ILMA Compoundings - May 2019 - 36

"Schaeffer has always worked hard to
develop its leaders. Tom is 76 and has
worked in every department since he was
13; I'm 67 and worked in sales and
management since I was 24."
Jay Schaeffer Shields, president and CEO,
Schaeffer Manufacturing Co.
the belief is that all will go off on their
own and perhaps find their way back to
the family business someday.
Although the elder Julian has retired
to Florida, during the summer he
returns and is involved with some special projects. "To this day, we share an
office," Greg said. "We've been able to
do this the right way, and the business
is strong because of it."

SIX GENERATIONS
OF SUCCESSION

Schaeffer Manufacturing Co., based
in St. Louis, is a sixth-generation
family-owned and -operated business,
originally founded in 1839 by Nicholas
Schaeffer. The company's current chairman, Tom Schaeffer Herrmann, has
been with Schaeffer since 1967, and Jay
Schaeffer Shields, president and CEO,
has been with Schaeffer since 1976.
"Tom and I run the business like a
partnership, and succession planning
has been really important for our company," Jay said. "Schaeffer has always
worked hard to develop its leaders.
Tom is 76 and has worked in every
department since he was 13; I'm 67
and worked in sales and management
since I was 24. In 2005, I became
president, and last year, CEO."
The company had some unexpected
things happen along the way. Three
of Jay's uncles passed away within an
18-month period, so Jay's father and
aunt set up a plan for Tom and Jay

36

MAY 2019

| COMPOUNDINGS | ILMA.ORG

to one day take over and preserve the
company for future generations of
Schaeffers. They brought in a friend of
the family with management experience to fill the gap while the two gained
the experience necessary to take over.
They put the majority of company
stock in an irrevocable trust so the
company would stay in the family
and not be sold "This was to prevent
family discord, which destroys many
family businesses, as well as protect
the sales force, who were the ones who
built the business," Jay said.
Family succession is not always easy,
and Jay admits that both he and Tom
struggled with it at times. One of the
big challenges is making sure people
know it's not guaranteed that the next
family member in line is the next
leader up in certain departments. "You
have to do what's best in the firm," he
said. "We invest in our future leaders
and send them back to school to get
their MBAs and sign them up for
leadership training." And those leaders
aren't always family members.
"My advice would be to talk to your
leadership team about succession planning so everyone knows what's really
going on and what the plan is," Jay
said. "Tom and I have been discussing
succession for some time now. What
happens if something happens to one
of us? We don't have an identified
leader in place now. No one likes to
think about their own mortality, and

it's easy to push that off, and that happens with a lot of family businesses."
As a way to combat any unforeseen
events, Schaeffer Manufacturing Co.
recently hired a non-family member as
its new president, bringing in industry veteran Larry Hofstetter, though
whether it's to bridge the gap to the
next generation or to lead for the longterm is still unknown. The next family
members are still rather young, and
it's unsure if they will come into the
business in the next five years.
"Both Tom and I are healthy and
strong and want to be here while we
transition and participate in seeing it
happen in the right way, according to
company culture," Jay said. "You have
to look at it through the lens of how are
you going to preserve the future for the
family, and the best way to do that for
us was to bring in someone."
So, whether its a son, daughter,
nephew, niece or somebody from
outside the family that you trust,
planning for the future is an essential
business function. Evaluate your company's situation and be as prepared as
possible for the future. Because despite
the difficulties of determining the next
steps, the ultimate goal of succession
planning is, well, success.
Loria is an award-winning journalist who has
been writing for major newspapers and magazines for close to 20 years, on topics as diverse
as sports, business and technology. He can be
reached at www.keithloria.contently.com.


http://www.keithloria.contently.com http://www.ILMA.ORG

ILMA Compoundings - May 2019

Table of Contents for the Digital Edition of ILMA Compoundings - May 2019

LETTER FROM THE CEO
INSIDE ILMA
WHAT’S COMING UP
INDUSTRY RUNDOWN
TRADE ISSUES, TARIFFS CREATE CONCERNS FOR MANUFACTURERS
EMBRACING THE RAINBOW
THE FATE OF THE FAMILY TREE
BUSINESS HUB
COUNSEL COMPOUND
WASHINGTON LANDSCAPE
IN NETWORK
ILMA Compoundings - May 2019 - Cover1
ILMA Compoundings - May 2019 - Cover2
ILMA Compoundings - May 2019 - 1
ILMA Compoundings - May 2019 - 2
ILMA Compoundings - May 2019 - LETTER FROM THE CEO
ILMA Compoundings - May 2019 - INSIDE ILMA
ILMA Compoundings - May 2019 - 5
ILMA Compoundings - May 2019 - 6
ILMA Compoundings - May 2019 - 7
ILMA Compoundings - May 2019 - 8
ILMA Compoundings - May 2019 - 9
ILMA Compoundings - May 2019 - WHAT’S COMING UP
ILMA Compoundings - May 2019 - 11
ILMA Compoundings - May 2019 - INDUSTRY RUNDOWN
ILMA Compoundings - May 2019 - 13
ILMA Compoundings - May 2019 - 14
ILMA Compoundings - May 2019 - 15
ILMA Compoundings - May 2019 - 16
ILMA Compoundings - May 2019 - 17
ILMA Compoundings - May 2019 - 18
ILMA Compoundings - May 2019 - 19
ILMA Compoundings - May 2019 - 20
ILMA Compoundings - May 2019 - 21
ILMA Compoundings - May 2019 - TRADE ISSUES, TARIFFS CREATE CONCERNS FOR MANUFACTURERS
ILMA Compoundings - May 2019 - 23
ILMA Compoundings - May 2019 - 24
ILMA Compoundings - May 2019 - 25
ILMA Compoundings - May 2019 - 26
ILMA Compoundings - May 2019 - 27
ILMA Compoundings - May 2019 - EMBRACING THE RAINBOW
ILMA Compoundings - May 2019 - 29
ILMA Compoundings - May 2019 - 30
ILMA Compoundings - May 2019 - 31
ILMA Compoundings - May 2019 - 32
ILMA Compoundings - May 2019 - 33
ILMA Compoundings - May 2019 - THE FATE OF THE FAMILY TREE
ILMA Compoundings - May 2019 - 35
ILMA Compoundings - May 2019 - 36
ILMA Compoundings - May 2019 - 37
ILMA Compoundings - May 2019 - BUSINESS HUB
ILMA Compoundings - May 2019 - 39
ILMA Compoundings - May 2019 - COUNSEL COMPOUND
ILMA Compoundings - May 2019 - 41
ILMA Compoundings - May 2019 - 42
ILMA Compoundings - May 2019 - 43
ILMA Compoundings - May 2019 - WASHINGTON LANDSCAPE
ILMA Compoundings - May 2019 - 45
ILMA Compoundings - May 2019 - IN NETWORK
ILMA Compoundings - May 2019 - 47
ILMA Compoundings - May 2019 - 48
ILMA Compoundings - May 2019 - 49
ILMA Compoundings - May 2019 - 50
ILMA Compoundings - May 2019 - 51
ILMA Compoundings - May 2019 - 52
ILMA Compoundings - May 2019 - Cover3
ILMA Compoundings - May 2019 - Cover4
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