By Kevin
Kipp
Nothing succeeds like succession.
How one generation takes the baton from another—if it takes
the baton at all—can determine why some heirs apparent end up
“S.O.L.”: shareholders-of-leisure or (put politely) sorry-outta-luck.
On the other hand, at Hager Hinge, Wehrenberg Inc., John Fabick
Tractor Company, and Rolwes Homes, owners have found ways to
keep the business all in the family.
One has planned it carefully during the last two centuries;
another made sure Junior shouldered responsibility willingly,
not by default; the third puts cousins through a years-not-weeks-long
corporate boot-camp so that they develop a CEO who will play
in Peoria; and with 15 kids (nine sons), one prolific dad surely
felt it was destiny (mom might have felt it was something else
entirely!) that the name would continue in his industry.
Hager Hinge
Fifth
generation Hagers who are
minding the store include:
(seated) Susie Wiegand, Arch Hager
(Standing) Rusty Hager, Charles Hager |
August
W. "Rusty" Hager, III, chairman of Hager Hinge, works with a
batch of other Hagers among his 100-strong St. Louis work force:
Charles is executive vice president and COO; Archer oversees
logistics and procurement; Ralph heads sales and marketing;
Warren is group vice president for architectural products; and
Susie (Hager) Wiegand handles accounts receivable and customer
relations.
"Everyone evolved into the area of the business he or she enjoys
and is best suited to serve," Rusty says jovially.
And it all happened without gnashing of teeth, right?
"Not exactly," he chuckles like a kid caught sampling the cookie
jar, "it isn't always Camelot around here, but at the end of
the day our 151-year tradition holds us together."
More specifically, peace in the family is maintained because,
as Hager says, "We leave our differences at the office; we don't
take them home with us. And the differences we do have we take
care of on a timely basis."
Hager adds that the Hagers lunch together everyday, providing
an opportunity both to vent and communicate.
Rusty, 52, is the fifth generation Hager at the helm, the great
great grandson of company founder Charles Hager. The door hardware
products company began in 1849. Rusty's chairman emeritus father
retired in 1985.
Hager Hinge has three manufacturing plants in the U.S. and a
joint venture in China. Its distribution centers are in Cincinnati,
Ohio, Montgomery, Ala., Kitchner, Canada, the United Arab Emirates,
and Hong Kong. With approximately $150 million in sales, Hager
Hinge has 900 workers in the U.S.
Hager says 98 percent of the company stock is retained by family
members. He says "business continuity planning has contributed
to keeping Hager in the family for five, probably six generations,
[even though] there's no sixth generation family member in the
company at this time."
He says that stock transfers were made from generation to generation
"that make sense for the business as well as the individual
family members."
Though no successor has been identified by a specific strategy
to make it so, the chairman is optimistic it will happen. "Every
[fifth generation] Hager in the company has a son who may end
up at Hager," he says. "We have a couple of family members who
could take the business over and run with it, and it's likely
that the succession would remain in the family."
Additionally, Hager says, "We have professional non-family managers
in high positions in the company who may not be ready to take
over right now, but the family would embrace them [as the executive
corps] if eventually that's what has to happen."
Wehrenberg Theatres Inc.
Running
the show are Wehrenberg
Theatre family members:
(left
to right) Ron Krueger Jr., Midge
Krueger, Ron Krueger Sr. |
Remember Ronnie's Drive-In?
Meet Ron Krueger, Sr., president of Wehrenberg Theatres. His
career was decided when he was eight: Paul Krueger, his dad,
and Fred Wehrenberg, his granddad, built the drive-in in 1948.
It was Wehrenberg's third venue.
"I grew up in the business," Ron Krueger says, "starting at
9-years-old, working at the drive-in running the miniature train,
and feeding the bear."
Nice work if you can get it, but Krueger did his share of grunt
work, too, "picking up theaters, playing janitor, working all
the different jobs from usher to concession." He ran a Wehrenberg
theatre one summer in college.
Succession consultants might find the curriculum haphazard,
and Krueger's arrival in the corner office serendipitous. But
it worked.
Wehrenberg died in 1949. Paul Krueger, Ron's father, took the
budding chain's reins until his death in 1963. Ron was 23. And
in charge. Never had much time to think about what he wanted
to do. Just did it.
"I was fortunate to be able to surround myself with good people,"
Krueger reminisced of the bygone days of 23.
He remembers one man in particular, Les Kropp. "He worked with
my grandfather and father and then me. He started as an usher,
then ran the Melvin, and then came in the office as a film buyer.
He was my dad's right-hand man here at the company. Then he
mentored me for about a year."
Kropp stayed with the company for 10 years after Krueger stepped
in for his father, helping the company to begin its expansion
that eventually brought Wehrenberg screens to markets as far
away as Arizona.
Another old hand lending a hand to Krueger was Ray Parker. "He
had operated several drive-ins, and became my general manager
in the late Ő60s. He had children my age."
Krueger's likely successor grew up in the business, too, starting
as a projectionist and assistant managing a venue. Now 35, Ron
Krueger, II, comes to the company a bit more seasoned than his
father had.
And more freely.
"He went to work for Ralston after graduating from Indiana University,"
Krueger, Sr., says. "And he earned his MBA from Washington University.
"I wanted him to get some outside experience," Krueger continues.
"I was expected to come into the family business. When Dad died,
I didn't have much choice. We might have had an unwilling heir.
It wasn't a problem for me, but let's face it, very few companies
get into the fourth generation.
The son returned about five years ago, "coming in as an IS [information
systems] person," Krueger, Sr. says. "We had been making signs
to one another. I wanted him to work with us, and he was willing
to come back into the family business.
