Who will lead?

How three local companies solidified their futures.
0822 Editorialcontent Sucession Planning Feat

From the pages of In Business magazine.

According to Inc. magazine, 66% of small business owners do not have a succession plan. Perhaps owners don’t have the time as they focus on managing their own companies in these trying times. Some may be unwilling to expose themselves to tax rules and regulations often associated with succession planning and therefore avoid the subject altogether.

Whatever the reason, not planning — no matter how young or old the company or the top executive is — could risk everything, from the culture and legacy they so diligently built, to their heirs’ futures as well.

We’ve looked at three local businesses that either planned or are still planning leadership transitions: Grams & Christoffersen S.C., Dave Jones Inc., and Park Bank.

How and why were the successors selected, and what qualities were considered for next-generation leadership?

Grams & Christoffersen

Like father and son

When attorney David Grams first opened David F. Grams & Associates in 1992, Eric Christoffersen was about six years old and living in small-town Indiana. Their paths wouldn’t cross until many years later, when Christoffersen, a student at the University of Wisconsin–Madison Law School, approached Grams for mentorship in hopes of landing with a small firm.

“Eric was a good student and intelligent,” recalls Grams. “I liked the fact that he was independent, had some finance background, and he wanted to be with a smaller firm.” As Christoffersen tells it, “He thought I’d be a good estate planner and suggested I concentrate on estate planning law. At the time, I didn’t even know what estate planning was!”

Christoffersen was just a first-year law student when he approached Grams, and ended up working side by side with him for the next three years while attending law school. When Christoffersen graduated with his Juris Doctorate (J.D.) in 2010, he joined Grams & Associates in 2010 as an associate attorney.

“Eric worked on some complicated cases the entire time he was going through law school,” Grams notes. “It’s one thing for a lawyer to go through law school and learn all the teaching, but it’s not that easy if you don’t work on the cases yourself. That’s why he progressed so fast. He believed in himself.”

Christoffersen pays it back now by mentoring young associates just as Grams once mentored him — encouraging them to be creative thinkers and to take ownership in their projects. Grams always wanted them to learn by working on their own before checking back with him, reminding them that in large law firms it’s not always easy to get the attention of senior lawyers.

Grams and Christoffersen grew to appreciate each other as mentor and mentee.

“What I think I brought to the table was a lot of respect for the older generation,” Christoffersen says, respectfully. “David treated everyone like family and had a wealth of knowledge and practice experience, and I just soaked it up.

“At the same time, it was beneficial for him to have me, a younger, more technologically savvy person to implement processes, procedures, and technologies to improve our services. We were able to leverage each other’s strengths. It also was clear that he was invested in me and honestly trying to improve me, not just make money off me.”

It wasn’t quite a father-son relationship, but it was close. “Personality-wise, we definitely clicked,” Christoffersen says, and Grams agrees.

One day, they began discussing the firm’s succession plans. “I had considered opportunities to merge with other firms, but it just didn’t seem right,” explains Grams, usually because cultures or philosophies didn’t align. Meanwhile, Christoffersen had developed into a loyal and trustworthy attorney.

“Ownership was never my end goal,” Christoffersen states. “When I started, I was the youngest of four attorneys. As others left, I stayed on. The next group was younger and in my peer group, and I became more of a leader among them. That’s when it became more apparent that I’d likely be the one to take over the firm.”

They agreed on a succession plan whereby Grams would sell 10% ownership shares to Christoffersen on an annual basis. “I had confidence in him and felt he would be a good owner,” Grams states.

Ironically, there was no legal document, no signatures, and the deal wasn’t even obligatory. “Either one of us could have backed out at any time because the deal was voluntary,” Christoffersen says. “Most attorneys would cringe and insist on a legal document, but for us, it worked out and we were very comfortable with it. I would never recommend it otherwise.”

By 2019, they each owned 50% and the firm’s name changed to Grams & Christoffersen. A year later, Christoffersen purchased Grams’ remaining shares.

