Stewards of family business: Non-relatives leading Maine family firms reflect on unique challenges

Photo / Tim Greenway Jo-an Lantz, president and CEO of Lewiston-based promotional products company Geiger, works closely with her predecessor, board Chairman Gene Geiger, center, and his brother, Peter Geiger, the board’s vice chair.

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By Renee Cordes

Geiger President and CEO Jo-an Lantz has been with the company so long, at times she’s mistaken as a member of the family that owns it.

“People assume that I’m a Geiger, but I’m not,” she says. “Sometimes it allows me the opportunity to be outspoken, and other times like anyone else I have to allow family dynamics to work itself out,” she says two years after succeeding Gene Geiger at the helm.

As the first non-relative in four generations to lead the Lewiston-based promotional products company, Lantz is one of several Maine business leaders entrusted by family business owners to run their firm. That often means piloting the enterprise until the next generation is ready to step up.

Lantz, who worked her way up from an entry-level bookkeeping job after college to her current role, became president in June 2018 and CEO in early 2019. Today she leads a company with 375 employees, including 75 in the United Kingdom, and works closely with her predecessor, who chairs Geiger’s board.

“Our management styles are certainly complementary, and we continue to be a collaborative team,” she says. That extends to Gene’s younger brother, Peter, board vice chair and editor of the Farmer’s Almanac, and Gene’s son, David, who serves as general counsel.

In Maine, where family-owned firms make up 80% of all businesses, Lantz’s management philosophy reflects the unique role and vantage point of non-relatives in the C-suite. Leading firms in a variety of sectors, they navigate many of the same challenges unique to family-owned enterprises.

Other large firms led by outsiders include L.L.Bean Inc., on its second non-family CEO since 2016 in Stephen Smith, whom Lantz considers a mentor; Hancock Lumber, a sixth-generation firm, led by Chairman and CEO Kevin Hancock, that hired Paul Wainman as CFO in 2016 and promoted him to president last year; and North Berwick-based Hussey Seating Co., led by President and CEO Gary Merrill, the first non-family member in that role.

Why so many examples in Maine? Catherine Wygant Fossett, executive director of the Portland-based Institute for Family-Owned Business, points to practical reasons.

“I have often heard that ‘you don’t want to be the one to end the family business,’” she says, “so in keeping with current business practices, family businesses are more open to coaching, having an advisory board and bringing in outside talent to keep the stewardship alive and the company strong for generations to come.”

Generation gap

Family-owned firms are an economic force to be reckoned with worldwide, generating an estimated 70% to 90% of global GDP, according to the Institute for Family-Owned Business. They have also been shown to have a 6.55% higher return on assets than other firms.

Despite a strong financial incentive to remain family-owned, that gets harder with each generation, with 30% of firms making the transition from the first to second generations, 12% from second to third and only 3% from third to fourth, according to data cited by IFOB.

Other research, by the Conway Center for Family Business in Columbus, Ohio, shows an ownership transfer between the first and second generations of only 19%. The center says that may be due in part to Millennials cashing out of traditional family businesses to start other ventures that are still family-controlled.

Among younger generations that stay in the family business, fifth-generation owners have much lower stakes and less involvement in management than previous generations, according to the 2021 annual report by Family Enterprise USA, a Washington, D.C.-based research and advocacy group.

In Maine, IFOB’s Wygant Fossett observes many younger generations involved in active management but not as many with full ownership. She also notes that it’s sometimes hard for the older generation to pass the baton to those next in line. Even after ceding ownership, “they may not be able to completely walk away,” she says.

That said, every family — and every business — is different, as Colleen McCracken knows after running two family-owned firms: Auburn-based furniture maker Thos. Moser and the Westbrook-based dog-products company formerly known as Planet Dog, in which she also had an ownership stake before it was sold in 2018.

McCracken, now a self-employed strategic business advisor, recalls that the founder of Thos. Moser was still active in the business at that time even with the second generation on board, while at Planet Dog only the founder was involved though active in product design and development.

“The ability of the CEO to adapt to the situation is really key,” McCracken says. “I used to say to people ‘I really don’t have an ego,’ which allowed me to play that role pretty well … The way I saw success was the ability to bring everyone together to meet the common goals of the business.”

She also says that for any outside CEO, it’s important to earn the family’s trust from the start because there will always be conflicts.

“It’s not easy at all,” she admits. “You’re always aligning these different people with different personalities as well as different goals and objectives. That’s really difficult in a family business.”

Leading with humility

In 2017 when Tony Shurman took the reins at Milbridge-based Jasper Wyman & Son, he wasn’t the first non-family member to lead the frozen-fruit supplier, one of the world’s leading growers, processors and marketers of wild blueberries.