"We promoted him to GM after two years. This year he became
president of the operating company."
John Fabick Tractor Company
Left:
Harry Fabick
Right: Douglas Fabick |
Like Hager Hinge, Fabick Tractor has overseas (in Turkey
and Peru) joint ventures.
Fabick sells construction and mining supplies and equipment
for more than 100 manufacturers. They sell in the markets in
and around St. Louis. Fabick also sells to companies in the
pipeline, oil and gas industries internationally.
Fabick employs 500-250 of whom are service people to maintain
the equipment they sell. Caterpillar Inc. is their largest supplier.
Harry Fabick, a member of the third generation of the family
(son of John, grandson of John the founder) and company chairman
and president, says customers include Missouri's Department
of Transportation, Fred Weber, Alberici, McCarthy, Budrovich,
Dave Kolb, Doe Run, JH Berra, Luhr Brothers (they do huge amounts
of work for the Corps of Engineers in dam construction), and
Spiritas.
"We sold some equipment to Iran back when there was a Shah,
and to Iraq before Desert Storm," he says.
Fabick can recount a half-dozen ways in which his family business
is unusual, besides selling to the Middle East.
"We're a franchise dealership," Fabick begins, "so approval
of a successor is not only at the family and board of directors
level, it also has to be at the Caterpillar level."
He mentions that other suppliers also may have input, but it's
clear that Caterpillar calls the tune among these voices, and
their franchisee requirements make it a bumpy road for Fabick
family members.
"Whoever's coming up is put through a program in all departments
of the company," Fabick says. "First out in the field, as a
parts and service salesman, then as a machine salesman. Then
they're put in charge of management of a division or operation.
Also, any special programs from Caterpillar or other manufacturers,
or our association of equipment distributors-any program that
fits our younger generation's needs, we send them all to it."
Here's a kick in the head for young Fabicks working their way
up: "Whoever your supervisor is can fire you."
That's happened five times.
Here's a kick in the pants for older Fabicks: "At our company,"
Fabick says, "once you pass the baton, you no longer work on
a day-to-day basis. That's in order that people know the guy
in the corner office is in charge, not some previous CEO hanging
around."
That's happened once-never mind the title-to Harry Fabick, last
year.
"We pulled the [fourth generation] together to vote among themselves
to let us know, number one, if they wanted to continue [as a
family enterprise]," Fabick says, "and number two, who among
them did they want to lead."
"It was a group of six, and before they voted we said, 'any
one of you can lead the company, but five, 10 years down the
road the company would look different depending on who you choose.'"
The decision took on even greater significance because Caterpillar
requires that they do business with only one executive who holds
at least 51 percent of the corporate voting power of a dealership.
The Fabick clan, Harry says, takes it one step further: Whoever
is selected to lead holds 100 percent of the stock's voting
power.
Thus, he points out, it was extraordinarily important for them
to choose the person who would take the best care of the rest
of the family ownership group-that's 40 people among three nuclear
families.
In their all- or nothing-at-all voting, the fourth generation
chose Doug Fabick, 32. He's executive vice president, and he
doesn't see his age as a challenge.
But he has concerns: "The cohesiveness of the family unit working
together as a business and as a family means you have to have
flexibility and understanding. Sometimes you're boss. Sometimes
you're a co-owner. Sometimes you're a brother or a cousin.
"As cousins it's a friendship and family basis, where everyone
is exactly equal. When I'm the boss, then sometimes I have to
suggest things-being the boss is a whole different ballgame.
Rolwes Homes, Inc.
Setting
aside sibiling rivalry are brothers
(left to right) Larry, Jim and Phil Rolwes |
In the
Rolwes family, succession was secession-friendly secession.
Larry Rolwes, now president of Rolwes Homes Inc., started off
as vice president of marketing for his dad Ed Rolwes at the
Rolwes Company. Besides serving as a prime mover at Gateway
Academy in West St. Louis County, Ed Rolwes built hundreds of
North County domiciles.
"The age difference in the kids presented succession difficulties,"
says Larry Rolwes, one of nine boys, and the eldest of 15 siblings.
"We never assumed we'd take over. Actually it evolved that three
of us who had worked for Dad in various degrees started our
own company. We started buying [home] lots from him. He developed
them, and we put houses on them."
Voila. Rolwes Homes Inc., progeny-owned and progeny-operated
corporate scion, now concentrating much of its activity in St.
Charles County.
According to president Larry, he's in charge of acquiring developed
land, managing sales staff, and with architects and designers,
developing plans for houses.
Brother Phillip Rolwes is vice president-construction, making
sure that erected reality matches theoretical specifications.
Brother Jim Rolwes is vice president-production, overseeing
purchasing, monitoring subcontractors, and managing bid processes.
"As Dad wound down his business," Rolwes says, "we picked up
some of his employees, but not necessarily all the activities.
For instance, we haven't developed lots since 1995."
Who knows, maybe one of Ed's 96 grand kids (he's expecting more
than 100) will pick up on that in the next two decades.
Meanwhile, younger brother John Rolwes is a custom homebuilder
of upscale dwellings, mostly in West St. Louis County.
Still younger brother Greg Rolwes, having returned in the last
couple of years from a seven-year stint at Ryan Homes in Virginia,
heads up a brand new Rolwes Company. It builds more modestly
priced homes than Larry's company, and operates in a different
geographic market.
That provides a basis to cooperate rather than compete. "Greg
used some of the plans of one of the O'Fallon subdivisions we
built, only he's using them in Florissant," Larry Rolwes says.
And the youngest Rolwes of all Matt, 27, works for Whittaker
Homes Inc. For now.
