In this episode, Katy Wilder Schaaf talks balancing her role as vice chair of the board of directors for her family business, E. Ritter & Company, with her career as a licensed clinical psychologist.
She also talks about how the company utilized governance to reengage shareholders after a family rift. Then, Preston Root, fourth-generation steward of Root Glass Co., explains how a family constitution can bring your family together and help to pass its values down through the generations — provided it’s presented in a format with a bit more gravitas than a Word doc.
And Katy Kothmann Abraham, president of Construction Cost Management, discusses the unorthodox career path that led her to buy her father’s cost estimation company, as well as how she built confidence and credibility despite not having a traditional technical background.
This episode is brought to you by Deloitte Private: serving family-owned companies, family offices, and privately-held businesses, and advising them on addressing a range of issues, from growth, talent and succession to the potential and perils of AI.
Interested in being a guest or have a topic you’d like to hear us discuss? Contact host Zack Needles, editor-in-chief of Family Business Magazine, at: zneedles@familybusinessmagazine.com.
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Guests
Katy Wilder Schaaf
Katy Wilder Schaaf, Ph.D., works alongside her own family using governance to support the vision and values of E. Ritter & Company (ERC). ERC, founded in 1886, is a 5th generation portfolio company headquartered in Marked Tree, Ark. In her family, Katy has served as Director of Development and Engagement and Chair of the Family Council. Currently, she is the Vice Chair of the ERC Board of Directors and sits on the Ownership Council. As a family shareholder, she is part of an effort to develop a Capital Allocation Framework, a living document reflecting shareholder needs and guidance around risk, dividends, liquidity, and time horizon.
Preston Root
Preston Root has spent 31 years in family enterprise and is a fourth-generation steward of Root Glass Company. He worked for MRN Radio, “The Voice of NASCAR,” for 13 years before rejoining the family business in 2010. A natural communicator from a 30-year career in radio, he is a frequent contributor at family conferences.
Katy Kothmann Abraham
Katy Kothmann Abraham is the president and CEO of Construction Cost Management (CCM), which provides estimating and cost management services to architecture and engineering companies. With no training as an engineer but deep skills in leadership and management, she bought CCM from her father in 2012 and has increased sales by well over 600% since then.
Sponsored by
Here’s a summary of the podcast by interview, with key takeaways for each section:
1. Katy Kothmann Abraham (President, Construction Cost Management)
Summary:
Katy Kothmann Abraham discusses her unconventional career path, moving from retail buying to the oil and gas industry, and eventually to repping prescription dog food before taking over her father’s cost estimation company. She shares her initial doubts and challenges, including imposter syndrome and skepticism from colleagues, and how she leveraged her diverse professional experience to succeed as a business leader in a male-dominated industry.
Key Takeaways:
- Career Transitions: Diverse career paths can bring transferable skills that prove valuable in leadership roles.
- Imposter Syndrome: Overcoming self-doubt is key to building confidence and credibility in new environments.
- Adapting Leadership Styles: Katy’s “new sheriff in town” approach helped redefine the company culture and bring fresh perspectives.
2. Preston Root (Fourth-Generation Steward, Root Glass Company)
Summary:
Preston Root highlights his family business’s evolution from glass manufacturing (including the original Coca-Cola bottle) to commercial real estate. He emphasizes the importance of creating a family constitution to codify values, operations and governance, fostering unity among family members across multiple generations.
Key Takeaways:
- Family Constitution: A formal governance document can help ensure long-term alignment and legacy preservation in family businesses.
- Periodic Review: Revisiting and updating the family constitution keeps it relevant and engages younger generations.
- Symbolic Gravitas: The physical presentation of a constitution reinforces its importance as a shared family legacy.
3. Katy Wilder Schaaf (Vice President, Board of Directors, E. Ritter & Company)
Summary:
Katy Wilder Schaaf discusses balancing her roles as a licensed clinical psychologist and a family business leader. She focuses on engaging shareholders who are not directly involved in the business, emphasizing transparency, relationship-building and family governance as tools for fostering stronger connections.
Key Takeaways:
- Engaging Shareholders: Understanding motivations and creating governance structures can help reengage passive stakeholders.
- Work-Life Balance: It’s possible to integrate professional careers with responsibilities in family governance.
- Transparency: Open communication is essential to maintaining trust and alignment among family members.
Overall Themes:
- The Power of Governance: All three interviews highlight governance—whether personal leadership, company structure, or family constitutions—as a key to success and sustainability.
