Issue link: https://www.e-digitaleditions.com/i/215553
Succession Stories continued Paul's son, had just graduated from college. A four-year degree is one of a handful of prerequisites for entry into the family business. Prospects must also spend a minimum of two years employed—anywhere other than the family business—and have some "measure of success" in their chosen profession. The latter of which is open to interpretation. "I've got two brothers, three cousins, and two nephews, and I never heard back anything other than they were confused by the letter," says Ellingson. "The point was to set the tone and let everyone know that we wanted to include all of my father's heirs—but they had to express interest in it. It wasn't a freebie." Preparing to Lead Currently, there are three third-generation Ellingsons involved in the business. Paul and Rick's nephew, Lucas, works in contract sales at the company's Everett location. This past October, Rick's son Eric made the move to BargreenEllingson, where he will be working in the distribution center to learn the operations end of the business. Prior to joining the company, he spent five years in the financial services sector, followed by a two-year stint at both Unified Brands and Singer Equipment Co. "Eventually his role will center more on contract sales," says Ellingson. "The way it's shaping up, it looks like it will be David and Eric, sort of like the Paul and Rick show." Paul's son David was the first to express an interest in working his way up the ranks and joined the company six years ago after working at Hobart, where he spent much of his time calling on dealers in the Northeast. Two years ago, David was named president of the company. To signal their commitment to the transition, the brothers took significant cuts in pay, according to Ellingson. "All of our senior management people knew well in advance what was happening and that it would happen," he says. "We didn't commit to a specific timeline, though, because the whole idea was to wait and see how everyone evolved in their roles. David has done a good job earning their respect the last six years. I expect that it shouldn't be very long before we will be down to working very little." Parting Advice: Prepare successors to lead by getting them involved in leadership groups. "We thought it was very important for David to have access to outside mentoring," says Rick Ellingson, one of the owners of Bargreen-Ellingson. "Being involved in the YPO (Young Presidents Organization) has been crucial to his development." Outside opinions can be a big help. "We have an outside board, consisting of three people who have served in CEO roles in large corporations," says Ellingson. "Jeff Rhodenbaugh is one of them and he's been really involved. A friend of mine, Ray Tennison, joined the board 34 FEDA News & Views two years ago with the specific intent to help mentor the next generation. His business, Simpson Timber, is a seventhgeneration company and does about a billion in sales. The third board member is Bill Oldenburgh, former COO of Dreyers Ice Cream. It's been really fun having them mentor us in how to successfully do a succession plan. One of the neat things about family is also one of the bad things about family—they know each other too well—and knowing each other's strengths and weaknesses as well as we do, we tend to focus on the bad stuff. When you have outside people, you can deal with it more rationally and avoid the colorful stuff. It's gone very well. The key to the whole thing is that you can't communicate enough." Let Your Children Have a Voice, says Demetre Selevredes of Federal Supply Co., Waukegan, Ill. When Demetre Selevredes took over Federal Supply Co., he gave his two kids something he never had—a choice. Working in the family business wasn't a given, like in his day. If they were interested in making a career out of it, fine, but they were encouraged to explore life outside of foodservice before committing. "Back then, no one ever asked me those kinds of questions," says the second-generation owner, which is probably why he hesitates when asked if he always wanted to be a part of the family business. That's a question he's grappled with over the years, despite Federal's longevity and continued growth in the Southwest and abroad. "Originally it wasn't a career choice," says Selevredes, a double major in college with aspirations of studying law. "Then my mom got sick and I came home and never finished. After I got over myself, I figured I would make the best of it and then we started working." Selevredes' dad, a Greek immigrant, opened his first business in the 1930's, when a classification for foodservice equipment or supplies didn't exist in the City of Chicago, so it was categorized as a hardware store. Federal's predecessor, Federal China and Glassware, didn't come along until the 1940's and enjoyed a steady flow of business from area hotels and nightclubs—although the elder Selevredes eventually decided to sell its assets to the Lippert family in 1950 and move his family to Greece to pursue another business venture. "When that didn't work out," says Selevredes, "we finally returned to Illinois for good in 1952 and opened another dealership. It took him awhile to figure out where he was going to go because he couldn't compete beyond a certain radius, due to the terms of the original sale. That put him in either one of two locations to operate, Gary, Ind., or Waukegan. He decided it would be better to relocate between Chicago and Milwaukee, where he had lots of contacts, and continued on page 38