The Succession Process: Assimilating New and Old

entrepreneurs. Grant Hood is one of our members, and is a prosperous serial entrepreneur who, thanks to his varied experience, is able to provide advice on a wide range of issues. Roger Grochmal is the owner of AtlasCare, Toronto’s premier HVAC contractor for residential service and installation, and his industry experience is very valuable to the board. They keep us disciplined, attentive, and focused on the issues that affect the long-term health of Naylor and our affiliate and subsidiary companies.

The Succession Process: Assimilating New and Old

As Naylor’s sole shareholder, I moved my assets into a family trust in 2001 to prepare for the transfer of ownership. Lauren and Greg are the beneficiaries, meaning that when this move was completed, we had all committed to the business being passed on to them. The main advantage of the family trust is that when I die, the financial growth that Naylor and I personally have accumulated will not be subject to large estate taxation, since any additional gain in value was put into the trust, and not attributed to me. If Naylor were ever sold, then a large taxation would occur, but as long as our family and its beneficiaries continue to run the business, this will not happen. Many family businesses use this type of trust arrangement to pass companies from one generation to the next, because it allows assets to be passed along without taxation threatening the capital base of the company.

The succeeding generation of Hitchman owners is highly committed to this business; they want to see it grow to its full potential under their stewardship, and they wish great success to their management teams and fellow employees. It is my hope to remain involved with strategic planning, and eventually become the chief cultural officer, which would allow me to perform my favourite job function: being highly interactive with our customers and field forces. This was my initial role at Naylor almost 3 ..0 years ago, and I hope to resume this post, and continue my involvement with the company in this capacity for many years to come.

When I came on board with Naylor, we were a small company with fewer than 20 employees, and annual sales around the $2 million mark. Today we are no longer a small company. Our employee base is approaching 200 people, and our sales are close to $40 million. These are two very different businesses that require two very different business models and management styles. The people who were

with me from the start deserve the greatest commendation, because their own management skills and strategic thinking capabilities developed as company expansion necessitated, and they managed to adapt and evolve with the growing business. The company where it is today, demands a whole new skill set that only a newer, younger, and better educated group of leaders can provide.

We have a balanced combination of field people in management positions and university or college graduates in project management, system design, and sales. The executive management team has many experienced and long-serving employees, but excluding me, the average age of our senior management team is under 40 years of age. This means that our team is made up

Greg, Lauren and Tom Hitchman, 2013. of both the experience of age and the technological understanding of youth. I believe there is no better way to understand what motivates younger workers than to have one on your executive team providing input.

Naylor and its affiliate, Viridian Automation, are in good hands as we move forward. We have built a powerful management system backed by strong and skilled people that will have no trouble facing challenges in the years to come. Our employees are highly committed, they do what needs to be done, and they are capable of moving the business forward successfully. I cannot say what will happen in the next thirty or forty years, but I am confident that the company will flourish and be prosperous. Our current strategic plan would see this company double in size over the next seven years, so it is a very exciting time for Lauren and Greg, their management team, and for every Naylor employee. As for me, I may not be as involved as I once was, but I will always keep a watchful eye on the company, celebrate its every success, and cheer you all on at every opportunity.