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The Manufacturers' Network - Lisa Ryan EPISODE 12, 1st February 2021
Family Matters: Secrets of a Running a Successful Family Business with Roger Sargent
00:00:00 00:21:10

Family Matters: Secrets of a Running a Successful Family Business with Roger Sargent

Connect with Roger

Email: absconsulting58@gmail.com 

Telephone: 509-366-2953

Show Transcript:

Lisa Ryan: Hey, it's Lisa Ryan from the Manufacturers' Network podcast. I'm excited to introduce you today to Roger Sargent. Roger is a 20-year entrepreneur who has vast experience working in manufacturing. He's found that family-owned manufacturers have a whole set of challenges that go along with that. So I'll let Roger tell you a little bit more about his background but Roger. Welcome to the show.

Roger Sargent: Thank you, Lisa. I'm glad to be here.

Lisa Ryan: Well, good. Well, share with us a little bit about your journey before and after entrepreneurship took over.

Roger Sargent: Well, I tried to be a professional tennis player at one time and realize that there were a whole lot more people out there that were better than I was. So I started teaching the game because I love the game so much and I realized that the pounding on the court every day was going to beat up my body. 

So I got into management. A few years later, I got the opportunity to become a partner in a health club, which eventually led me into a partnership in a restaurant and hotel.

I realized that all of my business knowledge and systems that I had applied work for any business. About 15 years ago, I started my own consulting business, where I helped small business and middle-sized business owners and their teams with their processes and helped them get out of their own way.

In the construction and manufacturing industries, you find that many of those owners started with a family-owned practice. They've let these processes and procedures that they have always applied go hand down from generation, generation from one employee to another and after a while, no one knows why they do it this certain way. They keep doing it. And so that's what I help business owners in all types of businesses, but preferably manufacturing and construction help them get out of their own way.

Lisa Ryan: So, take us through the process you use when working with your clients.

Roger Sargent: Well, it just starts with getting introduced in and asking a lot of questions; most of those questions start with why and then who, and if they can't answer the why, the who doesn't matter. It's finding out why they do some things the same way over and over again. And if they can spell out exactly succinctly why they do it this way, it probably means to me that it's necessary.

But so many times, probably eight out of 10 times, I ask a specific question on certain procedures, I always get, "I don't know, we've always done it that way." That's not a good thing to hear when you're in a business that you don't know why you do something a certain way and so from there, once you start realizing that there's a lot of, I don't know, we've always thought that way, all of a sudden, teams start to realize that maybe we need to start rethinking these things. I help them with that process. Okay, this is how you've done it for X number of years, whatever.

What is the result we're trying to get in the timeline? And now, let's see if we can work backward and make it happen more efficiently and productively.

Lisa Ryan: So what are some of the things you repeatedly see when it comes to these family-owned or smaller manufacturers getting stuck?

Roger Sargent: Well, it starts with the first generation to the second generation and so on, that the founding member of the family who started the business had this idea and they want to keep the family involved. They put the family in there, and they let them work at the business, which is great. 

So they get to know all the frontline issues and procedures and systems. But what they don't learn is the why. Why are we doing it this wayHow do we ever come up with that particular method? It just starts to get transcended down, but because it's always been done that way and it's family-owned.

No one wants to rock the boat, but they don't take the time to teach the family. They're the foundation of the business not I'm not talking about the procedures in the process as I'm talking about why the business was started in the first place. And what's its overall goal and trying to get connected with their customers and deliver the best service possible.

They seem just automatically to think by just being part of the family. 

That's where it all starts. And that's where I begin with getting my getting the family members together. And the key employees together and just talking that out, but it's just they make too many assumptions that everybody knows why they're doing it a certain way.

Lisa Ryan: It sounds like it can come down to a simple conversation about the company's history because one of the things that a lot of manufacturers are looking at that success is that succession planning. Who's going to take over the business when I'm no longer there? And getting to the point of that why I started the business. What was it that was going on at the time? How did I figure out these procedures?

Because that way, you're giving a history to the rest of the family, who then, based on that knowledge, can come up with ways that make sense to update the policies to update things and take it forward. Instead of getting stuck. Would that be helpful?

Roger Sargent: That that's exactly at least. So that is very well said because it's just people just making too many assumptions, and so those assumptions get passed on from generation to generation. So what you just laid out there is a perfect format to break away from their current assumption base and went forward with maybe not a new business plan, but just new eyes looking at everything going on.

