Transitioning between generations can be a gantlet for family-owned businesses. Two-thirds of them don’t make it to the second generation, and another 50 percent don’t make it to the third generation, according to Forbes.
Think of this month’s cover story on Ed Morse Automotive Group as a case study on how to achieve that third-generational goal. There were a few takeaways I had on how the company was able to do that despite encountering adversity.
One is that the right tone was set by company founder Ed Morse. There wasn’t a task he would ask somebody to do that he hadn’t already done himself, or would do himself, says current chairman and CEO Teddy Morse, his grandson.
No wonder then that Teddy started out as a gofer during his first working summer. The next year, he was assigned the hot, sweaty job of detailing cars that had just emerged from body shops.
Having the owner’s grandson toiling in the summer heat sent a clear message to Teddy and other workers about whether the family had a silver-spoon attitude.
Teddy was exposed to many facets of the organization. He helped mechanics, worked in finance and insurance, served as an assistant general manager and then as GM before moving into the corporate office.
While there were instances of his father and grandfather yanking his chain, which makes for some funny anecdotes, there were also the times of reassurance. During his time running Bayview Cadillac, Teddy faced the challenge of working in a dealership while under construction, but his father reassured him everything would be OK and he would get through it.
Companies also have to be prepared for the unexpected. In the case of the Morses, Teddy’s grandfather lived to 91, but his father died at 66 last year. However, Teddy was already well-schooled. Moreover, there are other family members who play key leadership roles. Teddy talks about how much he appreciates them and how smart they are. That’s a contrast to some family businesses where internal strife reigns.
The Morse family also did careful planning to avoid disruption. I don’t know about all of the estate-planning details, but Teddy talks about how his family lives beneath its means. I’m sure they own some nice cars—they have five Cadillac dealerships—but they aren’t living a jet-set lifestyle with multiple homes in exotic locations. Reinvesting in the business always has been a priority rather than milking it.
Teddy also indicates he wants to put his own stamp on the business. It wouldn’t be surprising to see the automotive group expand into new geographic markets or add new brands to its dealership roster. He’s a relatively young CEO, and the future for Ed Morse Automotive Group looks bright.
The name of Silver Lining Inflight Catering was incorrect in the Up & Comer Awards biography for Mike Linder in the July issue.