Increase their workload and structure their jobs so they have a direct impact on the company profits or losses. Once you’re prepared to make the actual transition, it’s often wise to get legal advice as stocks and voting rights are often also being deferred to the successor.
But even meticulous planning doesn’t guarantee success, as the best-laid strategies can change–or fail. Look at the investment company of Daniels & Bell, the first black-owned New York Stock Exchange member firm. Founder Travers J. Bell Jr. failed to cultivate a successor, and after his death, his 24-year-old son Darryl Bell (of Homeboys In Outer Space notoriety) inherited the company. In a very short period of time, freewheeling spending of the company’s assets led to the company’s insolvency.
Baltimore-based Parks Sausage Co. (No. 93 on the 1996 BE INDUSTRIAL/SERVICE 100 list, with $20.8 million in gross revenues) has changed hands more than three times over its 47 years. Septuagenarian entrepreneur Raymond V. Haysbert was forced to sell the company to Pittsburgh-based Super Bakery Inc., owned by former gridiron stars Franco Harris and Lydell Mitchell, because of a nearly $9 million operating deficit. Haysbert and his namesake son, who was in line to take over the institution, now provide consulting services to Super Bakery on the Parks acquisition.
Often the original heir-apparent has to be replaced, making it critical that more than one child has intimate knowledge about what it takes to run the family business. Take 32-year-old Soft Sheen Products, the $91.4 million Chicago-based hair care products monolith (No. 15 on the 1996 BE INDUSTRIAL/SERVICE 100 list). In 1985, Gary Gardner assumed the helm
of the company, pushing the enterprise into international markets and product line extensions. But after Gardner resigned last year, the company was left in a quandary. It considered buyout offers until Gardner’s sister Terri Gardner stepped in as president and CEO. A marketer by training, the new CEO, the only daughter of founders Edward and Bettiann Gardner, had spent much of her career with the family business. Most recently she was president of Brainstorm Communications, Soft Sheen’s advertising agency. But perched in the CEO’s seat, Gardner has wasted little time seeking to increase the firm’s sales and profitability by restructuring operations and financial procedures. Like her brothers, she started in the business at an early age: As an eight- year-old, she filled shampoo bottles in the basement of the Gardner home.
THE TIME IS NOW
In some cases, the next generation is poised to take over. For example, last November, Herman J. Russell, 66, turned the daily control of his 37- year-old construction company over to R.K. Seghal, but with an eye to continuing the company as a family tradition. Seghal, an Atlanta businessman and trusted friend of Russell, was appointed chairman and CEO. (Seghal will buy an undisclosed stake in the company but the Russell family will retain majority control.) The move positions H.J. Russell (No. 4 on the BE INDUSTRIAL/SERVICE 100 list, with $172.8 million in gross sales) to aggressively move into