By John Lofstock, Editor-in-Chief
Small- and family-owned businesses remain the backbone of the convenience store industry. Many chains have been successfully passed on from one generation to the next, but more and more, family executives these days seem to be expressing concern about passing the family business on to the next generation.
This trend is having a transformative effect on the convenience store industry. Smaller companies with next-generation leadership voids are selling out to larger operators who lack the connection with the communities they serve—and even their own employees—that family-owned c-stores have. All you have to do is look at the Alimentation Couche-Tard acquisition of CST Brands to understand how far big companies are moving away from the personal connections that were once an industry calling card.
CST Brands acquired several outstanding convenience store chains, most notably Nice N Easy and Flash Foods, who were both regarded as pillars of the community. Once leadership changed hands, it was never the same. Now, CST itself is turning over the reins to another giant retail operator. Any connection to the past will almost surely be lost in the shuffle.
One CST employee told me, “It’s gotten so crazy. I’m not sure what the plan is anymore. We used to be a valued part of the community, now I’m not even sure who’s signing the checks.”
Growth and profits are the primary goal for retail chains of all sizes. But the convenience store industry rose to prominence on the backs of the family-owned businesses. Exxon, Shell, BP, they all had their chances to run convenience stores. They couldn’t do it. Kwik Trip, RaceTrac, Kum & Go, QuikTrip, and too many others to list here, not only could do it, they built empires that the oil companies might envy.
So while CST Brands seems to be the headline every day, don’t forget the folks who built this industry and made CST possible. You don’t need to be in the headlines to be a retail powerhouse.
PLANNING FOR THE FUTURE
All this talk of acquisitions does bring up an extremely important issue—family business succession planning. One thing is certain: Most family business leaders don’t plan for it, they don’t do it well, or they wait until it’s too late. While the CEO longevity in non-family businesses is an average of six years, for family-owned businesses CEOs tend to stay for 20-25 years.
Longevity in leadership isn’t necessarily a bad thing, but it could be if it stifles the younger generation from spreading their wings. This very issue was one of the educational sessions at the recent National Advisory Group (NAG) Conference this month in Savannah, Ga.
For most family businesses, planning for succession is the toughest and most critical challenge they face. While bigger corporate entities have their sights set on family-owned chains—as much for their outstanding corporate culture as for their balance sheets—family businesses will remain an integral part of the convenience store industry for years to come. The goal of NAG and the Young Executives Organization (YEO) is to provide a platform to help family businesses continue to flourish.
Thoughtful, on-going planning for succession is a must for long-term business success and sustainability. Therefore, start now. Develop a clear plan about the succession of senior leader positions, including who will be next, when the transition will take place and how that successor will be groomed to make the move smoother. The more planning you do now, the better the future will be—for you and your family business.
Once you have a successor in mind, offer him additional development through such things as job rotations, stretch assignments, additional profit and loss responsibility, and additional exposure to board members and customers. The more emphasis you place on prepping the next leader, the smoother the transition will be.
But remember, planning is the key. The biggest risk you face is having the next generation run the family business into the ground. It happens all the time. Your reward will be significant for making the effort upfront to groom the right people for the job.