Succession plans critical for survival of family-owned businesses

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While family-owned businesses are commonplace in the United States, those that are multigenerational remain rare gems.

According to Cornell University’s SC Johnson College of Business, there are over 5.5 million family businesses in the United States, with the average lifespan of a family-owned business at 24 years. Just 40% of family-owned businesses are handed down to a second generation, 13% pass the baton to a third generation and only 3% survive a fourth or beyond.

The key to the survival of family-owned businesses is a succession plan — a focused process (ideally in writing) that looks at all aspects of the organization to ensure a seamless transition between the generations.

Strong succession planning has been instrumental in keeping Rochester’s family-owned businesses now in the fourth generation or beyond of family leadership viable and vibrant. We talked to the newest leaders of four of these businesses to learn their succession planning tips.

Conway Beam Truck Group — four generations strong

Chelsea Conway, 32, assumed the CEO role of her family’s commercial truck dealership in 2015, at which point her father Tom was named chairman of the board. Headquartered in Rochester, Conway Beam has five locations throughout the state: Rochester, Buffalo, Syracuse, Watertown and Elmira.

A fourth-generation leader of the family business that officially opened for business in 1951, she began working at Conway Beam during summers in high school. After graduating with her MBA from the University of Denver in 2014 Conway joined the family business full-time — at which point succession planning began.

“You don’t just snap your fingers and succession happens, it’s a multiyear transition and a lot goes into it. To rush in any capacity is not advised,” Conway said. “The beautiful part is that you always have family resources available to help you. My dad is the best mentor I could have.”

Among Conway’s other tips to family businesses beginning to formulate a succession plan are to respect the past values and traditions of the company, while also blending the goals and strengths of the new leadership team. She also recommends listening and learning from everyone at the company.

“Be involved in every aspect of the business and don’t be afraid to ask questions,” Conway said. “You don’t learn the business by looking at a financial statement, you learn the business by getting involved and asking questions.

“Throw away the fear and dive in.”

Doyle Security Systems Inc. — five generations strong

Founded in 1919 by John A. Doyle, Rochester-based Doyle Security Systems Inc. is the largest security system provider in New York. Fourth-generation leader John G. Doyle is the current president and CEO, and succession planning with the fifth generation is currently underway.

This newest generation of leadership includes Jack Doyle, 38, president of Doyle’s integrated systems and support services, and three of his siblings. Doyle began working at the family business in high school and held several positions as a teenager and college student at St. Bonaventure University, such as service technician and alarm operator.

Then, he left — by design.

“We have a rule in our family business that if you want to work here you have to work outside the family business for some time,” said Doyle, explaining this tenet helps family members decide if they indeed want to be part of it.

When he returned to the company after nine years in Washington, D.C. he knew for sure it was where he wanted to be, citing the longtime pride he’s had in the business, its legacy and its leadership, including his father.

As the family goes through their current succession plan, Doyle’s biggest tip is to maintain constant communication, not only with family members and shareholders in the business but the entire family.

“In order to run a family business successfully you need to maintain family harmony,” said Doyle, who notes his family takes a retreat each year where all members share, among other things, their career aspirations with the business.

To this end, he also recommends that, if financially feasible, businesses hire a third-party consultant to coach the family through the succession process, which can help with some of the more interpersonal family dynamics that can arise.

Finally, he recommends taking your time and being deliberate and patient with the succession plan, taking care to map out all aspects from the current state of the company to the future.

Seabreeze Amusement Park — six generations strong

Genevieve Norris-Brown, 35, assumed the duties of general manager of Seabreeze Amusement Park in Irondequoit earlier this year. Norris-Brown is the sixth generation of leadership in her family, which founded the historic amusement park in 1879.

Her father, Rob Norris, continues as president, and she has two cousins who are also sixth-generation employees of the park. Seabreeze is the oldest family-owned amusement park in the nation and among the oldest in the world.

“We consider ourselves to be caretakers of this gem of Rochester,” said Norris-Brown, who notes she’s proud to continue the many offerings Seabreeze has long provided to the community, like fun and memories for families and employment opportunities — especially for hundreds of youth in the summer.

She started working at the park as a teenager herself and joined the business full-time in 2008 after graduating from St. John Fisher College, where she studied business.

“Don’t drag your feet when you graduate,” said Norris-Brown, sharing a succession tip. “The quicker you can get into your family business the better. Roll your sleeves up and work your way up.”

She also advises the emerging generation of leaders to be patient, to appreciate and learn from the older generation, to immerse themselves in all aspects of business operations and not to rush succession.

Sage Rutty & Co. — four generations strong

Last week, Sage Rutty & Co. — Rochester’s oldest financial services company — completed its most recent succession plan when Trevor Holly, 38, was named president of the firm founded in 1915. Holly succeeded his father, Wayne F. Holly (who is now executive chairman) to become the fourth generation of his family to lead the company.

“There were many years behind this transition,” said Holly, who noted the conversation about succession started in 2016 and the planning began in earnest in 2017. “The change in leadership affects us internally as well as our clients externally, so we needed to ensure it was done right.”

Holly, a University of Buffalo graduate, previously held the title of corporate vice president for Sage Rutty and managed marketing and education efforts. His brother, Connor Holly, also works for the firm as a financial advisor.

When it comes to succession tips, Holly espouses adhering to a gradual changing of the guard, so when succession does happen it’s more of a time of celebration and recognition of the outgoing leadership rather than a sudden event.

He also recommends staying committed to the timeline, having all aspects of the succession plan in writing and sharing it with stakeholders at appropriate times.

Networking with peers who have successfully navigated family succession or are going through it is also something Holly highly recommends. He, Norris-Brown, Doyle and Conway belong to a local group of next-generation family business leaders called the Family Business Alliance.

The group started informally in 2018 but has grown to an organized, close-knit alliance that meets regularly to provide support on issues like navigating the complexity of family dynamics during succession.

“I can’t overstate how helpful this group has been,” Holly said. “We come from different industries and our businesses are of different sizes, but it doesn’t matter because our challenges are all pretty similar.”

Caurie Putnam is a Rochester-area freelance writer.