- Adapting to Change: Flexibility in careers, leadership, and family structures drives innovation and legacy preservation.
- Legacy and Engagement: Family businesses thrive when values are passed down and all stakeholders feel connected and involved.
Podcast Intro
Zack Needles:
This episode is brought to you by Deloitte Private, serving family-owned companies, family offices, and privately held businesses, and advising them on a range of issues, from growth, talent, and succession to the potential and perils of AI.
Katy Wilder Schaaf: Family governance is a vehicle that bridges the work of the family and the work of the business. And developing that has really allowed us to provide structure and definition around what it means to be an engaged shareholder.
Zack Needles: That was Katy Wilder Schaaf, vice president of the board of directors for her family business, E. Ritter & Company, discussing the importance of family governance. We’ll hear more from her later. Welcome to the Family Business Business Family Podcast. I’m your host, Zack Needles, editor-in-chief of Family Business magazine. In this episode, I also sit down with Preston Root, fourth-generation steward of Root Glass Company, to talk about how formulating a family constitution can bring your family together and help to pass the family’s values down through the generations. But first, I chat with Katy Kothmann Abraham, president of Construction Cost Management, about the unorthodox career path that led her to buy the cost estimation company from her father. We also talk about how she established herself in a male-dominated industry and built her credibility despite not having a traditional technical background. Before we get started, support for today’s show comes from Deloitte Private. Our passion for innovation creates powerful opportunities as we advise family businesses on ways to stay ahead of change, to leverage technology to drive progress, and to transform disruption into multi-generational value. Deloitte Private brings the service, depth, and breadth of Deloitte, tailored specifically to the unique demands of family enterprises, family offices, privately held businesses, and venture-backed companies. Connect with us at Deloitte.com/US/private. Hi, Katy, thanks so much for joining me today.
Katy Kothmann Abraham: Thanks for having me.
Zack Needles: Absolutely. So let’s set the stage here just a little bit. Tell me about your career before joining CCM.
Katy Kothmann Abraham: Sure. You know, I never thought I’d be one of those people that had like five different careers. And every time I start talking about it, I feel like my dad’s voice is coming out of my mouth. And you start to wonder, “Are you old enough to have done all those things?” And I’ll leave off, you know, my high school jobs. But I actually started in retail buying. I was exposed to that industry, and I really thought it was amazing. So I started out with a company called the Bombay Company, and we had 400 retail outlets all over the country and in Canada. I learned to be a buyer by starting out as the VP’s assistant and then kind of got promoted in my way up through associate level. It gave me a real education on worldliness, really, because we had manufacturers and vendors all over the world, and they put me on planes and flew me all over the place to see manufacturing and vendors, look at our designs, and create and produce products. Working there was really cool as a young 20-year-old, traveling a lot and doing lots of what I thought were grown-up things. Then, because of my exposure in the buying agency, I went over to the selling side. I actually sold back to Bombay and became a rep that way for a little while. Then I took a sharp left turn and started repping very large parts and drilling equipment for the oil and gas industry.
Zack Needles: That’s a natural transition.
Katy Kothmann Abraham: Right. It was like a sore thumb, but it was really amazing and gave me a great opportunity to meet different types of people. Oil and gas is really big in this area. There’s an area called the Barnett Shale. At my busiest time, I ran 56 rigs. I sold them giant pumps because you can’t put a hole in the ground without pumping water out of it. I loved it. Those are some hardworking people, and it gave me exposure to a different way of life and some different people. I just fell in love with them. After that, I took another sharp left turn and started repping prescription dog food. It allowed me to work with veterinarians and dog people, providing nutrition. I trained with top veterinarians and trainers all over the world, learning about making dogs’ lives better, which I thought was the end-all-be-all job of my life. Then my dad approached me about purchasing the company from him.
Zack Needles: So that’s what I was going to ask you because I know how much you loved that career. What the heck could pull you away from that career? I know your dad came to you with this offer, but why did you ultimately decide to go into the family business?
Katy Kothmann Abraham: “No. I play with dogs all day, and I don’t want to do your nerd stuff.” But he explained what he thought might happen if I took the business over. Joe, my husband, and I talked about the opportunity it could provide for us. I started getting excited about a new adventure, learning something new, and putting my spin on it. We got together, and my dad formulated a plan by which I could purchase the company from him. He thought I would be a silent partner. I was for about a year and a half while still working at Mars. But my responsibilities were pulling me further and further away, and I knew it was time to work full-time. I think he was surprised at the “new sheriff in town” mentality I brought in. But we had a lot of fun.
