Managing change a challenge for next-generation leaders

A FINE JOB: Blount Fine Foods President and CEO Todd Blount has helped transform his family's company by supporting the development of employees such as Gee Nogueras, packing-line lead in the company's Fall River production facility. / PBN FILE PHOTO/RUPERT WHITELEY
A FINE JOB: Blount Fine Foods President and CEO Todd Blount has helped transform his family's company by supporting the development of employees such as Gee Nogueras, packing-line lead in the company's Fall River production facility. / PBN FILE PHOTO/RUPERT WHITELEY

Vincent J. Confreda, the third of four generations of his family to manage the family’s 93-year-old Cranston farm, makes the hand-off of the business from one generation to the next sound almost simple.

“I stepped in as my father started to slow down,” said Confreda, 57, who gives his title at Confreda Greenhouses & Farms as “top dog.” “I worked into it as he backed off.”

It wasn’t that simple. It took a lifetime of working side by side with his dad, Vincent P., who is 86 and still works on the farm every day. It took decades of training and teaching his own three sons, assuring them from boyhood that whatever they wanted they would have to work for.

It takes constant guidance and communication. “Everyone has to work together,” Confreda said. “Yeah, we would have arguments, fight, knock baskets around the field, go to bed, wake up, and it’s a new day. We always look forward, never look backward.”

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Only one-third of family-owned businesses survive into a second generation, and only 10 percent of those see a third generation of family operations, said David Karofsky, president of the Transition Consulting Group of Framingham, Mass.

“Getting family members to continue a [business] legacy today is more difficult than ever,” Karofsky said, partly because feelings of obligation to the family are weaker and because the range of alternatives for a young person’s life work is larger.

Family-owned businesses have a tougher task than other businesses when it’s time to plan and execute major changes in a business, Confreda says. Each of the three generations now working on the family farm sees a different history and future for the business, and different methods to move forward.

The only solution, he said, is making a convincing case for a change, in places as intimate as the family dinner table. “It’s almost like convincing a customer, except it is harder to make the sale to a family member because a customer doesn’t know the background of the business.

“I have had to sell [changes to] my father, and now my sons have to sell their ideas to me,” he said.

Confreda said his father stepped back a bit from the management role as technology got more complex (in fact, the older Confreda needed to be bullied a bit to get off of his 1941 tractor when his son bought him a new one in the mid-1980s). And farm technology is getting more advanced in many ways.

“You can take your iPad and walk through the fields and identify problems,” Confreda said.

The business, founded in 1922 by the grandfather of the current “top dog,” farms 400 acres over 15 parcels in Rhode Island, and a move is being planned into Massachusetts, to create more acreage for the next generation of three brothers – now in their 20s and each specializing in a particular aspect of the business.

“The mold I tried to build and use is coming into play,” said their father.

Whether successful family succession strategies are hammered out in boardrooms or at the supper table, as with the Confreda family, four elements seem to be essential, according to successful multigenerational family business owners. They are communication, confidence, consistency and adherence to core values.

John Hazen White Jr. is CEO of Taco Inc., a Cranston-based manufacturer of water circulation pumps for heating systems. Like Vincent J. Confreda, he is the third generation of his family to run the business, and he has two sons in their 20s who are working in the operation.

First, “you have to have a really strong degree of confidence that the next generation really wants to do this,” said White, who is 56.

During his accession to the family business, White went through some of the classic steps noted by professional advisers such as the Transition Consulting Group. He worked in the Taco factory in Cranston during high school and college, but then he left Rhode Island and worked at jobs in California, North Carolina and South Carolina for a few years before returning to Taco.

As a child of the owner, “you are always viewed as the little prince, and you are treated as such” by employees, White said. “You don’t get the flavor of succeeding or failing on your own.” In contrast, during his forays into work in distant states “I was held accountable to others’ standards,” he said.

He said communication in a family business is crucial. “My sons have got to know the problems, worries and concerns that I live with every day.” And a parent/supervisor needs to use a moderate balance of demands and encouragement toward a son or daughter rising in the ranks. “My father really allowed me to succeed,” White said.

In December 2014, Taco announced a dramatic reorganization at the top and it hired a person from outside the White family as the company’s new president. White said his sons “will need to fish or cut bait on their own under the direction and supervision of other people.

“The most important thing,” White said, “is that you must protect your core values.”

Todd Blount, 48, president and CEO of Blount Fine Foods, based in Warren, represents the fifth generation to manage his family’s business, which was founded after the Civil War as an oyster supplier.

Karofsky, of Transition Consulting Group, said the Blount legacy “shattered the odds. It’s a wonderful story.”

Blount said he has many friends and peers working in family businesses. He said he believes that, in many cases, the older generation hands over the business about a decade later than it should. In his own case, Blount moved into top management on the early side, in 2000, at the age of 33. His father had previously taken on the leadership role at a relatively early age, in the 1960s, because of the sudden death of his own father.

In his and his dad’s cases, Blount said, a nonfamily management team held the reins for a few years before his and his dad’s accession to leadership.

“If the current leadership is making changes as they go and then hands the business off early, it is smoother for everyone,” Blount said.

“My father had confidence in his team. Mistakes are part of the learning process. But he had faith and believed it was the best thing for the company to push [the transition] forward. For the next generation, natural ability just kicks in,” he said.

Blount said making big changes is both easier in some ways and harder in others for a family-owned business. “Often the family will have a sixth sense on how to do things well within their market scope,” he said.

“It’s harder,” Blount continued, “because the family will make the decision based on what is good for the business and what is good for the family. Sometimes these two might not be the same thing.

“Also, most family businesses do not have experience to manage the future business, and thus have to learn as they go,” he said. “Often smart companies hire executives who have been where they want to grow to.”

Blount said his father probably realized he was a bit stuck in his own ways of thinking and doing things, and he relied on the next generation to make key changes – which Todd Blount has, indeed, done, directing a significant expansion of the product line.

“Dad knew change had to happen,” Blount said. •

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