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Matthew Mohr stands in the Dacotah Paper Co. lobby. IMAGE: DACOTAH PAPER CO.

Dacotah Paper CEO: How to succeed with succession

FARGO, N.D. – Celebrating successful young business leaders is positive for the individuals and demonstrates our area has opportunities. Success can come at any age. Sustained success as an individual or enterprise is difficult.

It is well-known that businesses often fail with ownership-leadership changes. Very few family businesses thrive for multiple generations. Transferring ownership as a result of taxes, organizational changes, leadership style, work ethic (or lack of the desire to work), often contribute to the inability to perpetuate business ownership within a family.

Only 30 percent of family-owned businesses survive from the first to the second generation, only 15 percent survive to the third, and a mere 5 percent survive to the fourth.

I was fortunate to be able to work alongside my father and grandfather for many years. I also had their and my family’s support and confidence. Not every young leader receives the support of prior leadership.

Today I am fortunate to be working with my daughter as we look to excel in the future.

Young leaders can be seen as a threat, and new ideas are often met with skepticism. Younger leaders often feel their ideas and directions should be followed immediately, while established employees feel threatened by the new younger leader or their ideas.

Some young leaders, for a multitude of reasons, don’t get along with the people they work with. Recently when discussing family succession with a close friend and business owner, we started talking about family members working with people in the business. My friend startled me by saying, “That’s why my son is no longer in the business.” After five years of struggling to teach his son the value of working together, he had to fire his son. His son refused to recognize the cultural aspects of the organization and expected his ideas to be embraced by everyone, which led to dissension within their organization.

Another successful family friend of mine had a great business on the East Coast. His son excelled in school, eventually earning a coveted Harvard MBA. The son returned from school to manage the business, yet despite the advanced degree, he had no idea how to lead or work with others in the business.

His father, at the urging of trusted management and advisers, discharged the son and subsequently sold the business.

Such experiences are widespread through all industries and particularly in family-owned businesses with a strong leader. Such pressures make it even harder for young leaders to succeed.

On the other hand, success can be found in family ownership transitions. Two friends of mine – one in Kansas, the other in Wisconsin – took over their businesses from very strong and very charismatic and dominant fathers. Both of the fathers were considered “giants” in their industries. Both of my friends faced the challenge of living and working in the shadow of their father’s success and power.

One of my friends developed a more modern management-leadership style and continues to succeed. The other gravitated to an opposite style; he is quiet, he spends time contemplating his best business moves, and he has transformed the business under very difficult economic circumstances to sustained success.

Both organizations are now thriving under new leadership.

Our region has had a unique set of economic circumstances; over the past decade, we thrived while much of the country faced a downturn. Even so, many of us question the long-term viability and resiliency of our regional economy.

As we look at the many young professional successes, our optimism for sustained economic growth is enhanced. Building new enterprises and seeing positive succession, along with celebrating our success, shows we are on the right track for a positive future.