havenâ€™t yet,â€? said Bastian, adding that the next generation currently ranges in age from 15 to 30 years of age. Zane Zander, who studied to be a 2017 WISCONSIN FAMILYBIZ
teacher before joining the company, never pressured his daughters into joining the family business – something his daughters appreciated. “There’s still time for them (the next generation) to become interested in the business,” Wenzel said. “It’s important they go out, spread their wings; maybe they’ll come back here. Our father never forced the business on us; our interest developed over time.” Growing up, all three worked at the company doing a variety of jobs, whether it was taking folders off the press while their grandfather watched – “We got paid 25 cents an hour and then would go get ice cream,” Wenzel recalled – or helping out in the office as needed. Zander-Feinauer was the first sister to officially join Zander Press. She began working at the company during high school and started full-time after studying graphic design in college. “I had the privilege of working with my dad for 19 years,” she said. “I watched him
and learned a lot.” When Zane and Noel Zander were getting close to retirement, they approached Zander-Feinauer and her cousin about buying the business. After that plan fell through, Zander-Feinauer approached her brother, who wasn’t interested. Next, she came to Bastian, who had worked outside the company before returning to Zander Press. She agreed to sign on as co-owner. The two then approached Wenzel, who had helped out in different areas through the years. “Our dad wasn’t surprised that all three of us wound up here; he was very pleased we got involved. It just took 20 years,” she said. The sisters hope members of the next generation will eventually take an interest. “There’s still a lot of time,” Wenzel said. “Succession planning should be a process, not an event.” Wenzel said the sisters have learned a lot from their participation in the Wisconsin Family Business Forum. She said the
group provides not only education, but also a network that connects owners of other family businesses. “The peer groups have been invaluable and you can speak freely,” Wenzel said. “No matter what kind of business it is or what the family dynamics are, we all have the same problems and the other members provide great feedback and advice.” Zander-Feinauer said connecting with other family business owners has been especially important to their small enterprise, which does not have the specialists on staff that a larger company does. “We may have an HR question. None of us are really HR specialists, but a larger company may have dealt with the same issue or have someone on staff they can ask,” she said. “The other members have our backs.” The sisters also look out for each other. “Half of the people working here were here when Dad ran the place,” said Wenzel. “We’re all like family and that’s why we’ve been successful.” g
Bonus chapter: Leadership
Leadership at all levels: Badger Mining’s “flat” organization empowers everyone
SAVE THE DATE! Wednesday, July 12, 2017 Learn from other family business owners and leaders how they’ve learned to navigate the complex issues related to growing a successful and sustainable family and closely held business.
Defining leadership in the family business: What does it really take to be successful?
Exclusively online at wisconsinfamilybiz.com 24
WISCONSIN FAMILYBIZ 201 7
Keynote, panelists and roundtable session topics TBA at
A product of BizTimes Media
Richard Caton Woodville “Old ‘76 and Young ‘48 (Wikimedia Commons, public domain)
CLEAR GROUND RULES FOR A HAPPY FAMILY BUSINESS BY JO GORISSEN
here are human dy nam ics unique to family-operated businesses. Fathers and sons, aunts and nieces, spouses, siblings, cousins – sometimes all of those and grandkids, too – can be working under the same roof, or at least the same logo. Obviously there are advantages, or you wouldn’t hear so often from other business leaders, “We operate this business like one big family.” As Thomas Petzinger writes in his book, “The New Pioneers,” “Family business has become a model for all business. Business today, more than at any time in a century or longer, is built on rela-
tionships – the very stuff of which families too are made.” The biggest plus for family-owned and -operated enterprises is, of course, loyalty in the ranks. A family business can be a vehicle for preserving family values and family wealth. Unfortunately, it can also be a vehicle for the disintegration of relationships to the point where formerly close relatives stop speaking to each other for a lifetime. You’ve probably seen both. Ideally, before opening the doors, family members should include in the business plan clear steps for handling the tough challenges they’ll face when money, 2017 WISCONSIN FAMILYBIZ
Isaac Massa and Beatrix van der Laen, by Frans Hals, c. 1622, Dutch painting, oil on canvas. (Shutterstock)
