They Put the “Success” in Succession Planning

A look at how three very different local businesses were able to make the transition to a new generation
Succession 1
As of July 14, 2022, Courtney Hebert-Davis — the eldest daughter of Bart’s Office Inc., founders Bart and Kathleen Thibodeaux — is the company’s new owner, along with her fiance, Bobby Woolley. Hebert-Davis’s daughter, Kaylie, currently serves as special accounts manager.

Nearly 90% of businesses in the United States — and worldwide — are family owned. And for many of these businesses, the ultimate goal is to exist long past the founder’s lifetime and serve as a family legacy that brings wealth and success to generations to come.

The reality, however, is that only approximately 30-40% of family-owned businesses are successfully transferred to a second generation, and only about 13% make it to a third generation. Frequently cited among the top reasons for a family-owned company’s demise is a lack of succession planning.

A good succession plan clearly lays out how a company will be transferred to the next generation. It defines how ownership of the family business and assets will be divided, and who will serve in what role. Maybe most importantly, it is clearly communicated and agreed upon by all parties involved well before it is needed. The result is a plan that ensures continuity for the business, and its employees, and that protects the family’s wealth, and often its relationships.

Unfortunately, only about one-third (34%) of family-owned businesses report having a solid, documented and well communicated succession plan in place. Almost another third (31%) have no plan other than the owner’s will.

Every business, and every family, has its own unique strengths and issues, but these three local businesses have at least one thing in common, they have all successfully navigated the succession process and were willing to share the lessons they learned in hopes of helping others do the same.

 

THINK OUTSIDE THE FAMILY.
Bart’s Office, Inc.

A commercial moving and office installation company, Bart’s Office, Inc., is a second-generation, family-owned company that includes 40 full-time employees and services the Gulf South area and beyond. Among its largest recent projects was working with the Louis Armstrong New Orleans International Airport to move all its seating to its new location and complete some of the restaurant installations. Just a handful of the company’s other clients have included AT&T, Entergy, Catholic Charities, the City of New Orleans, Delgado, Louisiana State University, the U.S. Department of Housing and Urban Development, Touro Infirmary, and the World Trade Center.

The company was founded by New Orleans natives Bart and Kathleen Thibodeaux in 1978 as Bart’s Office Furniture Repairs. Bart had previously been installing office furniture for Dameron Pierson, a sales company in Metairie.

“My dad would be out on job sites and clients would ask him to fix furniture for them,” explained Courtney Hebert-Davis, the Thibodeauxs’ eldest daughter. “Since he had installed the furniture, he knew it well and he could repair it, so he did. Eventually, he went to his boss and suggested they offer repair as a service. They weren’t interested, but his boss said he’d refer any clients to him if he started his own business.

“So, he went to my grandfather for support, and my grandfather was angry at first. He actually used to love to tell us the story: My grandfather worked for AT&T and assumed that my dad would do the same and basically thought, ‘What, this isn’t good enough for you? This is how I supported our family.’ He ended up agreeing to support my dad for a year, and he said by the end of that year my dad was making more money than he was.”

Assuming they would have a son to succeed them in the business, the Thibodeauxs actually had four daughters — Courtney, Ashley, Kasie and Alexie — whom their father was determined to instill with a strong work ethic.

“There are a lot of people who will shy away from hard work,” said Hebert-Davis, “but my father never allowed us to. And even though he did not have boys, he certainly didn’t treat us like we were incapable of doing things.”

In 2000, when his eldest child was only 22 years old, Bart underwent a liver transplant as a result of complications following a motorcycle accident. For the following almost two decades, until his death in 2019, he was too sick to run the family business. Kathleen continued to run the office, while Ashley, their second-eldest, ran operations. The furniture repair business grew into furniture installation.

By 2010, all four sisters were working in the business. For seven years prior to her return, Hebert-Davis had owned a Planet Beach spray tan company on Metairie Road, which she grew and sold. When she decided to return to the family business, she said she aimed to use what she had learned to make a change.

“I wanted to run more like a corporation and less like a mom-and-pop operation,” she said. “At that time, the company was over 30 years old and we had about three people who worked for us full time. My sisters and I started growing the company about 30% year-upon-year. It was a lot. We were flying by the seat of our pants.”

After their father’s death, three of the daughters began moving away from the company for various reasons, including Ashley, who started her own consulting firm.