Lisa Ryan: What occurs to me is that maybe that first-generation thinks that the rest of the family's going to get bored or they've heard it before, or I told him. Well, how I started this company 20 years ago, so maybe they do not realize how important it is, especially when you start thinking about transition or succession planning to let the next generations know coming in that this is what we. This is why we got started and helped them get a little bit closer to that.

Roger Sargent: You're so spot on with that message and it doesn't necessarily mean family-owned business. It's just business in general. 82% of all small to middle-sized businesses fail within their first four years, and it's because they don't take the time to put down in stone, what the primary purpose of this business is and why it got started.

What end result is expected and desired end result wants to look like, or should it look like they love their trade most small business owners and middle-sized businesses. They love their trade; they fall in love with their trade, and they think that the business part of things will take care of itself, because they want to be involved with the trade and that's where it stems down because they love it. And that's what makes them so good.

When it is on service delivery, it doesn't necessarily translate that it's going to be a good business. We're all in business to hopefully deliver good products good service, but obviously, to make money to be able to send that business on to the next generation and hand it down to generation after generation, You're not gonna do that if it's losing money every month.

Lisa Ryan: Exactly. It almost sounds like the original thought with the Field of Dreams mentality behind it; if I build it, they will come. That first generation is so passionate, and they have their way, and they know why they're doing, and then over time, that gets diluted. So it's like, well, mom or dad built the business, but why aren't they coming? Because the next generation doesn't necessarily understand that why or necessarily have the same passion.

Lisa Ryan: That the founders, whether it be their parents or the people that they're working for. So after they have that original conversation as far as just discussing the wise kind of painting that picture, where do you take them from there, what would be the next best step?

Roger Sargent: Well, you just said a very keyword passion. The original founder and maybe the second generation had that passion to just keep moving on. That doesn't mean that the next generation of people who have a family have that same passion, so you need to take a look at everybody and say, okay. Now that you've described the bigger vision, I love the old saying by Yogi Berra, "If you don't know where you're going, how do you get there?"  

Once we realize we know where we're going, we know what it looks like to get there. Does everybody that needs to have that passion. Do they have it. And if they don't, then maybe they shouldn't be considered of handing down this business to have because if they don't have that passion. What's going to mean they're going to keep wanting to improve as we move forward with that business.

Lisa Ryan: That sounds like that can be a pretty tough conversation for the owner of a company to have with their family members.

Roger Sargent: In, and what I have found is that it's exactly that it's a family conversation that's going to be tough to have in because this business is like another child to that original owner and so you're talking about your child, another sibling. And so what you're trying to establish here is the true commit. 

I would recommend that. That's where you need to have an outside facilitator make that conversation happen and not just let things kind of get swept under the carpet like it typically can happen with a family-owned and family in general. Sometimes we don't want to deal with that, so we just sweep that topic under the carpet and see if we'd ever get stepped on again to where we need to talk about it again. You need to have some of this to facilitate it from start to finish and not let it get stalled in between.

Lisa Ryan: Well, and the other thing, even though there is an investment in bringing in a consultant or a third party to work with a manufacturer. The nice thing about it is that you can be the bad guy. You can tell that person exactly what that person wants to say, but for whatever reason, they can't say it. They don't want to hurt feelings. After all, they want to keep their family ties because they don't want to destroy their relationships.

So having the skills and looking at it from that neutral third party coming in, you're not only able to say that, but you are perceived differently by the employees because you're not there on the day today.

Roger Sargent: Exactly, yeah.

Lisa Ryan: So after those difficult conversations you've explored the why you've had some of these difficult conversations to kind of reignite that passion within the company. Where do they go from there to move forward?

Roger Sargent: Well, they make whatever necessary agreements that they're going to move forward with the terms they just agreed upon. Then, what you do is you start taking each one of those agreements, and you start now breaking those down to see if there things that are being done right now that can be changed for the better the company and start seeing how that's going to apply. But it begins with agreements, and then you start breaking down all those agreements into small baby steps making those processes to where everybody's body. And so it's not the father handing down more directives; it's now a team of family members or key personnel that's treated like family.

To have their say and how everything looks and sounds moving forward. It would help if you had that buy in. Let them feel like they are contributing, not just what they do to pick up their paycheck, but contributing to the bigger picture and the bigger cause.

Lisa Ryan: Share with us a success story that you had with one of your clients, of course, giving the information confidential. But something where you saw a real big difference between what they were doing by implementing the process that we just talked about how they were able to see success after that.