power and family emotions are all in the same mix. Over the years, I’ve learned some of the principles that can help families avoid the pitfalls and share in the rewards of this tricky business structure. HAVE FUN. Excitement can be in short supply in a family business if people are brought in without regard to their talents and aspirations. Quentin J. Fleming, in his excellent book “Keep the Family Baggage Out of the Family Business,” says many family-owned companies fail because the children have joined out of duty rather than desire. One business owner I coached insisted that his offspring work five years in another business before joining his organization. Close attention to career paths with ample opportunities for learning and growth can heighten the excitement each employee brings to the job. A commitment to having fun along with the hard work can prevent stagnation – one of the biggest threats to a family business. CREATE A FAMILY COUNCIL. How families choose to communicate is key. Without a plan or structure to foster healthy and open sharing of information, triangulation will occur. Triangles have sharp corners that can tear a family business to shreds. Triangles are lurking everywhere, in all those conversations that sound like, “I think Dad is having a lot of meetings with Jimmy. What do you think that means?” Or “Can I count on you to stand with me when I propose this new product? Everyone else seems to be against it.” Or, “I’m not sure Aunt Julia is with it any more. How can we get her off the board?” 26
WISCONSIN FAMILYBIZ 201 7
A family council is created to deal with business issues that affect everyone in the family. In one model, all family members are included in the regular meetings, whether or not they are employees of the firm. The family council doesn’t deal with operational issues, but everything else. How things are going, the professional development of individual employees, direction for the future, how the organization is responding to outside events, all of that. If there is this dependable venue for dialogue, family social gatherings can be social indeed instead of opportunities to grasp at bits of information about the business, perhaps from Uncle Charley out on the porch after he’s had a couple of cocktails. In another model for a family council described by West Bend-based Serigraph, Inc. chairman John Torinus, the first half of the meeting is about the business; the second half deals “with strictly family issues, such as care for elderly family members, estate planning, education trusts and even the sharing of a family cottage.” I like this model. Whatever model is used, a family council with regular meetings is essential. It does not replace the advisory board or board of directors, and information must flow between all of these entities. DEVELOP A CLEAR SUCCESSION PLAN.
“We need to make decisions about the next generation based on the skills they have and what the business needs in the future,” advises Bob Bailey, leader of the successful, family-operated Orchard View Farms. The succession plan is an open document, based on specific criteria for the transfer of power. The successor, hopefully, will drive
the business further than the founder, and his role will never be the same as a founder. The founder may have operated with singular authority. The successor will have different areas of expertise and likely will need to rely on non-family managers for success as they reinvent the firm. Clear strategies for succession can ensure support and respect from all family members for the new brand of leadership. NO IN-LAWS. This sounds harsh, and often it’s too late to impose this rule when I meet with a client. Yet I adhere to it because if the business fails, one breadwinner in the family can still be bringing in a paycheck. And if a marriage breaks up, the sad process of divorce can at least not contaminate the family business. All of this can be clearly decided, documented and communicated ahead of any schisms which may, unfortunately, occur. All in-laws are still included in the family council meetings. TELL FAMILY STORIES. Successful family businesses, large and small, are driven by profit and the continuity of core values. There is no better way than story-telling to keep those family values and traditions alive in the business. Look up Elizabeth Stone’s 1988 New York Times article 'Stories make family.' Along with leading-edge business practices, steps need to be in place to ensure that elements of the family culture are handed down to each generation. Whatever it takes – a formal oral history or an ethical will, this important function cannot be left to chance. SEARCH FOR RESOURCES. David Bork’s 2010 classic “The Little Red Book of Family Business” is a go-to for many family business leaders, and there are a number of other good books on the subject. Look for a family business council or association in your region. You’ll be able to share with and learn from other professionals like yourself. Experienced coaches and consultants with specialized expertise on family business dynamics can also offer objective guidance. Success in any business, and certainly the family-controlled ones, doesn’t just happen. If you recognize and prepare for the unique challenges, your family business can bestow many kinds of blessings on your loved ones – and your community at large. g J O G O R I S S E N is a certified transition coach and a former Milwaukee-area resident. A product of BizTimes Media
L to R first row: Michael,
Brandon and Brooke (Sam and Annie’s children). Second row:
Hometown pride is the heart of Endres Manufacturing
Diane, Ben, Sam, Annie, Dan Marquardt (Kate’s boyfriend), Ken and Kate.
