For the first episode of Succession Stories, I was excited to speak with Tony Uphoff, CEO of Thomas. In fact, a talk that Tony gave last year at Carnegie Mellon helped fuel my general concept for the podcast. In his presentation, Tony discussed his journey as an outside executive hire for a 120-year old family business, combined with his startup and disruptive technology experience.
I found Tony's talk relatable, having spent years working at mature and innovative companies. A question intrigued me…how do legacy family businesses pursue innovation?
I was curious to hear more stories about company transitions and what the next generation did differently to move the business forward. That’s the essence of the Succession Stories podcast.
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Welcome to Succession Stories, insights for next generation entrepreneurs. I’m Laurie Barkman.
I've spent my career bringing an entrepreneurial approach to mature companies struggling with change. As an outside executive of a third generation, 120-year old company, I was part of a long-term succession plan. Now I work with entrepreneurs, privately-held companies, and family businesses to develop innovations that create enterprise value and transition plans to achieve their long-term goals.
On this podcast, listen in while I talk with entrepreneurs who are driving innovation and culture change. I speak with owners who successfully transitioned their company, and others who experienced disappointment along the way. Guests also include experts in multi-generational businesses and entrepreneurship.
If you are a next generation entrepreneur looking for inspiration to grow and thrive, or an owner who can’t figure out the best way to transition their closely held company, this podcast is for you.
On this episode of Succession Stories, I'm joined by Tony Uphoff, President and CEO of Thomas. Thomas is a family-owned, 5th generation 122-year old company that successfully transformed its business model, technology, and culture.
Three years ago, Tony joined Thomas to continue its digital innovation. We discussed key lessons Tony learned about mature industries mobilizing for change, ways to drive innovation while also leveraging the core competencies of the past, and having an entrepreneurial culture in a legacy company. If you are thinking about ways to innovate and drive change, you may find these insights beneficial for your business.
“There are a lot of tributaries off of the idea of succession, and there's a whole ecosystem which is really fascinating.”
As an outside executive, what attracted you to the company?
1. Transparency – They were incredibly open and far more so than most companies at that level. Early on before I had signed things, they gave me access to the CFO, access to numbers, access to various people. They really wanted to make sure that I saw the opportunity and they wanted me to come to them.
2. Opportunity – I saw the technology they had built, it was clearly a stage where they had gotten a bit siloed. I could clearly see the strategy was floating around, but it wasn't clarified. The company wasn't organized to execute well against that strategy. And there were some insourcing, outsourcing challenges in and around some technology areas.
3. Culture - Once I got in the company, I was blown away by the level of talent, but also kind of a pent up energy. We know we're not organized for optimal scale right now, and we want somebody to help us with that.
4. Market Transition - I have an instinct on getting into markets around the time there's a massive market transition happening. As I started to study industry 4.0, I saw it is not some slogan. We're witnessing a step change in the way digital technologies are converging with traditional industrial products and services. As a business information or marketplace provider, I want to be right in the middle of situations like that because it's exciting. I want to be in the middle of this party because it's going to be a lot of fun.
“We won't own the future the way that we own the past unless we stop doing this.”
For organizations going through transformation, it’s not going to happen overnight
Importance of culture and change management - When someone like me walked in the door and says, we're going to change everything and we're going to change who reports to who, and do all this kind of stuff. It was a moment for me where I went, Tony, go back to your core chane management training. Don't miss a step here. It's a horizon goal, but I think we're making a lot of progress on it.
Transformation - The core business was print, and over time the company invested in interactive CD-Rom technology. They were very aware that the world was changing, and they made an incredibly bold decision in 2005. They burned the boats on the shore and said, we're going to stop producing the big Green Books. Print was still dropping a lot of money to the bottom line; it was starting to come down, but hadn't gone into free fall yet. That took guts, fortitude and vision. It was a gutsy move to do that. And when I came in and started to look at some of the technology dynamics, the company had invested in technology but had gone through an era where a lot of it was outsourced. I'd like to think that I'm having a positive influence, but as I think back, I'm doing many of the things that people before me have done at this company. I think probably some of the CD-Rom and the early internet stuff was probably just as revolutionary in its time, as thinking about cloud computing and infrastructure with AWS is now.
Digital Transformation in Manufacturing – For Industry 4.0, we've done a ton of things around videos, new content, tutorials, guides, series of webinars and live meetings out in the marketplace. We take all of our data and information, and go into individual regions of the country and share the latest sourcing trends. This isn't a new playbook, but for many of our customers it is new. We take it as a responsibility to do good by doing good. As we help educate this customer, obviously we're the beneficiary of that education because we provide the products and services that are going to help them do the kinds of things that we're describing.
Do you get the sense that business owners are prepared for the transition that's coming?
I'm going to make a blanket statement and say the answer to the question is no. I think you're seeing in many cases, baby boomers that are delaying retirement because they don't have a clear succession plan. They don't look at the world quite the same way. The term succession planning, when I bring it up to some of them, they're not completely sure what I mean, until I unpack it a little bit and then they'll kind of wince and say, I thought my son was going to be interested, or maybe their employees would buy us out. We're starting to do more content around succession planning so that people can open up and have these types of conversations.
Succession in Family Run Companies
If you need to bring in outside management to run it, that is a form of succession planning. It's very tricky because founder run or family run businesses have certain quirks to them. No different than if you were sitting around my family dinner table. Thomas embraced people who came from the outside. It wouldn't have been anywhere near as enjoyable of an opportunity nor successful had they not given it a fair amount of thought, and give the executive some room to come in and put his stamp on the company. There's some cultural dynamics that founders of family run companies really need to think through.
Advice for family businesses that are considering a transition to a non-family member CEO
Define what you think you need in a candidate. I find when companies have gone through this, they tend to be overly generic. I want good financial skills or I want good operating skills. It's kind of like if you picture a resume, to me it's probably 40% in the resume. And the resume is simply the ticket that gets you into the room. What I always recommend to people is once you've reviewed the resume, and you've validated that it's accurate and the person has that experience, throw that away because the resume becomes irrelevant at that point in time. Now the 60% is in the attributes you need for this person. What do you need to do to make this person successful?
I recommend people really sweat the details. If the right person walked in the room, what kind of background, what would their interpersonal skills be like? What would their EQ versus IQ be like? We collectively tend to under think that because we get enamored with the pedigree. But most of us realize when it's actually running a culture and a business, those become incredibly unimportant, very fast. If the person doesn't have the attributes of leadership skills, communication skills, adaptability, all the things that we need from modern leaders today.
What does your personal billboard say?
“Learn how you learn.”
Thanks for listening to the Succession Stories Podcast. I hope you enjoy this episode and that you'll consider sharing it with a friend. If you think it's worth five stars, please go to iTunes and rate it so that others can find it as well.
I would love to hear from you. Tell me what insights inspired you today and if you have suggestions for content, please let me know. You can reach me @ Laurie Barkman, on LinkedIn, Twitter, and Instagram, or send an email to email@example.com.