On May 18, 2000, I will take over as president of L.D. Davis Industries. At 36, I will represent the third generation of Davises to lead the company. I am confident and ready, largely because I have undergone both informal and formal mentoring with four senior nonfamily executives who have professionally managed the firm for years. The process has been educational, dynamic, imprecise, frustrating, but necessary and rewarding.
If you may be taking over your family’s firm, don’t wait for a parent or board member to set up a mentoring program for you. Take it upon yourself. The responsibility of being ready to lead lies with you. Begin as soon as possible, in the least formal way, learning at the feet of your company’s best managers. Then engage in short formal discussions, just before you do take charge. That’s how I structured my own mentoring program. And it has worked beautifully, so far.
Grow as you go
L.D. Davis Industries began in my young grandfather’s basement in Philadelphia in 1926. He invented and patented a product called “Speedsheet,” a sandblasting stenciling device for the cemetery monument industry. One of the raw materials he made for the process was animal protein glue.
Over time the glue became the cornerstone of the business, sold largely to box makers. But by the late 1950s it was difficult to obtain raw hides to manufacture animal glue. It was easier and cheaper to get raw glue “offshore,” so in 1959 my grandfather, L.D. Davis, closed his hide-processing operation and became an adhesive compounder, purchasing offshore glue.
My father, Louis D. Davis Jr., joined the business in 1961 after college and ran the manufacturing, sales, raw material, and purchasing departments through 1977, while the company’s core customers changed to the graphic arts industry. My grandfather died suddenly in 1977 and my great-uncle, who had been secretary and treasurer for 44 years, had died just the year before. My father was left to run the business with no management. The first few years were daunting.
The company grew by supplying the bookbinding industry, but my father badly needed help. He did not have the same “do-it-all-myself” attitude my grandfather had, and brought in professional management in the mid-1980s. He hired a national sales manager, and then a vice president of technical development. He also brought in a COO who took over operational duties that were not my father’s strengths, and a CFO to work with the banks and manage our daily cash flow. My father has never been afraid to hire good people. He has not micromanaged, always letting the executives do their jobs.
Today, L.D. Davis Industries is a $16 million company in Huntingdon Valley, Pennsylvania. As the largest supplier of protein adhesives to casebound bookmakers, catalog and directory manufacturers, and game makers, we are a very big fish in a very small pond.
I worked summers in the business during high school and college. After graduation I worked elsewhere for three years, worked for L.D. Davis for a year, then at my father’s urging took two years off and earned an MBA. I returned full time in 1991.
I have had many different “line” responsibilities over the past nine years, and that has been an important part of my education and growth within the company. My father will be 66 on May 18, 2000. He will have logged almost 40 years in the business, the last 23 as president. He knows it is time for him to step down.
My father and I have had a very good relationship in life and business. That, above all things, has made the gradual transition to my leadership easier. We have mutual trust and respect. I am honored to have the opportunity to guide our family business, and I think he feels he has the best person for the job.
Moreover, my father never imposed on me a blueprint for how my succession should unfold. He and I and the lawyers did spend many hours and thousands of dollars to transfer business stock and set up ownership. But as far as what should be done organizationally and functionally, he has left the design to me—with advice when I ask for it.
When my father told me several years ago about his desire to eventually step down, I felt a sudden pressure to formulate a transition plan. I knew a poor effort might damage my future leadership of the company. I also knew mentoring was the way to go.
From the time I was a small boy, my father had mentored me in life, sports, and our business. The process had always been rewarding and, I think, successful for both of us. When I started working at L.D. Davis full time in 1991, I began similar but informal processes with our four main nonfamily executives. In the last six months before my taking over, I have held a series of formal discussions with them.
Two of our senior managers are in their late 40s and two in their mid-50s. They have different aspirations, but they all want to retire with us. One of the key elements in the mentoring process has been my attempt to honor what these managers have done for my father and the company. Our business has succeeded under them, and I do not want them to think this young guy with the MBA is going to tell them how to run the company.
Nevertheless, I have also made it clear that a 36-year-old and a 66-year-old will not manage in the same manner. My strengths and desires are different from my father’s. The managers are accepting me, and accepting the change. We see ourselves as a team.
Sell with the v.p. of sales
During my first full-time years, I worked primarily for the vice president of sales, Ken Moye. He was my immediate boss. I learned many aspects of sales and marketing from him on the job. He gave me the opportunity to make decisions, and kept me informed as to why he did what he did. Through constant communication, he instilled in me the underlying framework of skills necessary to evaluate salesmanship and marketing talent for our industry.
