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Top Small Workplaces Conference Addresses Succession Planning and Sustaining Cultures in Quickly Growing Firms

The 2008 Top Small Workplaces Conference addressed pertinent issues for organizations committed to building strong workplaces. In this and future articles we will feature conference sessions. The sessions below took place on the first day of the event, October 14, 2008.

Two Perspectives on Leadership Succession

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This session looked at succession from the experiences of a leader stepping aside and a leader following in the steps of a key early leader. At the end the year, Paul Silvis, founder and Head Coach of Restek will turn over reigns of the 23-year-old chromatography products manufacturing firm to his employees through an ESOP buyout. Michael Foley has served as CEO of Reflexite Corporation, which manufactures optical components and films, for three years, after working on his transition with his predecessor for the previous six years.

Paul Silvis of Restek (left) and Michael Foley of Reflexite Corp. discuss succession planning.

Foley said that Reflexite has gone through two leadership successions; the first was from the company founders to Foley 's predecessor in early 1980s. With that came the ESOP, which has since become a big part of their culture. With the second transition that resulted in Foley becoming CEO, the goal was to think it through so that Reflexite's culture and values were preserved.

Foley shared elements that they had identified as important to Reflexite's succession process:

Lots of communication.
Oversight by an outside board. Three people on this board had been through a succession process on one side or the other.
Foley was assigned a mentor to help guide him through it.
360-degree feedback tools were used to identify where he was ready to be CEO, and where he needed to improve himself.
He developed peer groups with other CEOs in the ESOP community.
A series of symbolic transitions: changing of offices; Foley's predecessor had a transition celebration because he wasn't retiring but instead became chairman of Reflexite's board.

Paul Silvis founded Restek in 1985. He was a 30-year-old chemical engineer who knew how to make money for the company, but he didn't have much business experience. As the company got bigger, he learned more about business, seeking a range of training and developmental opportunities. He said he felt like he was running all the time. After about 15 years (2000), problems were getting easier and the entrepreneurial "edge" had worn off.

He thought the 20th year of company would be good time to step down as Head Coach, and he chose a 15-year employee, Don McCandless, to take over the role. He said McCandless got the promotion because he's not afraid to challenge Silvis and is respected by employees.

These were the elements that were important to Restek's succession process:

Silvis met with an organizational psychologist to establish a seven-year plan.
He spent years thinking of who could be successor, coming to the realization it shouldn't be someone who acts or thinks like him. "It's the differences between us that make us strong," Silvis said.
He decided to name person in the company's 18th year and give him two years to go through succession plan.
The two worked together closely, and are still doing so, to ensure the change is successful.

Sustaining Your Culture in a Quickly-Growing Business

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The speakers for this session were Jan Blittersdorf, President/CEO of NRG Systems, a manufacturer of measuring equipment for the wind industry; and Ann Jones-Weinstock, director of corporate social responsibility (a new position that was created in 2007 to manage NRG's corporate giving program).

Jan Blittersdorf of NRG Systems addresses attendees.

Blittersdorf said the company has benefited in employee and revenue growth, especially since 2000, from growing U.S. and worldwide demand for wind installations. They're doing all they can to keep up with industry growth, including adding staff and facility space.

To define and sustain their culture, five years ago NRG set out to define their core values. They emerged with the following set and have activated them as follows:

Environmental stewardship: Moved from desktop computers to energy-efficient laptops, installed solar panels that produce half their electricity needs on site.
Fairness – in employment practices and treating people well; no special deals. They also use open book management and established a taxable income bonus pool 10 years ago to help employees share in the company's success.
Innovation and Profitability: Created "eco crates" with banding and palette only – no cardboard or other traditional packing materials. NRG saves on costs and ships product to customers in a way they prefer.
Dedication and Integrity: Standing up for what the company believes in and taking opportunities to share their story.

Jones-Weinstock, who has served in her role for about a year, said it involves bringing intentionality of their values to people outside the workplace. This occurs in three areas:

Rural Vermont. Hinesburg, where they're located, has about 4,000 people and the surrounding towns have between 3,000 and 7,000.
Vermont as a whole. They take responsibility for helping the state because they have the capacity to do it, she said.
Renewable energy. NRG is closely engaged with the wind and solar industries and environmental groups that are pressing for renewable energy to address global climate change.

Jones-Weinstock also spoke about applying Newton's three laws of motion to social change. The bigger the rock (Earth), the bigger the momentum you need, she said. That means more stakeholders, working in a bipartisan way.

Examples of the company's work in this regard include:

They implemented a driving reduction plan among employees. The company had to fight the town on building a lower number of spaces in their parking lot than the law mandated to encourage employees to take alternate means of transportation to work or carpool.
Corporate giving program. They focus on renewable energy (action and education), energy conservation and efficiency, and community services. She said NRG prefers to give grants that have a double or greater impact, such as paying for better dock seals for the Vermont Foodbank so their building heating costs are permanently lowered.

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