BY LEAH CALL
am Ballweg, the fourth generation to lead his family business, knew he had big shoes to fill when he took the reins of Endres Manufacturing in 2013. Ballweg is now responsible for continuing a legacy of innovation, product excellence and commitment to employees and community. He believes that it’s these values that have enabled Endres to evolve over the last 90 years from a shop in a barn to a highlyrespected AISC-certified steel fabricator. As Waunakee’s oldest manufacturer, Endres is an integral part of the community – as both an employer and a landmark business. The unique, Bavarian-style architecture and well-groomed grounds, complete with a mini-park and live goats, draw the attention of passersby. Endres hosts annual community events like Wauktoberfest – the local version of Octoberfest – and welcomes com-
munity members to visit the facility and feed the goats. It also gives back to Waunakee and beyond through the EMC Foundation. “My grandfather was ver y much involved with the community and giving back,” Ballweg said.
FROM HUMBLE BEGINNINGS, A LOCAL INSTITUTION When Lawrence Endres, Sr. started Endres Manufacturing in 1926, the business centered around his own patented inventions and provided welding services to area farmers. After serving in World War II, Larry, Jr. returned to Endres to take it over. He was still a young man, but his father had been diagnosed with Parkinson’s disease. Over time, Larry, Jr. shaped the company into a respected structural steel business. Larry, Jr. married Lee Wallin in 1950, 2017 WISCONSIN FAMILYBIZ
ABOVE: Larry, Jr. brought his love of goats to Endres in the 1980s. Today, goats are closely associated with the Endres brand. RIGHT: Everyone in Waunakee is welcome to play with the Endres goats.
and both worked in the business alongside their two children, Diane and Ronald. In 1968, Endres moved to its current location in downtown Waunakee. The Endres building's unique exterior reflects the familyâ€™s German heritage and Larry, Jr.â€™s desire to be a visually appealing part of the community since the addition of resident goats to the property in 1980, the hoofed mascots have since become part of Endresâ€™ brand. In 1974, Diane Endres married Ken Ballweg, who took over as the third-generation leader in 1990. The couple had three children, Sam, Ben and Katie. Like prior generations, the Ballweg children spent the bulk of their childhood at work in the family businesses. As they grew, family discussions focused on identifying the fourthgeneration leader. It was Sam who desired to be that leader. Sam earned degrees in finance and theology at Boston College and worked in the Massachusetts state government for a year after college. He then took a job with a general contractor after moving to California with his wife, Annie. â€œI learned a lot about the construction industry, experiencing what their side of the business is like â€“ seeing what a business that purchases steel from a company like mine is looking for, what they need to know.â€? In 2003, he returned to Waunakee and worked at Endres for ten years before taking over as president. Endres Manufactur ing cur rent ly employs 60 people, including three family members. Sam's father, Ken, remains 28
WISCONSIN FAMILYBIZ 201 7
involved as CEO and Diane Endres-Ballweg heads the company's foundation. According to Ballweg, the familyâ€™s ongoing focus on the three Ps â€“ people, product and process â€“ has contributed greatly to its success.
Endres Manufacturing Company PRODUCT/SERVICE:
PEOPLE In southern Wisconsin, the Endres name is synonymous with quality craftsmanship, honesty and reliability. â€œYou donâ€™t stay in business for over 90 years by lying, cheating and stealing. We work hard to maintain our reputation of being the best at what we do,â€? said Ballweg, who noted that Endres has customers who ask them to do a project without asking the price. â€œBecause they know we are going to treat them well, because we plan on being around for another 90 years. Our integrity is paramount because it is not just the companyâ€™s name and reputation, but our familyâ€™s name and reputation.â€? Larry Endres, Jr. believed that employees were an extension of the family, and that belief remains. â€œWe cultivate that family culture still,â€? said Ballweg. â€œWe let them know they are part of the team, part of the family. Endres also has substantial profit-shar-
Structural steel, railings, stairs, piers HEADQUARTERS:
Waunakee YEAR FOUNDED:
1926 FOUNDING FAMILY:
Lawrence M. Endres, Sr. CURRENT COMPANY LEADER:
Ken Ballweg, CEO (3rd gen.), Sam Ballweg, President (4th gen.) WEBSITE:
endresmfg.com ing for its employees. â€œThey see if the company is succeeding, all the employees are coming out ahead, too,â€? said Ballweg. â€œThey understand that the work they do every day leads to their own success in the future.â€? Itâ€™s not surprising that some Endres A product of BizTimes Media
employees have been with the company for 40 years.
