When Gary Vermeer started tinkering in his shop in the 1950s it's hard to know if he envisioned a $900 million global company with a bent toward innovation. It's pretty clear the innovation part he was spot on about, the rest, hard to say. Yet he did build a big company and involved his children - Bob Vermeer and Mary Andringa - in the process. But where do Bob and Mary go from here?
In the middle of a new product rollout the press kit actually carried information about the family succession plan. And it appears Vermeer will make the generational leap just fine. "Only 30% of companies get to the second generation and only 12% get to the third," Mary Andringa, president and CEO, Vermeer, told media recently. "And only 4% get to the fourth generation."
That's not a great track record and one that concerns this privately held company. Yet the Vermeer clan did just what most farmers should probably consider doing: they brought in a consultant.
"We were intentional with this approach to succession," Andringa says. "We used outside family counselors."
They tapped a consultant firm and worked closely with them to develop a plan. It appears, in talking with Andringa, that there was little "baggage" on the succession program. In fact, she appears ready to move up and on the way toward retirement after guiding the firm through its latest five-year strategic plan. Four years into the plan, and she says, the company is on track. Remember that plan covered 2008 when the construction market - 70% of the firm's business - went soft too.
It's time for the third generation to move into management and that's the plan. On Nov. 1, 2014 Jason Andringa will assume the role of President and Chief Operating Officer for one year. And in 2015 he'll transition to the role of President and Chief Executive Officer for the company.
As for those second generation leaders? Bob Vermeer, current chairman of the board, will assume the role of Chair Emeritus, effective. Nov. 1, 2014. Mary Andringa will become CEO and Chair of the Board on Nov. 1. She'll transition to being the Chair of the Board on Nov. 1, 2015.
Working "off the farm"
Many advisers who look at legacy planning encourage having potential next generation family members work off the farm for a few years before coming back. The idea is they will get valuable outside experience to put to use on the farm.
Jason Andringa has done the same - in spades. He has two masters degrees and worked at NASA - yes the incoming President of Vermeer is a rocket scientist. But when he came back to Vermeer, outside directors of the company advised he also get global experience, so he spent the last three years in Europe working with Vermeer.
For your farm perhaps the global experience isn't possible, but next generation farmers do benefit from the opportunity. An Iowa farmer I know had a son who wanted to return - after a stint at a major corporation - and the son said he wasn't ready to come back until the farm had detailed job descriptions for employees. That approach would provide clear areas of responsibility and other tools for top management. And shows the value of having the next generation spend some time away from the farm.
While it's not clear if that 30% second generation survival rate applies to farms - the number may just be for corporations - you know it takes a lot to make that kind of transition. Vermeer has set a path to bring in a third-generation leader. And the company is already on an innovative path in all its businesses. The hottest of course being the prototype continuous round baler shown to media recently.
The future is tough on corporations and next-generation managers. Looks like Vermeer has a plan and they're sticking to it. That's what it usually takes to succeed.