Well-organized succession planning and ongoing communication are critical to the continued success and growth of family-owned businesses. But navigating the transition from one generation to the next can be an emotional and challenging experience.
In September, Joe DePalma, president and CEO of DePalma Hotel Corporation for 30 years, officially passed the baton to his son, Brian. The Arlington, Texas-based company manages 27 hotels across the country. Handing over the reins has not been easy for Joe, who is still working 60 hours a week in a chairman and founder capacity. “I’m trying to shift focus strictly to customer relationships and development and let Brian handle the day-to-day operations,” DePalma says. “It’s a little difficult because I’m still around all the time.”
DePalma decided eight years ago that he would step aside. “It’s been tough to let go,” he admits. But the fact that Brian had already worked in the corporate office for about five years has made the transition much smoother. “He’s pretty much been indoctrinated and been involved in the day-to-day for a number of years,” DePalma says.
When 63-year-old resort owner Brian Thuringer turns 70, his children Ben Thuringer and Abbey Pieper will have the option to buy him out and become third generation owners of Madden’s on Gull Lake in Brainerd, Minn. “Owning and managing a resort is more a lifestyle than it is a job,” says Thuringer, who is president of Madden’s along with his wife, Deb Thuringer. “Ben and Abbey have grown up in that lifestyle, and it is their intention to take over the resort.”
After working at Madden’s for 40 years, Thuringer says it will be a challenge to step back from the 1,000-acre resort, which was established in 1929. To remain viable, the resort needs to shift its focus from Boomers to Gen X and Millennial travelers. “It just makes sense that the leadership turns now to that next generation,” Thuringer says.
Before taking over a family business, however, the next generation needs the proper skills, education, and work experience. Four of DePalma’s seven children work for DePalma Hotel Corp., and they all worked outside of the company first to cultivate their talents and establish their credibility. “I’m a firm believer that you don’t work for the company just because your name is DePalma,” Joe says. Brian joined the family business after four years as a general manager with Marriott International. During his 12-year tenure with DePalma Hotel Corp., Brian has worked his way up the ladder with roles including general manager, regional manager, project management, and business development.
As part of the Thuringers’ transition plan, Ben and Abbey were required to have a four-year degree and work at outside properties, four-star or better, for four to five years. After putting in time at reputable hotels, Ben now manages the 65-unit Madden Lodge, and Abbey is developing the marketing and rejuvenation of the Wilson Bay resort on the Madden property.
In some cases, families use an outside third party to mediate, facilitate discussion, and give advice on succession planning. The Thuringers have benefited from programs offered by a local family business center. And as past chair of the AH&LA’s Resort Committee, Brian Thuringer has also sought advice from fellow family resort owners. “I’ve leaned on those people and studied what they’ve done…many of those families are in their fourth or fifth generation,” he says.
DePalma has 14 grandchildren, including one who is tending bar at a DePalma-managed hotel, so he hopes the family ownership will carry on to the third generation and beyond. “I started the company 30 years ago with a hope and a prayer, and I’ve been able to grow it and survive the ups and downs,” he says. “I think my kids would like to see the company stay in existence and the name go on.”