PRODUCT Endres Manufacturing’s steel is utilized in buildings throughout Dane County, including the Overture Center, downtown Madison Library, Dane County Airport and several buildings on the UWMadison campus. The Steel Plus Network, a national member association, has recognized Endres with multiple awards, including Project of the Year for its work on six structures on the Epic Systems campus in Verona, and again for its work on the TriNorth Corporate Headquarters in Fitchburg. It also named Endres Manufacturing the Fabricator of the Year in 1998 and awarded Ken Ballweg the Bob Coffey Award in 2003 for his contributions to the steel industry. In 2010, Ken Ballweg was named Waunakee Businessman of the Year.
PROCESS Endres has always been committed to improvement and growth. Sam Ballweg notes that the balance between a more
conservative older generation and a more aggressive, risk-taking younger generation has resulted in processes that positively move the company forward. “I think every generation of leadership has shown a push to take on additional risks,” said Ballweg. “My father, Ken, really pushed Grandpa Larry to take on bigger projects, and pushed the boundaries of what the company could handle on the capacity side. I think I have pushed to make strides on the technology front, to increase not only the software systems in the office, but the machinery on the shop floor to increase efficiency and throughput.”
PHILANTHROPY – THE FOURTH P Philanthropy perhaps plays the biggest role in shaping the legacy of Endres Manufacturing. Formed in 1996, the EMC Foundation gives approximately $150,000 annually to nonprofits, primarily in Waunakee and Dane County. “My parents always gave back to the community, and that was always a value in our family,” said Endres-Ballweg. The foundation enables her to “carry out that lifelong training I had about giving
back to the community.” The EMC Foundation takes grant requests twice a year. “We get about 30 to 40 requests every grant period,” said Endres-Ballweg. “We look at things in our local community first.” The EMC Foundation recently gave $75,000 to the Waunakee Neighborhood Connection to kick-start a campaign to build a community resource center. Last year, a $25,000 grant helped Waunakeebased Schumacher Farms launch its fundraising efforts to construct a visitor’s center. Whenever possible, Endres-Ballweg hand-delivers grant checks. “So we actually get to meet and see the people we are trying to impact,” she said. Looking back, Endres-Ballweg sometimes wishes she could have taken a larger management role in the business her grandfather started, but she attends board and management meetings and is happy to bring Endres into the community. “Family businesses, to be honest, always have struggles, but somehow you live through it,” she said. “Doing some of the PR work and handling the foundation became a way I could carry on that family legacy.” g
2017 WISCONSIN FAMILYBIZ
The American Legion Post 70 building, restored to its early grandeur. (Photo: Melody Wollangk).