“Everything [for the company] was always decided by vote, and that was getting harder and harder with not everyone there for the day-to-day,” said Hebert-Davis. “So about a year ago, my fiancé and I went to my sisters with the idea of buying them out.”

Getting everyone on board with the buyout, however, took a little time.

“It was not necessarily a cut-and-dried, easy process,” said Hebert-Davis. “There’s a lot of emotions that are involved in a family business, a lot of pride, and a lot of hard work by all parties.”

Hebert-Davis credits the success of the transition to two individuals: Keith Gillies, chief financial planner and managing principal at Wealth Solutions in LaPlace, and her fiancé, Bobby Woolley, who served as a sort of informal mediator.

“Bobby took care of all the negotiations,” she said. “You don’t want to have everybody in the room together because emotions can run higher when there’s more people feeding them. He talked to everyone individually about if they were willing to sell, and if so, what was their expectation of what they would receive during that sale… At the end of the day, the goal for all of us was just to be a family.”

After coming to agreements with every family member and about six months of legal paperwork, Hebert-Davis and Woolley became the owners of Bart’s Office, Inc., on July 14, 2022.

Two years ago, the first member of the family’s third generation — Hebert-Davis’ daughter, Kaylie — began work at the company. She currently serves as special accounts manager.

 


Succession 2

A family with a command of heavy highway construction, the Commanders include (left to right) Cory, Kelly, Derek, Madeline and Christian.

BE FLEXIBLE AND PUT FAMILY FIRST.
Command Construction Industries

A woman-owned heavy highway contractor, Command Construction specializes in concrete paving, site-work, concrete barrier installation and sewer, water and drainage projects throughout Southeast Louisiana. The company has approximately 250 employees and completes 18-20 projects a year.

Among their current projects is the roadwork being done on Severn Avenue in Metairie adjacent to Lakeside Shopping Center. Past projects include the last phase of Earhart Boulevard, the Louis Armstrong New Orleans International Airport, and several projects on Highway 190.

Command Construction was founded in 2001 by Kelly and Derek Commander. A graduate of Tulane University’s civil engineering program, Derek had worked for multiple area construction companies, including Boh Bros., before he found himself at a crossroads.

“I got to the point in my career that to grow, I’d either be looking at moving out of town or starting my own business,” said Derek, “so we started a business.”

Command Construction’s first job was on Patricia Street in St. Bernard Parish for the Louisiana Department of Transportation and Development. Over the years since, all three of the Commanders’ children have worked their way up in the business. Their eldest son, Cory, earned an executive MBA from Louisiana State University and currently serves as the company’s controller. The couple’s youngest child, Christian, was only 7 years old when the company was founded. He received a degree in construction management from LSU and works as operations manager.

The middle of the three children, Madeline, followed in her father’s footsteps to earn a degree in civil engineering from LSU. Following graduation, she worked in Austin, Texas, for a while before returning home in 2017.

On Jan. 1, 2019 she formed her own company, Traffic Commander.

“When I started working with my family, I was interested in the customer interfacing safety and service business,” said Madeline. “I acquired the former traffic division of Command Construction and have established a presence, vision and culture all my own … It works well for me because I’m highly independent, but we still get to work together.”

Traffic Commander specializes in traffic control services — work consisting of lane closures, flagging operations, selling, renting, and installing advanced warning signs, arrow boards, message boards, cones, barricades, temporary precast barriers and any work zone needs to make highway work safer for the traveling public and construction workers.

Kelly and Derek said the plan was always to pass the business on to their children in stages, but their timeline recently became accelerated.

“Up until a few years ago, we had an operations manager who was supposed to be the guy that would take over in the gap, someone who would handle things while the kids had a little more time to get more experience under their belts,” said Derek. “But three years ago, he had a massive stroke. He was only in his early 50s. That really lit a fire under us to get the kids up to speed much quicker.”

Now in their 60s, Kelly and Derek said they hope to start to step away from the company in the next few years.

“Part of the plan was helping Madeline to get established in her own company,” said Kelly, “and also helping our sons in the roles they currently hold to understand our business and be successful. We knew it was going to be a long-term process, but it needs to be to set them up to be even more successful than we’ve been. We’re engaging in that every day.”

Madeline said she feels fortunate that she and her siblings work so well together.

