Working in the family business can present its own challenges, but transitioning from one generation to the next is a whole new level of complicated. Sonderen Packaging is currently in its third generation of ownership. The family members frequently check in with each other to see what is left undone, unsaid, what’s changed, and what is working well: all questions that are important to continue asking throughout a successful transition process. How do they measure their success? They continue to have Sunday dinner together and spend holidays as a family—oh, and the business is thriving.
More than ten years ago, Matt and Keva made the decision (on their own) to work in the family business. Soon after, they made the decision to stay. “Building pride and finding passion were two things that had to happen before making the commitment,” says Keva. “If I didn’t find joy in the people, process and challenges of the business, I might have found a different path.”
In 2010, the transition seed was planted and began to sprout with the help of Lise Stewart, the founder of the Galliard Group Network of Family Business Advisors. The Sonderen family hired her to begin the process. “It’s overwhelming to even think about where to begin,” says Mark Sonderen. “We knew that we would have the most success if we hired someone who had extensive experience and could provide a clear roadmap for my exit strategy. Providing clarity to the roles of the next generation and current management was also important, but preserving the family was the most critical piece in our eyes.” Over the last year Sonderen Packaging worked with Rumpeltes & Lawton on this transition roadmap. They are respected local businessmen who, after retirement, found a passion for helping family businesses transition successfully.
Over the last six years or so, the Sonderen family claims to have learned a few things about transition. “If you are going to keep the business family owned and operated, the next generation must first demonstrate a high level of competency as well as moral values and ethics. If these two characteristics are absent, selling or finding an outside CEO to run the business might be the best option. Hiring someone to help determine this is critical,” Matt Sonderen admits. Here are a few tips the Sonderens have found were helpful in their process.
Hire Someone to Help Create an Exit Plan. Find someone with experience, that you trust and feel comfortable with. This is one of the best investments you can make for your future and the future of your business. There are two things the current generation needs to be confident in: 1) that the business is not going to fail if they leave, and 2) that they are going to be taken care of financially if they leave. It is important for this person to look at “retirement” as the second half of life and plan for it as such.
Knowledge Transfer. The next generation should be respectfully persistent when requesting inclusion in meetings with upper management and outside advisors that involve the direction and operation of the business on a high level. The senior generation must be open to having the next generation in these meetings when covering topics such as finances, personnel challenges, understanding the competitive landscape, culture, suppliers, and company purchases. The knowledge gained from transparency is critical as well as the support of the current employees to aide in transferring that knowledge.
Determining Ownership and Compensation. “In our case, Matt and I decided to split the ownership 50/50 as we are both contributing equally to the business. We also settled on the title of co-presidents for a few reasons. There was no clear leader. We both bring complementary strengths to the company and have different but effective leadership styles. Several years ago, we listened to Betsy Cowles speak about the partnership she has with her brother Stacey (Cowles Company). She said something that has stuck with us and that we also believe,” says Keva Sonderen. “If we can’t agree on a decision, then perhaps it’s not the right decision and we need more information in order to make it.” Keva adds, “We feel that we are going to be most successful leading as a team with our upper management folks aiding in the decision making. A tricky subject is that of wages. In our case we determined that we would be compensated equally. We felt that equality was critical to alleviating any bitter feelings that might arise from a sibling receiving a lessor wage-thus supporting our ‘family first’ business mentality.”
Sonderen Packaging was founded in 1963 by Al and Mary Sonderen. They have a 130,000 sf of state-of-the art manufacturing facility in Spokane and a 10,000 sf warehouse and office in Puyallup. Sonderen manufactures paperboard packaging for more than 250 national and local customers and employs 141 people.
Keva Sonderen is Co-President of Sonderen Packaging in North Spokane. She can be reached at 509-487-1632.