Ep181: Family Business Best Practice - Caster Concepts

David talks to Bill Dobbins about his many companies, all operating around Caster Concepts in Albion, Michigan. They talk about how he is thinking and working on next generation transition and how he is using the main business to support smaller ones that meet is conscious capitalism approach.

Transcript

Well, welcome, bill. I appreciate you joining us today. Thank you, David. I'm looking forward to having a conversation today about family businesses, and maybe I have some insight. I certainly have family businesses, and I'm excited to at least share my experiences. We can argue whether it's best practice or not so well. You know, best practice for one is terrible practice for somebody else, but so so start us off. You mentioned you've got family businesses. Start us off by painting a picture of your family business that the different industries potentially in the generations. Yeah, you know, I'll just preempt that by saying, for the people that are out there listening, that David and I have had a relationship for probably almost 20 years now, I hate to think I'd spend 20 years we look so young, but you know, I've always valued David's coaching, mentoring, leadership, direction. David's been very involved in not only my family businesses, coaching my direct reports and myself. And so it's a privilege to be here and have a little chat reflecting back on 20 years of mistakes. Frankly, all of those I have corrected along the way at your coaching. So not really. I have plenty of them that I'm still making. But you know, back to family business side, we do have multiple family business for, I guess, for a multitude of different reasons. The main business is caster concepts, which is a business that my father and I started about 38 years ago. We manufacture heavy duty industrial casters. We had some outside people in it. But over the years, through buying people out, retirements and that sort of thing. It's, it's a solely owned business by the Dobbins family. In conjunction with that, there's six other manufacturing businesses that that are closely tied to Castor concepts and are great suppliers. But also have you know their own expertise and their own book of business also. And then we go out a little further. And, you know, again, not going down the wrong path, but I'm a firm believer in capitalism. And you and I can, you know, we've had that discussion about capitalism, but, you know, I like to think about Conscious Capitalism and and, and what do we do, you know, with the profits that are generated, and so part of our other businesses is, is active involvement in our community and starting businesses in a challenging downtown area in the, you know, the rust belt of Michigan, frankly, that's been ravaged by loss of jobs and deteriorating downtowns and and, frankly, deteriorating attitudes about the community and and so we have a whole group of downtown businesses, from a bakery to a gift shop to a cigar lounge to a gaming center to a downtown grocery that we all consider as part of our or our family businesses. So what do you which one do you want to talk about? I think I tried to count them once, and got to 23 before I finished, and I'm told, but so, so really, then there's this manufacturing group, which all is surrounded and goes to support caster work to a great extent. And then the conscious capitalism stuff, which is the Downtown Development pieces, which I'll make the point that we always agree on the conscious capitalism side of thing. But you're right. We have Yeah. And so then tell us about the family that's involved in that. You said you started the manufacturing business with your dad. I started with my dad, and actually my older brother also. And then again, was fortunate that, you know, as he got older, gave me the opportunity to acquire that my brother was not actively involved. And so we, we bought him out. And so at some at that point, then, you know, it was sort of my, my responsibility either be successful or fail. And I, I left my previous job when I had control of the business to come and, you know, work at caster concepts on a full time basis. And that was in 2003 so a little bit over 20 years ago, I made a career change. And, you know, and then eventually, you know, my son, who was off doing another profession, decided, hey, you know. Yeah, I know I always wanted to get away from home, but now I'm thinking that maybe I want to come back home. And so very fortunate to have Andrew come back and be a key part of the business. He's now vice president of manufacturing, and frankly, he does all the work, and I do very little work these days, but I do a lot of thinking, and so sometimes that's the hardest work. So that's generation three is now in the cast of business, yep. And just, you know, you've already opened up the door to the complexities of your other businesses. How's the broader family? Because there's more family than just Yep. So in the community of businesses. I have two daughters and and one son in law who are actively involved and and those businesses are we run three nonprofits, which is my daughter, Caroline, and then we run downtown gift shops and bakeries and that are owned and operated by Emily, my oldest daughter, my second child, and then my son in law, who runs our real estate business and the downtown grocery store, along with my Andrews wife, who assists at the grocery store also so. And then my other son in law runs the cigarlon. So, you know, you know. And I just because we have all those doesn't mean that's smart. And so I don't, I don't want anybody assume that that's some sort of smart business model. It's, and it, you know, I think, like a lot of businesses, and I'll include family businesses, is it's driven by a passion, and that's where, you know, we do agree about conscious capitalism, and you know the passion that's behind this work. And I've been fortunate that my kids sort of caught the bug from my wife and I, yeah, I better not forget my wife, who's very active at the bakery. And