Issue link: https://read.dmtmag.com/i/459961
22 | Boating Industry | February 2015 [ All in the family ] www.BoatingIndustry.com "It's one of the hardest discussions to have and, arguably, the most important," said Poole. A legal agreement was in place in the event of an owner's death but much of this informa- tion was not openly communicated to the whole family. Dealing with this transition during the death of her father made the legalese of the event that much more difficult. "When you're in an emotional situation … that's the worst time to learn because you can't take it all in," Poole said. "Having a succession plan because you're forced into it is, I can say, a very difficult situation." She notes that many families choose not to think about succession until the older generation knows they are ready to exit the business, and thus don't believe they need to discuss it. Poole strongly recommends the open dialogue from the very beginning on the direction of the busi- ness and its succession. "The next generation … [needs to] have a very clear outline of what they need to do to be involved in the business," said Poole. "[Succes- sion] can't just happen overnight. Mom and Dad can't just wait until the day that they want to be retired and hand over the key." Peter Barrett, senior vice president of market- ing corporate development at SmokerCraft, is the fourth generation of the Schrock family to work in SmokerCraft (previously StarCraft be- fore they purchased SmokerCraft). His mother Sara Barrett and his two aunts Cinda McKinney and Susan Graff also work in the business as board members, with McKinney acting as chair- man of the board. His grandfather Harold Schrock exited his ownership role in the business when he was 80 but remained an active member of the board up until a year or two prior to his death at the age of 97. "[My grandfather] allowed us a lot of free- dom and allowed us to run the company as we felt fit. He would guide us here and there and he would definitely let us know if we were headed in what he felt was the wrong direc- tion," said Barrett. SmokerCraft reviews and develops new suc- cession plans on a yearly basis to explore several "what if" scenarios and the various backup strate- gies that come with it. Barrett calls them "revolv- ing succession plans." "When you're in a company as old as ours and you have people who have been involved in the business for 45 years [or more], some of these handoffs aren't as easy as you might think," said Barrett. "A lot of it is learning the roles and trying to become comfortable with what that other person had been doing in the past." Barrett works on succession planning with his human resources department every week for the executive level, preparing for Doug Smoker's departure. Smoker is pushing more and more day-to-day operations to Barrett and is actively involved in the plan. "It's a big step for them to be able to let go and say 'OK, these guys have been doing this for a long time. I think it's time to let them make some decisions,'" said Barrett. "I think the hardest thing for the prior generation to wrap their hands around is letting go and al- lowing the next generation to make decisions and trust in those decisions." Vallely has worked with his father at the Bis- marck location while purchasing his father's shares of Vallely Marine as Vallely has taken on more and more responsibility. Throughout the process, the father and son had consistent discussions on who was performing what duties and ensured job clar- ity for themselves and the whole staff. Succession conversations are difficult but Vallely believes that once the conversations start, they're a lot easier than you think they are going to be. "Often times we all put off the hard discus- sions, hold feelings in or don't communicate our wishes amongst each other. Once communica- tion channels open up, these hard discussions al- ways become easier for both sides," said Vallely. Outside help for mediating these discus- sions has been advantageous for Vallely and he recommends others do the same as they begin the conversation. Whatever third party a fam- ily business works with should be well versed in privately held company transitions. Adrian Spiker, owner of Deep Creek Ma- rina, earned a law degree in 2001. Partway through earning the degree, he began a mobile repair service for personal watercraft and real- ized he didn't want to practice law. After he graduated, one of his mother's partners on a different venture had a marine operation to sell and he chose to buy it. With Spiker's legal background, he set up the business as an LLC and made his sister a minority shareholder. She would effectively in- herit the business in the event of Spiker's death. Spiker also has key life insurance on himself so that the business can pay of its debts on fixed assets, which was recommended to him by the bank when he first set up the business and is a practice he would continue into the future, even though it's not required. Harold Schrock stayed involved in SmokerCraft until two years prior to his death, while still allowing his grandson Peter Barrett, daughter Sarah Barrett and other family members room to grow and make their own decisions.