An Industry Watch + features a collection of stories, Q+A's, How-To's and more to give readers a 360 degree look at industries.
Traction For The Family Biz
Family business expert finds EOS is a way to provide an overarching structure for growth
It’s no exaggeration to say that family businesses form the backbone of the American economy. According to Sara Stern, president of Family Business Minnesota, approximately two-thirds of privately held businesses are family-owned — that is, wholly or majority-owned by blood and/or marital relatives. Minnesota’s family business ecosystem is especially well developed; some, like hardware-and-appliance outlet Warners’ Stellian, are bona fide household names.
Fixing the family business
Family businesses don’t always run as well as they could or should, though. While every enterprise faces challenges, smaller, closely held companies face formidable risks: uncomfortable mixing of the business and the personal; perceptions (or reality) of nepotism; reluctance to break with tradition; poor or nonexistent succession planning and much more.
Stern helps family businesses face those risks head-on. A trained business coach since 2001, she’s a veteran of Target and the University of St. Thomas. In her current role, she immerses client companies in the Entrepreneurial Operating System (EOS), a “business optimization” framework designed for closely held companies with fewer than 250 employees.
EOS is the brainchild of Gino Wickman, a Michigan entrepreneur who turned his family’s struggling business around in three years. Wickman eventually sold the business, formed the Detroit chapter of the Entrepreneurs’ Organization, and set about expanding EOS into a full-fledged system — synthesizing his own life experiences and borrowing liberally from cutting-edge management and leadership theory.
“Wickman took all the best busines-leadership thinking and put it into EOS,” says Stern.
Professional EOS Implementers must endure a rigorous three-day “boot camp” and collaborate regularly within the EOS network. Certified EOS Implementers, the system’s gold standard, must have at least 10 EOS implementation clients under their belts and conduct at least 48 EOS sessions per year. Thanks in large part to Minnesota-based Mike Paton, an early adopter who literally wrote the book (with Wickman) on EOS, the Twin Cities region has more implementers than any other U.S. metro: great news for Minnesota-based family businesses looking to optimize.
Challenge, meet solution
EOS is built around three core principles: Vision, Traction, and Healthy. Traction is the linchpin: the means of “instilling focus, discipline, and accountability throughout the company.”Traction empowers family-business leaders to implement their vision clearly, rationally and efficiently so that they (and the rest of the team) are healthier and happier.
“EOS and Traction remove the personal aspects from the decision-making process,” says Stern. For instance, the system helps leaders identify which jobs they need to create, define and fill with candidates whose skills and values align — rather than simply creating one job per family member to quell conflict.
Well defined roles are especially important during leadership transitions, which pose unique, potent threats. Stern helps clarify roles well before succession plans are in place, so that “it’s crystal clear who should fill each role,” she says.
“If family members don’t get jobs or move up the ladder because there aren’t enough positions to fill or they’re not suited to the roles, it becomes the system’s fault,” says Stern – not Mom’s, or Grandpa’s or whoever’s calling the shots at the time.
EOS in the field
EOS can be applied across the entire organization: recruiting, human resource management, sales, process efficiency, vendor relationships, finance, logistics.
Jeremy Sizer, who owns and runs Coon Rapids-based Industrial Door Company with sister Jodi Boldenow, retained Stern to help the multi-location company implement EOS — and it’s paying off.
“EOS provides our management team with direction and organization,” says Sizer. “We’re now in sync and on the same page more often than not.”
Sizer’s team works off an accountability chart that shows precisely who reports to whom, and where those people are spatially and geographically. It also uses EOS principles to implement division-based goals that break the overarching corporate vision into manageable chunks. That’s a big help for a family-run company with subsidiaries in Arizona and Ohio.
“EOS has really helped us organize the business as we grow, which is especially important given that we’re spread basically from coast to coast.”
That’s likely to serve the far-flung IDC crew well in the years to come. According to Sizer, IDC is aiming to double its revenue by 2022. He expects to reach this aggressive goal mainly by buying out smaller competitors and adjacent businesses — and, naturally, integrating EOS into each new acquisition.
No matter how those acquisitions play out, EOS is an invaluable confidence-booster for Sizer. He and Boldenow, both in their 40s, have six kids between them. The older ones have already worked entry-level jobs at IDC. If they or any of their younger siblings are game, Sizer and Boldenow would love to keep IDC in the family for another generation.
But Sizer is realistic. He figures he and Boldenow have about 15 years to determine whether any of their kids want to make careers at IDC. If not, he says, “We’ll start thinking about selling the business.”
Thanks to EOS, they won’t be selling a Sizer/Boldenow family heirloom. They’ll be selling a formidable industrial-door parts manufacturer that could well become the crown jewel of its acquisitor’s portfolio.
Industrial Door Company
Headquarters: Coon Rapids
Leadership: Jeremy Sizer and Jodi Boldenow, co-owners
Description: Manufactures springs and other heavy-duty door products at three facilities in Minnesota, Ohio and Arizona.
Q&A: Jeff Warner
Former President of Warners' Stellian
Resources for Family-Owned Businesses
Minnesota’s small and midsize family businesses face plenty of challenges: price competition from larger peers, wage pressure from multinationals, confusing and contradictory regulations — you name it.
But they’re not in it alone. These resources — and many more not mentioned here — have their backs. Most of the resources listed here were gathered from the University of St. Thomas’s excellent Family Business Advisers directory, with assistance from Sara Stern, president of Family Business Minnesota.