Monday, May 3, 2004
Succession plans an unhappy reality
By JIM HAUG
NEWS-JOURNAL BUSINESS WRITER
DAYTONA BEACH — Philosophers and poets may expound on mortality, but many no-nonsense businessmen are afraid to even broach the subject.
Greg McCann, the director of the family business center and associate of business law and ethics, talks about the relationship between family, business and ownership Tuesday, November 25, 2003, in the Lynn Business Center at Stetson University in DeLand. (Photo: News-Journal/Chad Pilster)
Unlike McDonalds, which quickly replaced a chief executive officer who died of an apparent heart attack, experts say many businesses dont plan for succession.
Students studying to take over family businesses especially dont like to talk about it, said Greg McMann, the director of the Family Business Center at Stetson University. His students “dont like to bring (succession) up because they dont want to talk about their parents dying.”
Small business owners also tend to be hard-working, shoot-from-the-hip types who dont always take the time to lay out their visions for the future.
As a reminder to be more forthcoming, McMann said he advises entrepreneurs that if “their plan is in their head, no one can see it.”
It is no surprise about 70 percent of family-owned businesses do not succeed in the second generation of family ownership, he said.
Businesses may do well to follow the example of S.R. Perrott, the Miller beer distributor in Ormond Beach. The president, Michele Connors, succeeded her father, the company namesake, when he passed away in 1994.
“She was groomed to take over from the beginning,” said Shea Davis, a publicist for Michele Connors.
J. Hyatt Brown, chairman and chief executive officer of Brown & Brown, has made plans for an eventual succession and a contingency plan in case of an emergency.
“If I got hit by a Mack truck tomorrow, Jim Henderson would become chairman,” Brown says.
The companys board already has agreed to elevate Henderson if Brown should die suddenly.
Henderson, 57, is president and chief operating officer of Brown & Brown, which now has 3,500 workers in 29 states. He has been Browns No. 2 person for about 10 years.
Brown, 66, says he intends to retire when he is 72. At that time, the next chairman probably will be selected from one of seven current regional vice presidents. They range in age from 36 (J. Powell Brown, Browns son) to 54, (C. Roy Bridges in Tampa.)
Brown says the succession plan is updated every six months. The vice presidents periodically deliver presentations to the board of directors, which helps the board identify their strengths and weaknesses.
Brown describes his company as an “American meritocracy.”
“Everyone rises or falls on their own merits,” he said. “It doesnt matter what your name is, or what your race or religion is.”
His son, Powell Brown, supervises offices in the Orlando area. Another son, J. Barrett Brown, works for Brown & Brown in Southern California.
Carl Morrow, the owner of Carls Speed Shop, 390 N. Beach St., doesnt worry too much about the future.
His wife, Diane Morrow, and son, Doug Morrow, are all key players in the business.
The shop, which makes carburetors for motorcycles, is in good financial shape, he said. His survivors could sell it and retire.
Still, planning for succession is awkward, Morrow acknowledged. “We think about it, but we dont look forward to it.”
Staff writer Thomas S. Brown contributed to this story.