Christoffersen, 37, is now the managing shareholder, while Grams — founding attorney but no longer a shareholder — works on special projects and offers managerial advice. “Eric’s not only productive but he’s managing the six attorneys and four staff members. That’s not easy!”

The firm has a main office on Madison’s west side, plus three branches, including a Stoughton office that Christoffersen opened in 2012.

Waunakee and Oregon branches were added after the succession was finalized.

“We have a unique model of helping transition small law offices by merging those practices into ours, usually when a senior attorney is retiring,” Christoffersen says. “David always wanted to be the smaller, more accessible firm, so having a physical local presence in small communities keeps to that vision.”

Christoffersen has a deeper appreciation and understanding of the importance of succession planning now. “David and I had a five-year window for transitioning, enabling him time to adjust to less leadership while I gained more leadership. The gradual transition was very important for both sides. The successor has to be ready to step away. It’s not something you can just hand off if you want to do it in a healthy way.”

Having survived a successful succession, the two attorneys offer advice for business owners struggling with their planning decisions:

Notes Christoffersen, “Sometimes business owners look at succession planning as an opportunity to sell to an outside company, and that’s fine as long as they weigh all options first.

“But if you just sell your company to the highest bidder, you may risk losing parts of its culture. So, if there’s a way to keep the transition in house, it may be possible to retain that culture and move the legacy forward.”

Grams adds a few more suggestions:

“Start early, and think carefully about who will succeed you. Most people don’t plan soon enough.

“Ask a lawyer, accountant, or coach to help you plan for the present and the future. [Grams consulted with a CPA firm about tax ramifications, for example.] Trust the experts!

“And plan not just for today but for the next six months, the next year, five years, or beyond. If you have goals, you’ll have a future. The opposite can also be true.”

With Christoffersen fully in charge, does Grams have any concerns?

“None,” he laughs. “Eric is like a son to me. I’m at peace.”

Dave Jones Inc.

Future fix

Dave Jones first opened his Mount Horeb plumbing business in 1977. As his business expanded, the company moved to Kilgust Road in Madison to better serve its clientele. The company has grown into one of Dane County’s largest employers, with 530 people providing plumbing, HVAC, fire protection, and electrical services.

In June 2015, the business was transferred over to its second generation, with siblings Greg Jones and Holly (Jones) Kellesvig buying out their parents, Dave and Jill Jones.

Another change was recently announced. “We have been going through a leadership succession for the past 24 months,” states Greg Jones, who has served as president/CEO since 2012. Kellesvig, Jones’ sister, friend, and business partner, had served as chief operating officer for the same time period. The siblings frequently discussed their personal and professional goals, their passions, and how best to keep the business successful.

Enter Heather Schommer, a nonfamily member who joined Dave Jones Inc. as a process improvement analyst five years ago. She continued to impress the leadership team and assume more responsibilities. In 2020, Schommer was promoted to executive vice president.

When she was first hired, there was no discussion of a president’s role, Jones says, but as he and Kellesvig began exploring changes at the top, Schommer’s name kept emerging as a solid candidate.

This past February, Schommer was named president of Dave Jones Inc. Greg Jones remains CEO and Kellesvig became chief culture officer.

The Jones siblings addressed their plans for leadership changes with the company’s management team in August 2020 but set no timeline.

“We knew this was the direction we wanted to go, but we had the ability to be patient and do it right,” Jones reports.

The top-level change is a win-win for all, he explains, because it allows him to focus on the vision and strategy of the company; it allows Kellesvig to tend to what she’s truly passionate about — the people and the culture; and it enables Schommer, who comes from an 80-20 background, to focus on the company’s day-to-day operations, process improvement, and execution.

Jones describes Schommer as a servant leader who puts others first. “She will not cut corners to gain a short-term win. She has our full confidence, and we will support her in any way she needs.

“This is not an ownership change,” he clarifies, “it’s a leadership succession.”

Park Bank

Poised for leadership

Park Bank, a local, independent community bank and family-owned business started by the Senty family in 1966, has been under the leadership of longtime President and CEO Jim Hegenbarth for the past 23 years.

