Succession
planning: an unpleasant topic,
but a necessity.The
Business Review (Albany) - by
Adam Sichko
(Albany, NY) – Sydney Tucker
Jones III had worked at his
family’s paper distribution
business for one year when his
father, 55, died of a heart
attack in 1971.
At 27, Jones was thrust into
being president of Hudson Valley
Paper Co.—a dramatic and jarring
adjustment he wanted the company
to avoid in the future.
One year ago, in the middle of
the recession, Jones stepped
down as president and turned the
Albany-based company over to his
daughter Samantha. It was a
smooth transition five years in
the making, offering a range of
lessons for businesses, whether
they’re family-run or not.
“When it works, it’s beautiful.
We really clicked on
everything,” Tucker Jones said.
“It’s definitely something
businesses don’t think about
enough.”
The primary reason that’s the
case is because succession
planning is an unpleasant and
uncomfortable topic, said Paul
Miesing, a management professor
at the University at Albany.
The scenario doesn’t always have
to involve someone dying;
succession could occur if
someone retires or takes another
job, or the company is acquired.
But businesses must also plan
for what happens for what
Miesing calls “the truck
scenario”—or what happens if a
company leader is hit by a truck
and suddenly dies.
Think of succession planning
like insurance: You’re investing
in something as protection in
case a certain event occurs.
“You’re coming to grips with the
inevitable. And the concession
that you are expendable might be
a real shock to the system,”
Miesing said. “But don’t let
circumstances sneak up on you;
everyone has to face these
nightmare scenarios.”
Even Tucker Jones, knowing his
father’s history, did not begin
his succession planning right
away.
“I’m immortal, as most people
believe they are,” Tucker Jones
said with a laugh. “I just
didn’t worry about it, other
than to make sure I stayed in
good health.”
Once Tucker Jones turned 55,
though, the future gradually
became more of his focus.
“As the fourth generation in the
business, I started to think
about my own mortality. The
business would go on without me,
but what about the family
ownership and involvement?” he
asked.
As it happens, Tucker Jones and
his family had Miesing’s “truck
scenario” talk about five years
ago. It led to the conclusion
that Samantha, who had an MBA
and experience as a corporate
marketing executive with IBM
Corp., would be best suited to
replace Tucker Jones.
At that time, Tucker Jones
changed Hudson Valley Paper’s
board, adding two acquaintances
who ran family businesses in
western Massachusetts.
“The biggest danger to any
closely held business is that we
start breathing our own exhaust,
thinking everything we do is the
right way to do it,” Tucker
Jones said.
The new board members were to be
advisers to Samantha.
“They’ve been real mentors,”
Samantha Jones said. “Just
because you’re talking about
succession plans doesn’t mean
it’ll happen tomorrow, but
that’s often what people will
fear.”
There are also legal precautions
to take during succession
planning.
Companies should draft what are
called shareholder or buy-sell
agreements, spelling out what
happens upon the death,
disability or retirement of one
of the owners, said Vincent
Valenza, an attorney with
McNamee Lochner Titus & Williams
in Albany.