Roger Sargent: There are plenty, but the one that comes to my mind is a family-owned company. They have the daughter, the husband of the daughter, and then the husband, a wife who founded the company. They all have their roles, but they were not necessarily meant to be in that role because of their particular skill set. The job came open, and they needed to put someone there. So they put a family member, even though they might not have been fully qualified to do that. And over time, even though you're a family member, you don't enjoy what you're doing because you don't know what you're trying to do. It can weigh on you and take a toll. Once we found this out, we realize that they had much better skill sets necessary in other parts of the business. So what we did was we moved them to where they had that self-injected fire that started underneath them. They were excited to come to work and help out in that particular area instead of just coming in and dreading it every day. Not being productive every day because I didn't like what I do because I didn't know what I was supposed to do. 

The old saying, "You don't know what you don't know." If no one teaches you, just throw you in that spot because the opening is here and we need to get that stuff done. That's not the recipe for long-term success. Once we've put the family members in the right spot that opened up the opportunity for some long-term employees who have been around with a family business for a long time to step into additional roles they were excited about. So, the company's morale, first and foremost, just springboarded greatly because they felt so good about that. But at the same time, when you come to work and you enjoy what happens that energy and synergy is going to transcend through all the rest of the employees. Without doing a whole lot of other changes to the marketing process or the sales process, all of a sudden, the company became more efficient and more productive, which means they became more profitable because everybody was doing a job that they liked. They were good at it, and before it, just good things happened without changing a lot of the operational procedures.

Lisa Ryan: That's such an interesting point because our whole conversation up to that was about the owner or the leader of the company themselves sitting down and sharing their passion and their why. But having that level of not the only vulnerability of allowing that employee that family member that person is that isn't quite getting that passion for feeling safe enough to share. Well, I don't understand what I'm doing. Well, I don't like what I'm doing well. That opens up like you found opportunities for them to move into something they are passionate about. So it does go on both sides of the equation; it's up to the owner to the company's leadership to share the reasons why. But it's also coming full circle that they have to listen and be willing to listen to their employees, whatever they say, and look for ways to make it work, even though it's not necessarily the role that they thought that that employee was supposed to be.

Roger Sargent: Yeah. Well, well, said what you find is that most owners when they started a business. They were so in love with their trade that they didn't take the time and effort to get to know the other aspects of running that business. So when they hand that roll off to a family member or just an employee, most of the time, they're not very well trained on how to do that because the owner himself doesn't know how to do that. So, hey you applied for a bookkeeping job, you said you have some booking experience go through the book you've been, even though they might only know how to do payroll, they might not know how to do anything else and bookkeeping, but they might have just done payroll only or just done accounts receivable only, and now they're in charge of all the bookkeeping that they have no real skill set to do that entire job. 

That's the problem with most businesses, primarily in manufacturing, is that we get so involved in our trade in the delivery of service that we forget that those other business components are necessary evils that need to be addressed every day to make sure that the business is going to be profitable and sustainable from you're in and you're out.

Lisa Ryan: You have given us so many great tips about just taking a step back and looking at the business. But if you were to wrap it up in a nice little bow with your best tip that somebody listening today could start to implement, what would that be?

Roger Sargent: Of stop making assumptions. Number one: start having some in-depth conversations with your key staff and your frontline staff as well. Start building that foundation and that environment where it's safe to say what's on your mind, obviously. You need to do that respectfully, but, you need to find out. Do you have everybody sitting on a seat on the bus right now within that organization? Are they sitting on the bus's right seat and did they knew their why; the big purpose of the business was started in the first place. If they can, if they're seeing say yes, I'm on the right seat. I love this place. I love what I do every day, and I know the why, on the bigger picture. Now start moving into the efficiencies.

But first and foremost, stop making assumptions and build that environment where people can freely say what they need to say and not have any repercussions, so that way you know. Have you heard the same two heads are better than one? Well, I think ten heads are better than two. So if you've got a lot of people getting feedback, you just never know what you might find out from that frontline employee that comes in with such a different perspective. Something that might be relevant for your business today that you never thought of before give them that opportunity.

Lisa Ryan: Wonderful. Well, Roger. Thank you so much for being on the show today from a networking standpoint if people would like to reach out to you. What's the best way to do that.

Roger Sargent: Well, my, my cell phone. I was always on me. So you can call me at 509-366-2953 or you can reach me on my email by ABSconsulting58@gmail.com

Lisa Ryan: Wonderful. Well, again, Roger. Thank you so much for being on the show today. It's been great to have the conversation.

Roger Sargent: Thank you very much I enjoyed it.

Lisa Ryan: I'm Lisa Ryan, and this is the manufacturers network podcast. See you next time.