When Ken Lammersfeld, executive vice president and chief operating officer, joined the bank in 2010, it was clear that Hegenbarth was already zeroing in on the bank’s future. “Successors are discussed all the time,” notes Lammersfeld. “We cover financials, compliance, products, and services. We spend a lot of time talking about who needs to be developed further, and in what capacity.”

At Park Bank, the future executive team is being groomed to take over as others retire. They include Bobbie Jorgensen, senior vice president of finance, who will succeed Rob Laux as CFO within a year; Ryan Shea, senior vice president of credit, who will succeed Darwin Lynde, the bank’s chief credit officer, in the next 18 months; and Joshua Marron, executive vice president-chief banking officer, who will likely succeed Hegenbarth as CEO when that day comes. “These three individuals are the most respected leaders at Park Bank,” notes Lammersfeld.

Bank staff understands that a shift has begun. Department leads who traditionally reported to Hegenbarth as president and CEO are now reporting to Marron as his training becomes more formalized.

It’s a succession strategy that was set in motion years ago, when a leadership committee identified potential candidates based on their capabilities, solid work ethic, technical expertise, collaborative approach, and an appetite to continue learning.

Hegenbarth used that information to select succession candidates and invited them to be members of the bank’s strategic planning committee, where formal development plans were designed to help each improve in areas they may not have been exposed to.

He worked extensively with each of the candidates on individual projects designed to improve the bank’s performance, and they received additional training through the Independent Community Bankers of America (ICBA), a trade organization.

Park Bank also works closely with UW–Madison’s Graduate School of Banking, which offers a three-year summer program for advanced banking managers. Marron graduated from the program in 2018, and Jorgensen and Shea will graduate this year. Another bank employee is just beginning in the program. In all cases, tuition is covered by Park Bank.

“The students work on pretty significant projects associated with running a bank,” Lammersfeld explains. “They’re getting a hands-on opportunity to talk about pricing deposits and loans, deciding how to market the bank, or discussing core strategies. It’s an exceptional program. Many banks participate, but we always have someone enrolled in the program.”

Marron, Jorgensen, and Shea all have been in banking for about 20 years, and through Park Bank’s training program they’ve been exposed to strategic planning, received more in-depth financial planning and regulatory requirement training, and learned more about the bank’s other departments. It’s all designed to prepare them for succession events and moving the bank forward. “It’s really worked out nicely,” Lammersfeld adds.

As future community leaders representing Park Bank, they will need to be collaborative and trustworthy, but their technical knowledge will be just as important.

The bank has a similar leadership program for its branch network, whereby newer employees who demonstrate required skills can prepare for branch management with the hope of leading retail locations.

“We’re in a brutal labor market right now, so we work hard to convince new employees that people want to build careers here,” says Lammersfeld.

The fact that Marron, Jorgensen, and Shea all moved up the corporate ladder is a primary recruiting advantage at a time when it’s been difficult to retain people in entry-level positions.

“We’re not just talking about it,” Lammersfeld insists. “It resonates with people.”

Over the last six years, Park Bank has nearly doubled from a $700 million bank to a $1.3 billion bank. It has 170 employees, eight physical branches, a Fitchburg headquarters, and a mission to continue to grow and retain its independence as a strong community bank in Dane County.

As the banking industry changes, core competencies like strong organizational leadership, financial planning expertise, credit administration, and community service will remain the same, Lammersfeld says. “Technology is a huge disruption across all industries. Banking always used to be conducted in physical buildings, but now we are providing services on mobile devices and home computers, and that changes how business is done.”

Ongoing regulatory changes and a rise in nontraditional competition is impacting the industry as well, he adds.

“Startup tech companies and national retailers are now trying to compete for our business and speaks to what the new generation will face as they move forward leading this organization.

“As we watch the consolidation of the consumer banking industry where many banks are merging or selling, one difference may be that they don’t have a succession strategy.

“That will not be a problem for Park Bank. We always will be a local bank.”

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