When asked to discuss the subjects of retirement and succession planning for his rep firm, Bob Gerrard doesn’t skip a beat.

Instead, Gerrard, Gerrard & Associates, Mooresville, North Carolina, launches into his view of retirement. “If I maintain that retiring is simply doing what I want to do for the rest of my life, then I’m going to continue being a rep and doing what I’ve been doing for more than 35 years.”

In fairness, that’s a somewhat easy statement for him to make given the fact he’s already got someone (his son Dave) firmly in place to take hold of the agency reins if and when that time is ever appropriate.

Here’s how Gerrard arrived at his very comfortable mindset.

“When my wife Jackie and I were on a cruise earlier this year, I didn’t know that I was on the verge of making the discovery that he (his son Dave) was really the one to take the firm into the future. But a couple of things happened that just made that a very natural and comfortable decision.

“Basically, our plan for the future was one where the roles each of us filled would simply evolve. There was never really any doubt that Dave would ultimately take over, but here’s what happened that solidified everything.

“We had no cell phone or e-mail communication while we were gone. Prior to the trip, I had recruited a terrific new manufacturer and was in the midst of speaking with them prior to leaving on the trip. We had a verbal agreement to work together but nothing in writing. While I was gone, something came up that offered an opportunity for us and them. Dave was aware we didn’t have an agreement in writing but he never hesitated. He simply picked up the phone, communicated with the manufacturer and determined what had to be done. He did that all with no guidance from me.”

Dave didn’t stop impressing his father with that initial effort. “Then he encountered a problem with a customer I had been working with. He identified the problem, contacted the manufacturer and solved everything, once again, without checking with me. Not stopping there, he went on to send ‘thank you’s’ to everyone with the manufacturer who was instrumental in taking care of the customer’s problem.

He’s the One

“When I learned of all this, I turned to Jackie and said that speaking not as a father, but as a business owner, it’s obvious that Dave is the one to have in place to transition the business. Once again, as a business owner, I’m saying if I had to make a hire, Dave is the one I’d hire for now and the future.”

Coming at this subject from a slightly different vantage point, Jackie Gerrard, the agency’s executive vice president, CFO and office manager, says “As events transpired, I saw a change in Bob. Bob loves and always has loved what he does, but especially he loves the creative part of the business. The fact is, however, that he can’t be on the road selling and in the office doing all the creative work at the same time. For some time now, we’ve been looking at how Bob could continue doing that creative work but not having to spend so much time on the road. When these events occurred, I saw that the trust was there for Bob to turn over the selling part to Dave. Dave obviously has proved himself and Bob is very comfortable in turning the business over to him.”

Bob Gerrard continues that since these events transpired, “There’s been a real change in our relationship with each other. Now the relationship is more of a partnership and Dave shows a feeling of complete ownership. Things are quite different than they ever were. In addition, I find myself more willing now to share equally in a financial sense. I truly view him as the partner.

“It seems to me that events such as these are really necessary if a transition is going to be smooth and successful. There was nothing like this when my father turned the company over to me 30 years ago, but then neither he nor I had any idea what we were doing at that time.  In honesty, the company was successful because of the one manufacturer that my father started the firm with, who was his former employer.  My father had retired early and taken over as their rep, and enough money poured in the door from nothing more than spare parts business to take care of everyone.  All we had to do was answer the phone. But when that manufacturer went direct eight years later, I had to start all over again.

Completing the Transition

“Again, the game changer that opened my eyes to all of this was the recognition that Dave is ‘the one that I want.’  Once that occurred, his role became crystal clear. Now we have to figure out the rest of what we have to do just as clearly and then we will have a successful transition.”

In an effort to pinpoint those things that must be addressed in order to accomplish a transition, Gerrard explains that the entire agency (Bob, wife Jackie, son Dave and his wife Stacy) identified “the things we’ve done that make us successful today.” That effort focused primarily on four aspects of the business:

• “The first thing we looked at were our manufacturers, and what makes us successful is that we represent the absolute best manufacturers.”
• “Next it was necessary to recognize the remarkable talent and ability of Dave Gerrard. He’s responsible for a great deal of our good fortune.”
• “The third thing leading to our success is the customer base that I’ve built and the name recognition that we as an agency have achieved in the marketplace.”
• “Finally, our success is directly related to the positive way the economy has turned around for many of our manufacturers.”

