Navigating the challenges of family business succession

By Jesse Sanchez. 

Understand the complexities of passing the torch to the next generation. 

In this episode of MetalCast, host Heidi J. Ellsworth and guest Robert “Bobby” Mesmer, CEO of RMG Erectors & Constructors, discuss the intricate world of family business succession. While many dream of passing their business to their children, Bobby offers a cautionary tale, stressing the importance of preparedness and capability over familial ties. 

“When you start a business, one of my most favorite sayings that I tell everybody is, especially when I hire people, you are an extension of me,” Bobby says, expressing the importance of understanding every aspect of the business. He states that family members, often seen as natural successors, must work from the ground up to truly grasp the business’s operations. “You have to build the respect of the people. You have people that have been with this company for 20 years, and you think that as a thirty-year-old... you’re going to step in over here and know more than the people who have been here helping it out for 20 years?” 

Bobby warns against the common pitfall of assuming that family members are automatically suited to take over. “It’s the wrong attitude to have... too many people are like, ‘Well, my kids, my kids.’ Look, love your kids, but this is business, this isn’t family.” For him, a triumphant succession plan hinges on the successor's ability to earn respect and understand the business deeply. 

This candid conversation explores the broader implications of succession on the entire workforce. Bobby argues that handing over a business to someone ill-prepared can jeopardize not just the company’s future but also the livelihoods of its employees. “If you have 1,000 employees, you are responsible for 4,000 people,” he says, accentuating the ripple effect that a poorly executed succession can have. Therefore, starting successors from the ground up will not only reinforce the sense of responsibility to the business and its employees, but also ensure that they know how the business operates on every level. 

Read the transcript, Listen to the podcast or Watch the webinar to learn more about the challenges of business succession.