so, you know, I It's amazing what purpose and purpose statements and associated passion when people connect to that. So, you know, we try to tell, not tell, but instruct or educate. I guess. You know, at all levels of this business, for employees, is that this isn't just a job to sort of make casters, not a job about making donuts. You know, we're really, we're really trying to rebuild a community. And so, you know, that's how these businesses connected with our purpose and, in turn, our passion to make an impact, frankly. And you know, you can take all the small businesses, you could claim, they're all nonprofits. They all take a certain amount of they certainly take time and they take resources. So you know that that how this kind of convoluted sort of thing works. But at the end of the day, castor concepts is what keeps a log on the fire for all the smaller businesses. And so, you know, I'm fortunate to have a, you know, I'll say, a well run, well operated business led by Andrew and Doug bachinger, our Vice President of Sales, both who have been coached and mentored by David, you know, I don't want to say, carry on the legacy, because I, you know, I don't know. I don't necessarily like legacy sorts of things. I want them to build their own legacy. I want them to feel the responsibility of a family owned business that's providing opportunity to 140 or 50 employees, who all have two or three or four or five people that they're providing for. And so you know that that's really the responsibility. My dad told me early on, your number one responsibility is to make sure everybody in this organization has a paycheck. That's the number one responsibility. And and these days, they have a paycheck, and it has to cover all the things that they need in an inflationary time, in challenging times, in pandemics, and, you know, whatever maybe, that we've been through recently. So So I, you know, I congratulate my family. I'm proud of my family for the sincerity that they've put towards this. They don't see it just as a job. They they're all secondary and beyond master degree educated young people that could get an edging. They can get a job almost anywhere, I'll say, and they choose to come back to Albion, come to our community. And be part of the family business. So, you know, all those things are important to my wife and I, Karen. They're important to the community. And from a family standpoint, we're we're able to juggle it and and nobody hates anybody else, and nobody's necessarily trying to get a heads up on the next person, and who knows what will happen once we're gone. So, you know, we talked about best practices as we sort of prepped for this David. And, you know, I sort of struggle with best practices because I, you know, I don't for a minute think that there's that we're doing things the the best way, or that we couldn't get better. But two things come to mind. Every one of my kids went and had a job somewhere else before they decided to come back. And I, and I think that's a big deal. They we didn't pressure them. We always told them, there's an opportunity here. But they all went. They worked at other places. They worked for different people, they worked in a variety of different businesses. Before they returned and found a passion for what my wife and I were working on, and I think that's a big deal. This is something that I sort of picked up through tech and Vistage, which is a mentoring group that I was part of for 20 years, and that's that my wife and I are totally transparent with our children, as far as estate planning, about how the businesses work, about where the money goes, about who gets paid what, and where they get paid from. And every every year we have a family meeting. We have a build up to that, where we meet with attorneys, accountants and financial planners. We subsequently take all the information from that and and share it openly with our kids, and even this year we we opened it up to my 18 year old grandson who's graduated from high school. That, to me, has been extremely valuable, is transparency and openness with everybody. They hear the same message from my wife and I, and you know, so it it's people aren't left to for an interpretation. I think it's been extremely valuable. So there's a couple, again, call them best practices, or, you know, something that we've found to be helpful for us. David, I appreciate sharing that and the transparency and sharing, and if my questions get uncomfortable, just let me know, and I'll stop pulling in that thread. But I like the dynamic that you set that you've got. If we just take the three kids, Andrew, running all the manufacturing, which is the big moneymaker, Caroline running the nonprofits, and Emily, running some of the small enterprise stuff, other practices that you know, even though they can see how much everybody earns, are the things that you have in place to make sure that feels fair and good and right to everybody. Well, you know, my I don't know. I'll answer it, but maybe I won't answer it, you know, I'll at least explain my perception of it, and that's my concern is always, what is the appearance to my employees, whether they're at the manufacturing, whether they're at the bakery, whether they're at the mercantile or whatever, if, if my employees feel like they're getting, let's say, preferential treatment for performance, you name it, then I think that's bad. So you know, I think from a business standpoint, even though we're family, everybody's held accountable at at a relatively high level, and not relatively at a high level, to perform and do their job that they're reimbursed for. And, you know, so I, I think that's an important part, is that if the perception of employees is that, you know, don't touch him. You know, he's part of the family, don't, you know? You know, I think that undermines the culture that you're trying to build in these businesses. And so whether it's in the manufacturing business, and this summer, I'll have my grandson out here, you know, doing. Do you work? Just like a lot of people that have