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Successful Succession – A Work in Progress Best Practices Left to right: Peter John Holt, B.D. "Pete" Holt, Corinna Holt Richter, and Peter M. Holt HOLT CAT prepares the fifth generation to take over the business. By Joanne Costin You've probably heard the statistic before: Seventy percent of established family businesses won't make it to the next generation. Only 10 percent make it to the third generation. With the fifth generation of Holt family members taking their place as leaders in the business, Holt CAT has certainly beaten the odds when it comes to business succession. Any dealer who wants to ensure that his or her family-owned business continues, might want to note how the San Antonio, Texas-based Caterpillar dealer is handling this important task. Corinna Holt Richter and Peter John Holt, the daughter and son of CEO Peter M. Holt, are the heirs apparent to HOLT CAT, the latest generation to work in the family's construction equipment business that began with their great grandfather, Benjamin Holt, who also famously developed the first practical track-type tractor in 1904. His company later merged with Best Tractor to form the Caterpillar Tractor Co. "CAT, more than any company, has invested in making sure that there is continuity across generations," said Marion McCollom Hampton, senior partner with Banyan Family Business Advisors, located in Cambridge, Mass. "They don't want a disruption in their dealer network." Banyan has worked with the Caterpillar dealer families for more than 30 years on this issue, and Hampton provided guidance to the Holt family as they worked through the complicated process of business succession. According to HOLT CAT President and Chief Operating Officer Allyn Archer, the question, "What is your succession plan?" was a topic of discussion in meetings with the manufacturer. "There is comfort knowing that we now have one," said Archer. "And excitement. Change for some people is difficult. There is fear. I haven't seen that with this change. Everyone knew that there would be change of the guard." Working in the Heart of the Business Despite their young age, Corinna, 29, and Peter John, 26, are relishing their roles at HOLT CAT. Corinna is general parts manager and Peter John is general service manager for the machine division of HOLT CAT. According to Archer, their placement at the heart of dealer's business is no accident. "That's a wonderful training ground for them," said Archer. They work with seasoned veterans and report to Ron Craft, vice president of Product Support. Corinna joined the business in 2011, after the family worked with Hampton to set up a family council, define their goals, and to establish a time frame for the Next Generation to join the company. "It was so important to keep it structured," said Corinna. According to Hampton, one of the most difficult parts of business succession is sitting down and having an open conversation about the future. "If the two generations can't talk together well enough then they can have radically different assumptions about the process," she explained. "We help them become intentional, disciplined, and face the decisions in a timely way." A Vanderbilt graduate, Corinna's decision to leave a career at Sotheby's in New York was motivated by a Benjamin Holt 48 | www.cedmag.com | Construction Equipment Distribution | August 2013 48_Best_Practices_Feature_KP.indd 48 7/25/13 12:58 PM