GIVING BACK BY BILL WYMAN
iving back is a way of life. My family has been doing it for generations and I am lucky to be able to continue the legacy. My great-grandfather on my mother’s side, Charles Wickering, was a hardworking blue collar worker in Oshkosh. He became interested in city government and was elected mayor in the early 1900s. He was a man who thought about the future and gave his extra time to the community. My grandfather on my father’s side, Earl Wyman, was a man who is still remembered by many in Oshkosh today. After being a record-breaking athlete at Ripon College (he set the college football dropkick record), he fought in WWI and became a lieutenant. Upon his return Oshkosh, he wanted to help the city’s other returning veterans and was one of the founders of American Legion Post 70. He was selling insurance when his college friend, Sam Pickard, approached him about a business
WISCONSIN FAMILYBIZ 201 7
partnership. Together, they purchased and operated Oshkosh B’Gosh. Sam, being a banker in Neenah, was the finance partner, while Earl was the managing partner. Earl’s years at Oshkosh B’Gosh showed great growth. The company went from being a small regional men’s workwear manufacturer to a nationwide, prominent, high quality workwear manufacturer. With the company’s growth, Earl gave back. He strongly supported the charitable giving of the American Legion post; he helped individual workers at Oshkosh B’Gosh when they were in financial need; he was a strong supporter of his alma mater, Ripon College; and he supported children’s causes throughout the Oshkosh area. Even today, elderly ladies who once were young seamstress at the company tell me how nice Earl was. The Ripon College gym has Earl’s name on it and the Oshkosh Boy’s and Girl’s Club gym is named the Earl Wyman Gym. Earl was a great man to be A product of BizTimes Media
around, and was the beginning of our family’s legacy work. Earl’s two children, Joyce and Tom, are both still alive and still giving back. Joyce and her husband, the now-deceased Fritz Hyde, have always been very involved in the community as well. They were on many community boards and have been impactful givers to numerous nonprofit organizations. Joyce, at 92, is still giving me wonderful insight and advice on how to make Oshkosh better. Tom Wyman married Shirley Friedrich over 60 years ago, and they are still the best parents a person could have. Not only have they taught me the importance of giving back, they have been my mentors for ethics, integrity, honesty and trust. The family legacy that I hope I’m teaching my children was ingrained in me by the everyday life that my parents live and believe. I am very lucky to be born into such a great family. As a very young child, I was taught the importance of respect and manners. Sayings like, “Put yourself in their shoes,” “Help someone else before you help yourself” and “Do unto others as you would like them to do to you” (The Golden Rule) were not only preached in our home, they were practiced every day. That way of life and the mentality is the core of who I am. My wife, Beth, is also an important reason that our family is who we are. Beth’s mantra is excellence. Everything she does, she does with the desire to do it the best. She is involved in many community activities and always wants to help. She holds our whole family together with love and high expectations. Our children have become strong, independent, motivated people. Beth is my soulmate and the love of my life. After college, I started working for our family company, Oshkosh B’Gosh, as a salesman. The time was very exciting for the company. Our kid’s clothes were “hot.” The cute styles, along with the underlying quality and durability, made the demand much stronger than the supply, and manufacturing decisions needed to be made on how to handle the growth. Our family decided slow growth with emphasis on quality was the direction to take, which is similar to our family traits in life. This company decision showed me the true meaning of values, ethics and integrity. In 1988, I left the life of a road salesman wisconsinfamilybiz.com
in California and moved home to Oshkosh to work at corporate. My wife, Beth, left a great job, moved to Oshkosh and became pregnant with our first child all in one week. Change in our life had arrived. I soon became involved in the community with organizations like United Way, Junior Achievement, the Mercy Hospital Foundation, Progress Oshkosh and the Oshkosh Area Community Foundation. They all showed me the importance of giving back firsthand and the wonderful feeling you get when you see that you are making a difference. I was asked to get involved in the Oshkosh B’Gosh Foundation, and this was the start of what has become a passion for me. Each year, the corporation would give two to three percent of its profits to our corporate foundation. As time passed, our foundation became more well-known and we saw an increase in charities pursuing grants. This was very rewarding; it forced us to weigh the effects the grants would have on the charity, but the abundance of grants also forced us to focus our mission to specifically guide our grant-making. It was decided that we would direct our gifts to help children. In 2005, due to changes in both the supply side and the customer base, the corporation had two choices: buy other brands to become more influential or sell to keep the brand name relevant in the market. The second choice made the best sense for our family. Oshkosh B’Gosh was sold to Carter’s Children’s Wear. At the time of the sale, the Oshkosh B’Gosh Foundation also had two choices. It could be spent down to zero and sunset, or it could be transferred to another foundation so the money could be invested, grow and last for many years into the future. Moving the Oshkosh B’Gosh Foundation to the Oshkosh Area Community Foundation was the perfect solution to keep its mission alive. So I was “retired” at 47, but I wasn’t ready to quit working and for sure did not want to move to Florida or Arizona. In 2007, after years of soft negotiations, Beth and I bought the American Legion Post 70 building, which my grandfather was involved in, with the plan to restore it to its original grandeur. We wanted to give the community something after it had done so much for our business and our family.