In the beginning, our standard operating procedure was to make sales calls together. We would discuss ahead of time what we wanted to get out of these meetings. Once inside, I would listen and watch the sales call develop. After we were through we would take 10 or 15 minutes, usually in the car, to discuss what had happened. Had we achieved our results? Why or why not? What would we need to do next time?
After three months, I gradually began to lead specific parts of the sales call. As time progressed, I would lead more of the discussion, until Ken became the silent observer and I ran the meeting. Again, after every meeting we would review what had happened. This approach was very beneficial for me. It gave me an opportunity to see our v.p. of sales in action, to learn from a professional with a track record in our industry. I got an up-close look at what worked and what didn’t, and had a chance to analyze why.
I used this same approach with new salesmen during my own tenure as a regional sales manager. I received a great deal of positive feedback from the people I trained. The process gave them the opportunity to gain confidence in our company and in me. It also provided an opportunity for them to work slowly into their job and learn our corporate culture from me. The “do and review” process also provided the structure and dialog to keep the salesmen focused and directed.
Teach with the v.p. of tech services
Being in sales also created the opportunity to work with our vice president of technical services, Sal Polvere. When making sales calls, we would sometimes bring a technical person to resolve more complex issues. Over several years I learned the business of technical problem solving. Although I am by no means an expert in the rheology of polymer, thermoplastic, or protein adhesives, I have a deeper understanding of that aspect of our business and of the importance of good lab and field chemists and technicians.
One service we provide to our customers is our adhesive seminars, which we hold at customers’ facilities to introduce new products or educate customers at their request. We discuss specific substrates, adhesives, equipment, and applications used at their facility. Sal is a master of the seminar, and getting to watch and eventually interact with him during the seminars was instrumental to my learning.
As with our v.p. of sales, I began as the consummate observer. With time, I started to present more of the seminar. Eventually I was able to give most of the presentation myself, with the exception of some very technical chemical matters that I would defer to Sal.
This process taught me to be prepared, as well as not be afraid to tell people “I don’t know.” The few times I tried to wing it on technical questions I invariably got into trouble. Sal had to come to my rescue. I felt more embarrassed about the faux pas than about not knowing the answer. Also, on a few occasions I heard Sal himself admit that he didn’t know the answer to a question, but that he would get right back to the customer—and he did. This taught me that customers would rather have the right answer than a fast answer.
Consult with the cash flow king
As I transitioned out of the field and into the office, I took it upon myself to talk regularly with our chief financial officer, Michael Free. We would usually meet, in his office or mine, when there was a financial issue I wanted to learn more about. He never saw this as an imposition, but as an opportunity to teach me. In our business, as in any other, “cash flow is king.” I wanted to know how we managed our money. This was probably my easiest mentorship because the subject matter was black and red. Michael and I would discuss the important aspects of cash, balance sheet items, profits and loss, and so on. He would explain what items he felt were important to monitor each day, week, month, quarter, and year.
Once I understood our financial strategies, we put together a daily schedule we call the “cash balance worksheet.” It is a one-page list of the financial information I should review each day, which gives me a complete picture of what happened the day before. I usually have the worksheet by 9 a.m.
The worksheet includes items such as cash on hand, open balance, daily bank deposits, bank transactions, accounts payable, and future monetary obligations. I also review a list of all checks processed, plus daily sales. As anomalies come up we analyze them.
This has been a very good system. We add and subtract items as we see fit. The worksheet is a quick, simple way for me to review our financial position. It has also given me a good foundation for dialog with our CFO, especially in determining future requirements and possible problems regarding financing.
Analyze with the COO
The last but perhaps most important informal mentorship I had was with our COO, Norb Kroeger. He has really been our de facto president for the last seven or eight years. Some of the duties I now perform, and will perform, are a function of the framework he has developed over the past decade. Again, my relationship began slowly, chiefly in the role of observer. I would attend contract negotiations, industry association gatherings, and other formal meetings as his aide-de-camp. We would discuss our focus for an upcoming meeting, and afterward analyze what had taken place. I cannot stress how important this practice is—to the company, and to my learning.
The first negotiation I went to concerned our ability to “private label” a niche adhesive for a large competitor. Our game plan was to explain that we could do this work without encroaching on each other’s core business. But the meeting did not go as planned. Their business unit manager was against the idea. He made the meeting very difficult. Norb, unflustered, and as nonconfrontationally as possible, asked the manager why he believed this relationship would not work. At one particularly heated moment Norb asked to take a break so we could discuss a matter in private.