to work here, you know, it's, it's sort of an unspoken or an unwritten message that, guess we all have to do it, sort of thing, you know, if, if, if Owen is using a broom at the end of the day, I guess cleaning up is important here, so to speak. So I don't know if that answers your question exactly, but our interactions, or my role with them within these businesses well, and you kind of get to one of the threads that I've been enjoying pulling in these family business conversations, which is the ownership versus leadership. And, you know, there's that leadership expectation of a Dobbins, and then there's the ownership and and, you know, what's, how do you balance those two things out? Yeah, yeah. You know I, as you've coached and taught me, mentored me. You know the power of servant leadership is, you know, incredible. And you know, again, I think the employees have to sense that you know is that you know we lead by serving the employees. You know that that could be from a compensation standpoint. It can be just from, you know, we're, we're, we're firm believers in CFRs, conversation, feedback, recognition. Recognition is a big deal. It's something I don't do well a lot of times. You know, I can always do better. And, you know, so, so those are key parts of of that leadership structure that's in place. Same thing. Do we do it perfect? No, but we don't stop trying. And, you know, I, I'm really proud of the culture that we've worked on and built over the last 10 years or so. We've, we've made a lot of progress, and, you know, and still a lot of things to do, though, and and I appreciate that, and so that you've got the what amounts to the third and fourth generation involved in in working what are some of the best practices that you're putting in place for them to to lead the organization or the organizations as it goes forward. Bill and I have had this conversation multiple times, there's going to come a time when you're no longer leading for one reason or another. That's for those that don't know Bill, he is an MD as well, so Maybe he knows something medically that I don't. But what's the succession planning best practices that you're putting in place? I love the transparency one, because that means that people aren't surprised by anything other setting up. Yeah, I this is the succession planning becomes sort of part of estate planning also, you know? So I don't think you can necessarily. They're separate things, obviously, but, you know, I we, I am. I've not done a great job on succession planning. We have lots of conversations. It's a very challenging thing. I'm I love what I do I and I love working in this business, and so those are really tough decisions for me to make. And, you know, I feel like I have a lot to give, but that's no excuse for not planning for the future. Frankly, you know, Andrew and I have had a lot of discussions about succession planning. And frankly, you know, again, back to the full transparency, our, you know, our, the two of us the right people to sort of take care of this business into the next 10 or 20 years and and, you know, he's, he's amazing to what he does, and it might not be best for the business that he takes the wheel, you know, and he and he understands that we've had that conversation, so I'm not, not discounting its value. I'm not it eventually will be up to him. And part of that was, is, you know, when it may not coincide when I want to step back. I, you know, i The example I always think about is Bill Ford and Ford Motor Company. And, you know, he was the heir apparent to step in and take over Ford Motor Company. And I, you know, I think he ran it for a couple years, and then said, hey. I'm not the guy to run this business and step back. And Alan Mulally took over at Ford and did an amazing job. And so, you know, for a guy at that level, and again, groomed unbelievably, to be in that role, to be willing to step back, you know, I think it's a lesson for all of us in these positions, no matter how big your business is, you know, and that's that's transparency, that's honesty, that's soul searching reflection. We have a responsibility not to, you know, 10s of 1000s of people at Ford Motor Company, but to our 150 employees, they expect us to make the right decision for the next, you know, 1020, 30 years. So, you know, it's, uh, it's a big deal in my world, it's a big deal well. And you know, having been half I'm halfway through the year now with these conversations, and some of the threads are the patterns that I'm seeing. One of them is how many people got their job because dad got sick and so that that sudden I missed job and thrust into it and and that wasn't that bridge. And then the other thing that's kind of interesting that goes with that is the concept of you can't be an owner if you're not working in the business. Which some interesting things that people have brought up and said that create different issues and different ripple effects and have different benefits. Are there any things like that that you see as you evolve casters into its team of businesses. No, you know, I that really, I think, I think the thing that I fall back on is, again, the transparency, you know that I think is, is going to be important as we make, you know, tougher decisions going forward. It, yeah, something could happen me tomorrow, and then there's a succession plan. You know, I that I'll share another best practice from my Vistage group, is that I, I do have what I call a contingency plan. So if, if I should suddenly be taken off of this earth, I have about a five page document that I've written. It's, it's been in play for over 15 years, and it's meant to guide my kids. If there's things that, you know, I didn't take care of over those 15 years, I've taken care of of several things I won't, not everything though, um, but it does address that. You know, what happens to the leadership of castor concepts of bill doesn't wake up tomorrow morning, and so is it perfect? No that, that contingency plan we also read at the family meeting. So I read through that entire