The big white building at the foot of Washington Avenue was a dilapidated historic landmark on the city’s lakefront. It was built for the Oshkosh Yacht Club in 1903, at a time when Oshkosh was booming and filled with rich lumber barons looking to have their sailing hobby and fancy lifestyles compare to places like Chicago and New York. The building was extravagant, and for 20 or so years a highlight of the Midwest sailing crowd. When the Depression hit, the Oshkosh Yacht Club lost its luster. The club could no longer afford its home, and in 1937 the American Legion bought the building. Fastforward to the 1990s and again the costs of maintenance and the willingness of the aging WWII veterans to volunteer to keep things up brought hardship to the Oshkosh landmark. Restoring the building was thrilling. The daily excitement of taking a run-down, but historic, eyesore and turning it into the most elegant, upscale special events facility in the area was mind-blowing. The renovation of the physical building was not the only exciting part. Working with the Legion and the Yacht Club to make sure they had a home for the next 50 years was also very rewarding. Now, almost 10 years later, it is still gratifying to see the legionnaires holding meetings at their old headquarters, the Yacht Club having their home back – including an expanded, renovated harbor – and the community having a beautiful place to hold meetings and receptions. Since 2002, I have had been involved with the Oshkosh Area Community Foundation –first as a board member, then as board president – and in 2012 and 2013 as the interim president and CEO. One of the proudest moments in my life was being hired permanently into the role of president and CEO in 2016. The organization has been in existence for 87 years; it’s one of the oldest in the state. It has approximately $100 million in assets. The OACF mission statement, “Strengthen our community through stewardship, collaboration and leadership” fits perfectly with my family’s passion. Giving back is my legacy. g B I L L W YM A N is the president and chief executive officer of the Oshkosh Area Community Foundation. 2017 WISCONSIN FAMILYBIZ
Badger Mining Corpora-
LEADERSHIP AT ALL LEVELS
tion is jointly owned by the Hess and Chier families. There are 12 third-
Badger Mining’s “flat” organization empowers everyone
and fourth-generation family members currently working in the business, some of whom include
BY MARYBETH MATZEK
hether it’s the management structure, leadership programs or how family members learn about the company, Badger Mining Corporation doesn’t do things the usual way. For example, high school-aged members of the two families who own the provider of industrial raw and coated silica sand can spend some of their summer vacation learning more about Badger Mining and possible job opportunities. Mark Hess, a member of Badger Mining’s advisory team and a third-generation family member to work at the company, developed the idea while talking to younger members of the two families. “We expose them to the company and they learn about the different jobs we have here,” he said. “We hope it can help them choose a possible focus area for their career.” After gaining either education or experience in their area of interest, family members are welcome to apply for any
WISCONSIN FAMILYBIZ 201 7
(from left) Mark Hess, Lori Phillippi, Brandon Hess, Matt Hess, Crystal
job they’re qualified for. The family member goes through the same hiring process as other candidates for the position, and will only be offered the job if all things are equal with another non-family candidate. “We don’t create jobs here for family members,” said Lori Phillippi, another member of the advisory team and thirdgeneration family member. “(They) need to do the work necessary to earn their jobs.”
Abendroth, Preston Hess and Megan Hess.
NO CEOS ALLOWED Badger Mining’s hiring process is representative of the company’s philosophy of collective management. Unlike most businesses, it does not have a CEO or president, but rather is led by a four-member advisory team, which currently consists of two family members and two non-family members. Advisory team members hold power equally. “We have a unique management style. It’s a participatory, network structure,” Phillippi said. “We’re not a top-down company and we’ve taken away the silos
Russell Chier (above) and George Hess partnered to create the modern Badger Mining Corporation.
A product of BizTimes Media
Badger Mining Corporation PRODUCT/SERVICE:
Provider of premium northern-white industrial raw and coated silica sand HEADQUARTERS:
Berlin YEAR FOUNDED:
TOP: Badger Mining has offices in Berlin (pictured) and Taylor.
CENTER: Former Badger Mining
Clifford A. Chier
Corporation leaders George Hess and Tom Stark.