Outside, Norb told me he felt the negotiation had reached an impasse, and that a short break “for us” would actually give their side some time to work on the reluctant manager. Norb could see that the manager had a specious argument, and was just troubled because he was going to lose some responsibility and power in his small unit.
After the break the atmosphere became more amiable. We ended up reaching a deal. This experience underscored the point that it is imperative to know your business. We knew the deal was a good one. We just had to get them over the emotional aspects of the situation.
As I had with our other senior staff members, I became more involved in various negotiations and began managing and then leading some of the meetings.
Get formal in the final months
The recurrent process I underwent with our four nonfamily executives constituted my informal mentoring. We still use this approach today, but instead of focusing on my performance we usually discuss what happened, why, and where we go next.
This informal mentoring took place during the first six to seven years of my tenure. But I decided I had to shift to a more formal structure in the final six months before I would take over. I felt that the give-and-take of proper one-on-one meetings would help us gain perspective on each other’s desires. I see myself as the steward of this business. One of my primary aims is to turn it over to the fourth generation. I wanted to discover if anyone might oppose this process or me later. I set up a two-hour session every month for the six months.
In the initial meetings I just asked simple, open-ended questions about each person’s aspirations within L.D. Davis, their hopes for L.D. Davis, what they liked and didn’t like about their jobs, threats, opportunities, and so on. I tried to cover as many issues as possible, and to uncover any latent situations that might pose a problem in the future.
I also asked each executive to put himself in my place: What would he want to know as president? What skills and responsibilities would be vital to his success? I made it clear that I did not want, nor would I be able, to be the best v.p. of sales or technical services, or CFO or COO. However, I needed to know what elements were necessary for being the best in each of these positions; if I did, I could help our senior executives stay motivated and grow with the business.
I brought the process along slowly. I did not push my strategic objectives during the first few sessions. I tried to listen. I took their thoughts, ideas, expressions, and body language and gauged my responses to where I felt they were going. Although I had a specific agenda, I was not so rigid as to try to force it. I knew this would be a dynamic process.
As time went on I was able to lay out my strategic objectives a little at a time. The senior managers were glad to get this high level of input into their future, my future, and the company’s future. I think they felt honored that I wanted them to be part of the process of my taking over.
The only piece I felt I was missing for me was an outside mentor—a person who could help me avoid groupthink or help me think “outside the box.” There were some questions and situations I felt could not be addressed objectively by anyone inside the firm. Therefore, I joined The Executive Committee, an organization of CEOs, to get business perspective from peers. I also consulted a family business adviser to get perspective on unique family business issues.
I discussed how my one-on-one executive meetings were going with my adviser, Henry Landes, who runs the Delaware Valley Family Business Center in nearby Sellersville, Pennsylvania. He made me even more aware of how important it was to communicate with the executives as much as possible, leading up to and after the transition. I know that managing older subordinates can be tricky, especially since I was formerly the subordinate to some of them. My rise to leadership will be an ongoing process. I will continue to learn from my executives, but they will also begin to take my lead. They are starting to share and embrace my strategic objectives for L.D. Davis.
The tables between myself and my mentors have begun to turn, as they must. I have gradually informed them about the business strategy and structure I want to implement, and how they might help me do it. The real change is that we are evolving into a leadership team. These fine executives will lead the company in its craft and operations. I will lead in strategy and, soon enough, corporate leadership.
It is also my job to form and champion our corporate culture. I want our company to continue to host an environment that honors the past but welcomes the future. If we can do this, we will be better, smarter, and quicker for the new millennium. We have succeeded thus far because we work hard, keep communicating, are willing to change, and are passionate about what we do. I look forward to the next few decades of business at L.D. Davis, and I think my mentors feel the same.
Tripp Davis is president-elect of L.D. Davis Industries in Huntingdon Valley, PA. He will take over in May 2000 (tdavis@lddavis.com).
The wisdom to stay away
One big reason the final, formal stage of my mentoring has succeeded is that my father has not tried to introduce himself into the mix of mentoring going on between me and our four senior managers. My single greatest fear was that on May 18, 2000, the day I am to take over, it would be “business as usual” at L.D. Davis. I knew I could not operate if I was named president but didn’t have the true authority, respect, or responsibility of the job. My father and I talked a great deal about this, and he suggested he stay away. As he said to me, “You are either the boss or you aren’t. There is no middle ground.”
Come May, if he did try to reassert himself, the harm would be irreparable. Any notion that I am not the true leader would undercut my ability to manage the business effectively. I have even asked my father to take time off from May 18 to June 18. This will remove any possible distractions during the first four weeks of my tenure. He has graciously agreed.
—T.D.