Zack Needles: Well, your dad was kind of a legend in that cost estimation field, right?
Katy Kothmann Abraham: Pretty much credited with bringing it to the forefront and making it a requirement for large tax-supported projects.
Zack Needles: Right. And so you came in with this “new sheriff in town” mentality, but it was a struggle to be taken seriously at first, both inside and outside the firm, and with your own confidence. Can you talk about that?
Katy Kothmann Abraham: My only exposure to cost estimates was knowing my dad was an estimator and owned the business. I thought you couldn’t do this unless you were an estimator. My own brain was doing it to me. People around me still say, “We were so lucky your dad gave you that business,” which isn’t true. Financially, it wouldn’t have been a good idea for him. Some employees felt slighted, thinking they should have inherited the business. I underestimated myself. I let imposter syndrome get to me. But all those jobs I mentioned before—I was running $24 million departments, $100 million departments—I knew how to run businesses. I just had to apply that knowledge here.
Zack Needles: Katy, I might have said this to you before, but your story was one of the first I heard when I started as editor-in-chief. It made me think, “This is going to be really cool.” Thanks for sharing it again.
Katy Kothmann Abraham: Thanks for the opportunity. I really love what we do. It’s important. It might even be as good as dog food.
Zack Needles: Preston Root is the fourth-generation steward of Root Glass Company. He’s spent 31 years in the family enterprise. In this interview, he talks about why it’s worth the effort to put together a family constitution. Hi, Preston, thanks for joining me this morning.
Preston Root: Zack, it’s a pleasure to be with you. I’m a frequent reader of Family Business magazine and thrilled to be on the program. Thank you for having me.
Zack Needles: Great to hear that. Tell me about the history of your family business.
Preston Root: My family business is based in Florida. Our operating business is commercial real estate. We’re a mature, 75-year-old single-family office with about 50 family members as clients. Our legacy business started in 1901 in Terre Haute, Indiana, as a glassmaker. We made the original Coca-Cola bottle in 1915, which was a game changer. In the 1980s, we transitioned to commercial real estate.
Zack Needles: Tell me how your family governance is set up.
Preston Root: It’s evolved over time. We’re now over 50 family members across seven generations. About three years ago, we realized the need for a governance document outlining who we are, what we do, and how we operate. We’re now on version three of our family constitution, which includes values, hopes, and conflict resolution frameworks. It’s not just a document; it’s a legacy.
Zack Needles: You mentioned the physical look of the constitution matters. Why is that?
Preston Root: Like Thanksgiving traditions, the family constitution should have gravitas. It’s a tangible representation of values and legacy. It should feel significant, whether rustic for a timber company or polished for high-tech businesses. It’s a binding moment for the family.
Zack Needles: What was the process like, and is it a living document?
Preston Root: It started with discussions, Post-it notes, and drafts. Now it’s a 50-page document revisited every two years to keep it relevant. It’s also an opportunity to engage younger generations.
Zack Needles: Do you have advice for families starting a constitution?
Preston Root: Start with your values. It’s simple and sets the foundation for everything else. Identify 2-3 qualities that define your family. From there, let it grow organically.
Zack Needles: Katy Wilder Schaaf, vice president of the board of directors for E. Ritter & Company and a licensed clinical psychologist, discusses reengaging shareholders and balancing her career with family governance. Hi, Katy, thanks for joining me.
Katy Wilder Schaaf: Thanks for having me, Zack.
Zack Needles: Tell me about your family business and your career.
Katy Wilder Schaaf: I’m a fourth-generation member of E. Ritter & Company, founded by my great-great-grandparents in Arkansas. It’s a platform business in agriculture, telecommunications, and more. I’m also a licensed clinical psychologist with a private practice. Balancing both roles has been challenging but rewarding.
Zack Needles: Any advice for engaging shareholders who don’t work in the business?
Katy Wilder Schaaf: Understand their motivations and provide opportunities for engagement through family governance. Transparency and fostering relationships are key to reengagement.
Zack Needles: Thanks for sharing your story, Katy.
Katy Wilder Schaaf: Great to speak with you, Zack.
Zack Needles: That’s it for this episode of the Family Business Business Family Podcast. Reach out to me at ZNeedles@FamilyBusinessMagazine.com. Talk to you soon.