CURRENT FAMILY LEADERS:
BOTTOM: Clifford Chier founded what is
Lori Phillippi and Mark Hess, advisory team
now Badger Mining Corporation in 1949.
between the different departments. We donâ€™t have a rigid hierarchy at all.â€? Clifford A. Chier founded C.A. Chier Sand Company in 1949 with a single sand mining operation near Fairwater in Fond du Lac County. When Chier retired in 1979, his son, Russell Chier, and son-in-law, George Hess, formed a new partnership and incorporated the business as Badger Mining Corporation. The two families retain ownership of the company, which has about 360 employees. Currently, 12 family members work for Badger Mining. From that initial Fairweather operation, the company has grown to include offices in Berlin and Taylor, sand processing facilities in Fairweather, Taylor and Alma Center and three coating facilities in Taylor and Merrillan. The company also has 28 transload facilities across the United States and Canwisconsinfamilybiz.com
ada. In 2015, Atlas Resin Proppants merged with Badger Mining, bringing resin coated sand into the companyâ€™s product portfolio. Phillippi said the companyâ€™s leadership style harkens back to when her grandfather, Clifford Chier, ran the company. On Friday nights, employees would go out together for fish fry and talk about the past week and what was coming up the next. But in the early 1980s, Badger Mining experienced tremendous growth, and as outside business professionals came in, that connection deteriorated. â€œIt led to a hierarchical strategy, and silos started going up,â€? Phillippi said. â€œThat wasnâ€™t our culture or who we are.â€? In 1985, Badger Mining leaders changed course and adopted its network management style. The approach has worked well for them as the company continues to grow.
â€œWeâ€™re not your typical company. We even changed our bylaws so we canâ€™t have a CEO,â€? Phillippi said. â€œThatâ€™s something that rarely happens.â€? Badger Miningâ€™s coaching program is another unique part of its culture. Every employee is assigned a coach. This coach, who is similar to a manager in other businesses, is a go-to person workers can talk to when they have a problem or question. The coach also provides feedback on how the employee is doing. For example, Brandon Hess, a fourth-generation family member is a leader at Badgerâ€™s Fairwater Plant and coaches one of his cousins. Although they are family, Hess said that connection hasnâ€™t made a difference. â€œPeople here work really well together, .........BADGER CONTINUED ON PAGE 35 2017 WISCONSIN FAMILYBIZ
The Feast of St. Nicholas, by Richard Brakenburg, 1685, Dutch painting, oil on canvas. Interior in which a family with children celebrating Christmas. (Shutterstock)
DEFINING LEADERSHIP IN THE FAMILY BUSINESS BY SHERRY HERWIG
he success of a family-owned business lies in the hands of its leader, and it is widely quoted in family business research and literature that one must possess a certain skillset to be effective. But what are these skills? What does it take to successfully lead a family owned business? First of all, a family business leader must be self-aware. He must not only know his own strengths and weaknesses, but also know the strengths and weaknesses of his fellow family members and of his employees. He must know how to leverage the capabilities of these individuals to create high-functioning teams. A family business leader must have the ability to motivate others â€“ both family and non-family employees. The leader of the
WISCONSIN FAMILYBIZ 201 7
family business is not just a manager. She must have a vision for the direction of the organization and the family, and be able to inspire and get buy-in from key stakeholders. She requires solid decision-making skills, and not just in terms of business results and the bottom-line. She must also keep the goals of the family in mind, and be able to implement successful strategic and business planning to get there. Strong communication and conf lict resolution skills are absolutely crucial in a family business leader. Family dynamics, inter-employee tensions, and differences in personalities are all at play, and frequently need to be diffused. Family business leaders need a very high level of emotional and social intelligence, as well as the ability to manage relationships. The family business leader also needs to be A product of BizTimes Media
able to confidently and effectively communicate the vision and plan she has for the family and for the business. On top of all of this, a family business leader must also possess a robust set of business skills, including wealth management, tax planning, strategy development, financial understanding and estate planning. He needs to understand the rights and responsibilities that go along with family business ownership, his company’s products and markets, and be able to target key customers, competitors and suppliers. Developing these family business leadership skills takes time; it is a process, a journey. To better ensure a leader’s success, consider these practices: START EARLY. From a young age, get the next generation involved in the business through family meetings, business visits, etc. Consider forming a family education committee.
