The Tobin Brothers funeral directors have seen a lot of death - and they have tried to avoid the problems it can cause family companies.
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Entrepreneur: Des Tobin, Executive Chairman
Company: Tobin Brothers Funerals
Business type: Funeral services
Founded: 1934
Turnover: $10M - $50M
Head office: Malvern, Victoria
Contact details: +61 3 9576 0433
The Tobin Brothers Funerals Story
Family business advisers have a simple exercise for the owners of businesses. They get them to close their eyes and imagine being dead. As United States family business adviser Marto Vago says: "Once they come to terms with the fact they will die they can then start planning."
Des Tobin, a second-generation member of Tobin Brothers Funerals, has never been faced with this problem. He has always been involved with death and has seen first hand the chaos that comes from poor planning.
Tobin began planning the succession at 55. He admitted that he wanted a Tobin family member for the job. But, he says, if the right person could not be found within the family, the net would be cast wider.
A list was drawn up that included a description of the qualifications the successor needed: tertiary qualifications in a business-related area, leadership qualities, skills in human relations, motivation, and a lot of energy and enthusiasm.
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Key learning points:
- Plan - in writing - Develop a written plan at least 10 years before you plan to retire. Include criteria against which the next successor is chosen. Be prepared to appoint an outsider to the job if a family member does not fit the criteria.
- Expert advice - Consults with financial advisers, tax consultants, and even psychologists. Make sure you have non-executive directors on the board.
- Transition - Leave plenty of lead time for the development of the incoming successor, and mentor and support them as they grow into the job. Make sure there is an escape plan for both the successor and the company if things don’t work out.
- After succession - Makes sure there is a meaningful position for the outgoing patriarch or matriarch.
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The company also wanted someone who had the capacity to handle many issues at once, excellent communication skills, who was a team player, able to motivate others, could read the market, and had the ability to remain calm in times of crisis, according to Tobin.
Family members were then ruled out or ruled themselves out. In the end Martin Tobin, Des’s only son, was identified as the person who most fitted the required skill-set. Des says: “Luckily the decision was very well accepted by all family members.”
Martin, who was working for a city law firm, joined the company in 1993. His development plan, which included working in all parts of the company for ten years, was shared with all the staff.
As part of his business training, he was to do an MBA at the Australian College of Management. Tobin says: "These days experience needs to be underpinned by formal training."
The ten-year succession plan was halved once Martin proved that he could handle the job and in 1998 Des Tobin became executive chairman, appointing Martin as managing director. Des Tobin says: "People asked if I was sure Martin was ready and I said probably not. But when is ready and how long do you wait? Better to give someone a chance than have them waiting five years past the time they are ready."
As the transition occurred, Des Tobin took advice from professional advisers in accounting firms as well as the Family Business Association. He then told the extended Tobin family, clients, friends colleagues and businesses about the transition.
Once Martin was managing director, Des took the role of executive chairman and relocated to the Malvern offices where the funeral plan office had been relocated. Des says: "The successor should move out so that the transition is seen to have taken place."
Father Des and son Martin still confer daily and the business is continuing to grow. Des says: "I know the succession is successful because I can sit back, not interfere, don't feel I have been pushed out and am happy with the direction the company is taking."