document. We talk about it, we discuss it. My message to them is, this isn't, you know, this isn't a mandate. This is just suggestions, maybe, let's say, a road map that might help you to get through a mess that I've left you, you know, so to speak, and so, you know, I that's been extremely valuable also is, is they get a sense of, you know, we talk about communication, is the picture in my mind, the same picture that's in their mind. And I think the more I put that in writing, each one of those takes that document with them, so at some point they can pull it out of their drawer and look at it if something happens to dad, and it gives me a lot of comfort. I you know, maybe it doesn't comfort them at all, but, you know, I try to put myself in Andrew's position. We're very close, and if something happens to me, what's his mindset going to be, and what assistance does he need? And I have an advisory board, you know, so you know, they're aware of it if something happens. So is that the best way to handle succession planning? No, but until there's something in place, it fills a gap, and I think it fills a need that everybody feels. You know, that's a great exact that's the kind of thing I'm looking for. This is not the things are perfect, but here's something I've got in place that it's if, if I were to sit down and say, Okay, I just died. Here's what I'm want to tell you all. That's the document that you've written. And helps bridge that succession planning a little, yeah, yep, absolutely, you know. And my wife hasn't, all the kids have it, and so I always feel good. I before our family, many I take, you know, I don't know, whatever time, two, three hours, I read through it, I make edits that maybe we took care of that, but I haven't taken care of this. Or our businesses are changing them. You know, enough that, you know there's new problems coming along. You know, we haven't stopped creating problems yet. And so, you know those all are added in as edits. I always feel strongly though the last paragraph where I'm reflective about my relationship with my kids and how important they've been in my life, and how it's important that they decide what they're going to do with their life, that paragraph has never changed from the day I wrote it. It's applicable today as much as it was 15 years ago, and so, you know, I always feel good about that. It always brings tears to the family as we read through it. But it's, you know, it's when you get a chance to write something from the heart. It's important. That's cool. I appreciate you sharing that. So it's the bridge, and it's something that you reflect on. And I love the transparent nature of that. As you you move into that now, changing off the morbid subject for a second there, try and get something more, less, less. Bill's going to die at some point, because you said you had an advisory board you you bought the business from your dad and other partners. What makes you have an advisory board? And what's the makeup of your advisory board? Well, the makeup of people that I've been close with for years, that I have high respect for, that are, you know, are very skilled in in their their professions, and, you know, so why have one? You know, the I always think the biggest risk in small businesses is it's too easy to fall in love with your own ideas. And, you know, I think that's a huge risk for people in my position, and, and, and. So part of that is, you know, you have people around you who are willing to question your decisions, your directions, strategy plans, you know, all those sorts of things in a respectful way. It's, it's, it's not a, it's obviously not a public health company. They don't have any power outside of that. We have close relationships, and, you know, that's, you know, that's how they provide feedback. And there, we meet three times a year, but they're, you know, I probably communicate in one way or another easily, twice a month with the people that are on the board, right? And you know, as I know, humanity is not a family business, but we have an advisory board for similar reasons, smart people that we know will ask us the tough questions or tell us our babies ugly. Yeah, absolutely right. You know you don't always want to hear the feedback, but you're a lot better off getting the feedback and then you can sort of through it on your own, you know it, I tell people, that's one thing. Running your own business, your family business is you're betting with your own money every day, you know. And you know, that's, you know, you're betting with your family's money. And so you have to, you know, you have to be willing to, sort of, you know, pull back the curtain and get naked and decide, you know, am I really being honest with myself? So to speak. The other thing, and you and I have had some great conversations about that is in we both feel strongly about continuing education and reading and you know, and that's a part of my life. I know it's part of your life. I don't know how you survive in any of these businesses these days, for sure, if you're not wired to sort of continually educate yourself, you're just putting your business at risk if, if you're running it by just this, the way we've always done it, work for grandpa, work for dad. I think it'll work for me. You know a guy that I read a lot on a strategy sort of thing. It said, you know, if you're not tearing down and rebuilding your business on a regular basis, you're you're putting your business at risk. And then so, you know, I firmly believe that. And you know, I you don't tear it down just for the sake of tearing it down. You, you you do that. To stay with, you know, a competitive landscape. And to your point, best practices, whether they be in business or whether they be in family. So then, just to close, you've got 20 years of experience building a gazillion family businesses with your kids, and you took over the one from your dad. What's one kind of thing you wish, as you look back, your dad would have done to have supported it in transition from first generation to second generation?