B A D G E R .. . . . . . . . . . . . .......... F R O M P A G E 3 3 whether you’re a family member or not,” he said. Phillippi said Badger Mining’s coach/ employee concept really appeals to Millennials. “They enjoy that kind of interaction, and it’s great for attracting and retaining employees,” she said. In addition to the coaches, there’s also a leadership team from different departments within the company made up of family and non-family members. Of the 16 people on the leadership council, only four are family members. “We work well together,” said Hess, who also serves on the leadership council. “The team gets together regularly to work on different projects. It helps break down those silos.” The company’s f lat organizational structure, along with a quality benefits package, has landed Badger Mining on multiple best places to work lists. It also received a Gold Level WELCOA Well Workplace Award in 2015.
THE NEXT GENERATION Family members are encouraged to work elsewhere before joining Badger Mining – Crystal Abendroth knows that firstwisconsinfamilybiz.com
SET CLEAR EXPECTATIONS FOR ENTRY INTO THE BUSINESS WELL IN ADVANCE.
What level and type of formal education is required? What kind of work experience needs to be gained? What types of soft skills are most important?
CREATE STRUCTURE AND POLICIES FOR SUPPORT AND TRANSPARENCY. Develop
an effective governance process, both between generations and for the company overall. This will also help level the day-to-day playing field for high-ranking employees who are not family members.
HIRE FAMILY MEMBERS INTO EXISTING JOBS WITH REAL RESPONSIBILITIES. Give
them a chance to make mistakes and practice decision-making skills before they become leaders of the business.
BE SURE THE SKILLS OF THE LEADERSHIP CANDIDATE ALIGN WITH THE NEEDS OF THE BUSINESS. Use formal training, educa-
tional resources to fill in the skills gaps.
hand. The daughter of Mark Hess, she worked at Badger Mining over the summer while in college. After graduation, she found a job at another company until a position opened up at Badger Mining in her area of interest. “I finally got in at Badger on a third shift position,” said Abendroth, who now works first shift in the information systems department. And if a family member wants to do something completely unrelated to Badger Mining, that’s okay, too, Phillippi said. “We want family members to pursue what their passions are,” she said. “If that’s not here, that’s fine.” To keep all Badger Mining shareholders informed about the business – even those who don’t work there – the company holds an annual meeting to share the past year’s performance and coming year’s goals and initiatives. Family members who work at Badger Mining attend quarterly meetings to stay connected throughout the year. While some family-owned businesses struggle to get family members interested in working at the company, that hasn’t been a problem for Badger Mining. The summer learning opportunities program for high school family members has helped. “We definitely want to stay family-
PLAN ONE GENERATION IN ADVANCE. The
current generation should initiate the preparation process. COMMUNICATE! Keep communication open early and throughout leadership development and succession.
Leadership development is vital to the success and continuity of the family business. It does require a unique set of skills to run a family business, and potential leaders must be given the time and support to develop these skills. The long-term benefits of leadership development are worth the investment of time and resources, and will prepare the family, the business and its leaders for future success. g S H E R RY H E RW I G is a professor at the University of Wisconsin-Oshkosh and director of the University of Wisconsin Family Business Center.
owned, so it’s vital to have family members involved,” Hess said. But while it is important to keep family involved at Badger Mining, Phillippi said there’s no real difference between an employee who’s a family member and one who’s not. “We consider our family to be our entire workforce,” she said. “We pay for education programs and have developed leadership programs that benefit everyone.” The Hess and Chier families aren’t the only employees with relatives working at Badger. Several local families have multiple members working at the company as well. “We post all jobs internally first, so if a worker knows someone qualified he’ll tell that person to apply,” Hess said. “We get a lot of referrals.” Phillippi said empowering employees is good for the company, which is committed to making Badger Mining a rewarding and fun place to work by focusing on teamwork, safety, health, wellness, integrity, personal growth and community involvement. “Through the support of our employees, Badger Mining has the best outcomes when it comes to quality, innovation and continual improvement,” she said. “All of that together allows us to provide superior value to our customers, shareholders and communities.” g 2017 WISCONSIN FAMILYBIZ
When Business Gets Personal
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Published on Feb 3, 2017