How to Survive and Thrive Despite the Lack of Succession Planning
8After her father suffered a stroke, Kathleen Thurmond had to jump into managing her family business, without previous experience in the business. In this interview, Kathleen share tips on how to survive and thrive – successfully selling the family business 12 years later, despite having no succession planning, experience, or guidance with running the business.
If you are in a sink-or-swim situation with your family business, relax it can be done… here is how.
How did you become involved in your family business?
My father had a stroke and it prevented him from being able to do anything with the business. We had an outside person running it day to day. My father was overseeing it and then he had a stroke that created a much bigger problem. At this point, my mother asked me to step in along with one of my brothers.
How was it for you to jump into the family business without warning and running it without guidance from your father?
It was exhilarating and terrifying at the same time. I had just come from being a director of an AIDS hospice program and I had 35 employees. But it was very different from stepping into a uniform supply industrial organization. There were two unions and 50 employees. I had to deal with people who had been there a long time and knew a whole lot more than I did about the business. The fortunate part is when you don’t know very much, you are not as afraid as you might be if you really knew more.
What was your background before joining the company?
I had about 18 years in the fields of non-profit and social work. I have a Master Degree in Social Work, which I got after three years in journalism and I was writing and in to photography prior to that.
With my social work career, I often ended up in management. I was an assistant director in a hospital for 8 years and then went on to run an AIDS program. I was also always politically active in whatever I did because I am an activist at heart. I was on the AIDS commission for LA (Los Angeles) and president of a Long Beach AIDS consortium.
When you joined the family business with your brother, what was your position?
For six months, we shared a Vice President role. Each of us having the same title but he was living in San Francisco at the time. The business was in Long Beach and he never intended to stay. He worked in the business when he was younger in the production area and routing – delivering clothes. He knew the business from that perspective but he was a masseuse and had no desire to either leave San Francisco or to be a part of the business.
When did you start running the business by yourself?
In six months, I was in charge.
What would be your advice for other next gen that do not have a succession plan and all the sudden find themselves in the same situation-?
My first piece of advice would be to do the planning so that the family knows what to do in the event of death or illness of the founder. If you don’t do that then, learn everything you can about the business. Take every industry specific and leadership classes. Immerse yourself in education.
I joined a group of 12 men who were owners of companies like mine. We met every other month and talked about the business. We met at each other’s business so that we could and critique each other. We would give advice and talk about the latest innovations in the industry. That was a big help.
I always attended the trade shows, national conferences, and equipment shows. You learn so much when you talk to other people and see the equipment that someone talks to you about over the phone. In industrial laundry, there are washers, dryers, sort systems, and boilers so it was just like a whole other world for me.
Did you create a team of people to help you?
There were managers when I came in. The difficulty was they were hired primarily by my father. He was more of an authoritative figure, which is usually the case with founders. My management style was more collaborate and inclusive. I think it was important to be that way because in order for them to accept me as a leader, I had to also accept them, their expertise, and knowledge about the industry. I think that made for a much easier transition then if I were to go in and pretend I knew everything and I really didn’t.
Over time some people, I let go of or they let go of me because the style was different. It didn’t sit well with some people who had been there for years. There was also new energy, new people that was coming in who were from the industry and others who were experienced managers from other industries.
After 12 years of running the company, the decision was made to sell it. How did it feel to sell the family business? Why was the decision made to sell it?
When I was about two-thirds of the way through that 12-year process, I got my MBA while running the company. One of things that a professor said to me was what is your exit strategy. Although I didn’t want to hear that at the time, it really planted the seed that I needed to be thinking about it.
I was also very active in my industry and the only woman on my national trade board. I met the big guys Aramark, G & K, Cintas and UniFirst. They began to know me and also began a 5-year project with EPA on environmental management and wastewater treatment. We developed best management practices for the industry. All those things exposed my relatively small company to the larger guys.
They began to call me and at first I didn’t want to talk to them at all. It scared me. I thought I am never going to sell and will be with this company forever. Then, I remembered what my professor said and I began to talk with them. It was then a gradual process and it began to make sense. I sat down one day and really contemplate – did I want to stay here forever? The answer was no.
Selling is all about timing. Of course I am not clairvoyant. I didn’t know the economy was going to crash in a few years but the reality was I sold at the perfect time. It was when the bigger guys were paying a lot for companies my size. More than they paid a couple of years later. Thank goodness I did that because my mother, who is still alive at 93, is comfortable.
Emotionally, what is easy for you to sell it?
I knew deep down that it was the right thing. At the same time, I was letting go of a profession that I thought I would be in for the rest of my life. I was letting go of my dad’s dream. He died shortly after I began to run the company. My mom was helpful and said that if you feel like it is the right time to sell, then let’s do it. It was nice to have her support.
You are the President of the National Association of Women Business Owners-San Francisco. What is the most rewarding aspect of this position?
I wrote an introductory message for our monthly newsletter and a woman called me and said that what you wrote in the newsletter made me feel like you were speaking directly to me. That is what I love. I love mentoring women. I feel like I am here in the world and we as women are to lift each other up. Support each other in our businesses. Champion each other in what we hope to do and really to encourage each other to prosper in the world of business. It is not easy but it is much better for women now. With only 15% of women on corporate boards and 4% of women are Fortune 500 CEO’s, we still have a lot of work to do. It is inspiring to me when I see other women collaborating and working together to boost each other.
Kathleen is a natural leader with a strong “make it happened“ attitude. That is her greatest asset in dealing with having to take charge of the business with no experience or guidance. What about you? Have you ever dealt with a situation like that? How did you manage it?
Next Generation Revolution 