Having recognized those things in the immediate past that have led to the agency’s present success, Gerrard notes that “We then had to identify that which we must do in the future.

• “The first step is to make sure that we take very good care of the manufacturers we represent. We’ve got to make them happy.”

An initial step on the path to making and keeping the agency’s manufacturers happy, according to Gerrard, is to communicate with them. “We won’t wait for the manufacturer to ask us for something — we’re going to take the initiative as we always have, to let them know what’s going on. And, whatever communication we initiate, we’re going to make sure that the person responsible for hiring and terminating reps is in the loop.”

Keeping People in the Loop

The importance of that last consideration was driven home recently, according to Gerrard, “When we learned from the vice president of sales of one of our manufacturers that they might terminate us. His feeling was that we were receiving commissions for orders that were just dropping out of the sky. When I heard that I was absolutely flabbergasted. Apparently what was happening was that whatever information we were sending to the manufacturer was not getting to him. To his credit, he listened to what I had to say concerning our work with customers and the problem was solved. This, however, drove home the point of how important it is to have the decision makers firmly in the communication loop. I don’t ever want to get another phone call like that. That’s why we’re going to make it a condition of future manufacturer-rep relationships that that decision-maker will receive the information we’re sending. If they’re not interested in the occasional 15–20 minute phone call, then I don’t think they’ll be interested in a rep relationship with us.”

Next up for future planning, Gerrard says, is to “keep Dave as busy and happy as possible. I’m pushing him as much as I can.”

• The next step in this future planning process is to continue the name recognition effort of the agency. “We have to faithfully send e-mail blasts, conduct customer seminars and take other steps to reinforce our name recognition.”
• Another consideration for the agency is to recognize the fact that “Hope is not our strategy. We can’t depend upon the phone continuing to ring. We’ve got to make it ring by searching out and identifying opportunities for ourselves and our manufacturers.”

If the aforementioned represent strategic steps Gerrard & Associates must take in order to establish its foothold for the future, Bob and Jackie Gerrard also admit to the importance of getting all these plans (including a comprehensive succession plan) set down in writing. “So far, we’ve committed nothing to writing,” explains Bob. “But we’ve spoken about it extensively and definitely will do that.” Jackie adds, “What we’ve planned for the future has all been included in the minutes of our board meetings but establishing a written plan definitely will be done.”

As the succession plan continues to evolve, Jackie Gerrard notes that an important crossroads in the planning process occurred when there was discussion related to her duties with the agency. When Dave broached the subject of the future, he concentrated primarily on the role that Bob played. Not necessarily included in the discussion were the functions (e.g., receiving, shipping, quotes, paying bills, tracking commissions, and much more) performed on a regular basis by Jackie. While an organizational chart for Gerrard & Associates clearly shows those duties performed by Jackie, Dave admitted that he saw his mother and father as one. He now has a much deeper appreciation for the fact that any succession plan has to include someone taking over for each of them.

According to Jackie, “What had to happen was for him to look at me not as his mother, but rather as the executive vice president and CFO of the agency. It can’t be overlooked that I’ve spent more than 30 years here — this has been my career. As a result, any agreement or any handing over of the business has to be accomplished with both of us in mind, not just Bob.”

As he continues to contemplate the agency’s succession plan, Bob Gerrard could hardly be blamed for looking back at a similar experience he had years ago when he took over the agency from his father: “Let me compare what we’re going through now with what I went through with my father back in the ‘80s. When it came time for me to take over the agency that he started, I simply said to him, ‘We’re at the point where we have enough money coming in to support us. I’ll buy the agency from you for this amount of money. He said, ‘Let’s do it.’ So in exchange for a note, we got the deal done.’”

While times have changed and business may be a bit more challenging than it was more than 30 years ago, it would appear the Gerrard’s are planning just as smooth a transition now as was accomplished back then.