The company, still owned by the descendants of its namesake founder who started out in 1874 canning sardines, has been run by a non-family member for close to three decades, starting with Ed Flanagan in early 1993 whom Shurman succeeded as president and CEO.

Shurman was headhunted via executive recruitment agency Korn Ferry after he had left breakfast-cereal maker Post Foods, where he worked in marketing and then as general manager in Parsippany, N.J. While on a short sabbatical to contemplate his next move, Shurman heard unexpectedly from the recruiter.

“I remember getting the call and thinking, ‘This is a really interesting opportunity,” he says. “It also happened to be in a location I was excited about moving to.”

Though unfamiliar with Wyman’s at the time, he was attracted by its profile as a regional family-owned brand with a small market share and huge global potential.

“I thought, ‘my goodness, what an incredible opportunity to tell that story,’” he says. “That’s exactly what we’ve done.” One achievement he’s particularly proud of: Surpassing Dole last August as the top U.S. frozen-fruit brand in sales.

Based on his management experience at different firms, Shurman says that one plus of family-owned enterprises is the freedom to take a longer view on decision-making, saying, “You’re not managing for quarterly earnings, so it allows you in my view to make better decisions and longer-term ones.” But he also made sure that when he started, the family was clear on what his role would be with guidelines and parameters on paper.

“I frankly wasn’t looking to work side by side with the family,” he says. “I was looking to run the business and wanted to make sure there was clarity on who owned what decisions on issues of scale and scope.” He says they also put a clear communication system in place including monthly updates to two designated board members “so I’m not getting peppered with questions from everyone.”

More than four years into the job, Shurman has this advice for new family-business leaders: Lay down roles and responsibilities from the outset, and come in wanting to learn from those who have been in the business for a long time and know it well.

“Those early days in particular are all about balancing humility and having conviction,” he says. “Don’t come in and say you have all the answers.”

Similarly, Hussey Seating’s Merrill says he considers it an honor to run that 186-year-old business with one of the industry’s strongest brands, saying: “The opportunity to work with an ownership team who has a long-term outlook and the willingness to invest in the future makes it rewarding.”

Team Chalmers ‘in lock step’

In Bridgton at Chalmers Insurance Group, President Steve Cote says he “flew by the seat of his pants” in his first few months in that role.

Cote, who joined the family-owned company as an account manager in 2000, held various leadership positions before his promotion to president in 2014, succeeding Bruce Chalmers.

In part he was chosen for the job because Bruce’s daughter, Dottie Chalmers Cutter, and nephew, Jim Chalmers, were not yet ready to lead the company, whose roots go back to 1857.

The cousins — who graduated a year apart from Bowdoin College — have worked closely with Cote ever since, with Cutter leading operations and Chalmers overseeing sales. Both appreciate what Cote brings to the team.

“There are times when we need an outside perspective from someone who looks at things a little differently,” Cutter says. “Steve provides that kind of objectivity and sound counsel.”

Photo / Tim Greenway

Steve Cote, center, president of Chalmers Insurance Group, is flanked by Jim Chalmers, vice president of sales, and Dottie Chalmers Cutter, vice president of operations, in the Bridgton office.

Similarly, Cote says, “We all focus on different aspects of the business, but on the core values and the core strategies we are in lock step,” even at the end of a heated discussion about strategy or timing. “When we push away from the desk or sign off from a virtual meeting, we’re very committed to the decision that we make.”

Cote describes his leadership role at Chalmers as a privilege, as some young family members — including Cutter’s 10-year-old daughter — already imagine their future roles at the company.

“It used to be that if you asked my daughter what she wants to be when she grows up, she’d say she wants to be an insurance agent just like her mom at Chalmers Insurance,” Cutter says. “Now she says, ‘I want to be the boss, Mom.’”

Tips on landing the right leader for your family business

For owners seeking a non-relative to lead their family business, here are some practical tips from experts contacted by Mainebiz.

“Be patient — change does not happen overnight. It has taken your family generations to get the company to be where it is today … A new CEO or CFO can’t expect to come into the business and make sweeping changes.”

— Joan Smith, tax principal, Baker Newman Noyes

“Cultural fit is the most important consideration in choosing a non-family member CEO. They must be able to set aside their own ego to work with the family.”

— Colleen McCracken, strategic business advisor, CLMC LLC

“The family and CEO’s visions for the future of the company need to be in alignment. Once there is agreement, then it’s up to the CEO to execute.”

— Steve Tenney, founder and CEO, Great Diamond Partners

“Just like with any other business, the management team must know its obligations and agree with the overall business plan to meet the expectations of its owners.”

— Jacques Santucci, president and founder, Opus Consulting