Dr. Colin Plotkin & Sons Consulting Inc. (DPC) was not founded with the “sons” included, nor was it anticipated they would be involved.
But seven years after Colin Plotkin hung his own shingle as a consultant to the medical and travel insurance industry, his wife Cheryl and four sons all play key roles in DPC.
There’s only one other employee in the company – an administrative assistant – and that employee is not a Plotkin.
Citing the credo that some of the best-laid plans often go awry, the senior Plotkin acknowledged that he isn’t much of a planner.
His two eldest sons, Shaun and Darren, helped out at the company’s headquarters early on, but completed MBAs in anticipation of finding their own individual career paths.
They joined DPC after having varied success finding steady employment in other fields.
By then, the two younger sons, Ricci and Glenn, saw it as their right to join what had to them become a family business.
While Plotkin initially didn’t envision DPC as a family affair, it is now.
And he has recognized that the company needs to plan for the day when he steps aside as boss and one of his sons steps in.
“The past three months is the first time we have formally said we have to do something about it,” said Plotkin, who still refers to his sons as “the boys,” to their annoyance.
“The boys realize that you can only have one captain. You can’t have five people directing the ship in opposite directions, because you’re not going to go anywhere.”
According to international management consultancy McKinsey & Co., family businesses that properly plan for succession outperform non-family businesses.
However, family businesses tend to fail faster and harder than other businesses if they are not properly prepared for succession.
Less than 30% of family-owned businesses survive to the next generation, according to the Business Families Centre (BFC) at the Sauder School of Business.
And 55% of family business owners have no succession plans.
“If [a family business] survives, it survives longer – but the challenge is surviving,” said Murtaza Chopdawala, a senior consultant at BFC, noting that the employees of a family business have a stronger emotional attachment to the business, which can be a competitive advantage.
He emphasized the need for family businesses to think long term. Multi-generational, in fact.
“Succession planning should not be looked at as an event, it should be looked at more of a continuity,” said Chopdawala. “It should be in small steps rather than a huge drastic event that takes place. And you have a process in place to select a natural successor, with specific rules.”
The Plotkins have enrolled in courses at BFC that tackle such family business issues as wealth preservation, creating the next generation of leadership, family dynamics, organizational structure and succession.
At Canadian Association of Family Enterprise’s Vancouver chapter, which is managed by the Sauder school, the Plotkins hear how other family businesses have planned to successfully transition company ownership when retirement looms for the boss.
Among the first key steps toward succession for the Plotkins is simply getting together to talk about the many issues that need addressing before Colin’s retirement.
Plotkin views it as a form of group family therapy.
His sons, who are all university educated, have each established a unique role or expertise in DPC, so they rarely step on each other’s toes at work.
For example, Ricci is the people person who is at his best when face-to-face with clients, while Darren is the peacemaker and organizer who keeps the office functioning.
“Just by natural selection, if you will, each one has adopted a work profile that is peculiar to them,” said Plotkin.
“But for the business to continue, one of them is going to take over. And that’s when the problems are going to start.”
Darren was the first son to join the company, but is the second eldest.
Because the senior Plotkin believes in sweat equity – the amount of time and effort you put into something determines your equity stake in it – he sees Darren as a likely candidate to take the reins at DPC, even if he is second in line according to age.
“If I exit and say Darren is going to take over my position, I know we’re going to have problems,” said Plotkin.
He said that the family business discussions must also include his sons’ wives and spouses – who of course have their own opinions about who works the hardest and puts in the most time at DPC.
Another issue: the DPC brand is largely associated with the senior Plotkin, who has spent 25 years being an intermediary between insurance companies and medical service providers such as hospitals.
DPC is beginning to shift its brand from the expertise of Plotkin to his sons by, among other things, having them be the public- and client-facing representatives at key industry conferences each year.
“The challenges are not necessarily with the boys themselves, the challenges are the peripherals associated with them which create a lot of the problems,” said Plotkin.
The Plotkin family is receiving mentorship from David Bentall who, as a scion of the family that built Vancouver’s Bentall Group, knows the ins-and-outs of managing the potential pitfalls of having numerous family members involved in the same business.
Plotkin doesn’t think it’s realistic for DPC to iron out every little detail of succession.
But there remains goodwill among the brothers, even if the tension sometimes rises.
“There is polarization, there’s no doubt about it, there’s always been a degree of that,” said Plotkin. “At the same time there has always been an unconditional love between them. When there is goodwill, you have the chance of success.”