“All of our talents are really complementary — our background training, our personalities,” she said. “As a team we really help fill the gaps, and we never take anything personally. It’s always just about the success of the business.”

When it comes to their best advice for other businesses going through a succession, Kelly, Derek and Madeline each had a different take.

“You have to compartmentalize,” said Kelly. “Try to leave the job at the job and remember that you’re a family. You have to make sure you still have fun times together — dinners, vacations — because if not, work can take over your whole life.”

“One thing I learned through the Tulane Family Business Center is that not every business can be passed down,” said Derek. “Trying to force a square peg into a round hole sometimes is the absolute worst thing you can do. Look at the dynamics of the people in the family and see if it’s even doable. I know some companies that have split because of turmoil in the family and that’s not something I wanted to see in our situation. The family unit has to be intact first before you even consider a succession.”

“I would say to make sure you have loyal key personnel and non-family members in leadership roles,” said Madeline. “It helps balance the responsibilities.”

 


 

Succession 3

(Left to right) Jasminne Navarre, D Joan Rhodes, Sandra R Duncan, Stephanie R Navarre, Willie Navarre and Kathleen Rhodes Astorga

IT’S NEVER TOO EARLY TO PLAN FOR SUCCESS.
Rhodes Family of Businesses

When Duplain W. Rhodes established The Rhodes Undertaking Company on Valence Street in Uptown New Orleans in 1884, there were no funeral homes that accepted Black people, so often the bodies of the deceased ended up being prepared in stables. Rhodes’ company offered up a quality experience for the community he loved, and it is a passion he instilled in his son, Duplain W. Rhodes Jr.

Together, the two grew the business, acquiring the side of the business of several insurance companies that catered to Black customers, and opening additional branches — one in Gretna, another in Uptown in the old Tivoli Theater, which he remodeled in 1969, and yet another in Baton Rouge.

The Rhodes family of companies now numbers eight, including two funeral homes (Duplain W. Rhodes, which has five locations in New Orleans, and Rhodes United Fidelity Funeral Home in Baton Rouge). The family also owns four development companies — Rhodes Commercial Development, D&R Real Estate, Rhodes Properties and Claiborne Corridor — as well as the Bohn Motor Company and Rhodes Life Insurance Agency.

“Every time my mom and dad acquired a location, they put in into a real estate company,” explained Kathleen Rhodes Astorga, one of five siblings who ran the business after their parents — Duplain W. Rhodes Jr. and Doris Millaud Rhodes — died in 1988 and 1989. Astorga’s sister, Edith Rhodes-Gomes, died in 1994.

Astorga said she and her three remaining siblings — D. Joan Rhodes, Sandra Rhodes Duncan and Duplain W. Rhodes III — continued her father’s dedication to succession planning.

“My parents always talked to us about what would happen when they died, so we all were very clear long before it happened,” said Astorga. “When they died, we all inherited stock in the company. After Hurricane Katrina, we all sat down with Edith’s two kids, Walter and Lisa, and asked if they wanted us to buy them out. They said yes, so we bought them out of the funeral homes. They are still stockholders in our life insurance agency and one of our property companies.”

At that time, the family also put in place buy/sell agreements, something they were grateful for when they suffered another loss last year, the unexpected death of their brother, Duplain W. Rhodes III.

As a family that has spent over 130 years in the deathcare industry, Astorga said they know the importance of planning ahead and they don’t shy away from tough discussions.

“My parents were never afraid about talking about death,” she said. “They saw some of their peers in the industry run into trouble by avoiding those talks, so they believed in telling everyone while you’re alive what the plan is going to be. If someone’s going to fight, let them do it while you’re alive. And, more than anything, keep talking to each other. Keep the lines of communication open.”

Astorga said the succession planning work is an ongoing focus with the family’s fourth generation.

“There are 15 members of our fourth generation, most of which have worked in the business at some time or another in their adult lives,” she said. “Two are currently working full-time and five part-time. The rest have made themselves available for the training.”

The company’s succession training involves gathering the family together for regular educational sessions on both the business and future plans.

“Right now, we are doing a three-month series in October, November and December to go over what they own, including profits and losses, and open the floor to great ideas and strategy,” said Astorga. “We also sometimes invite in other professionals to share their knowledge. We’ve had two attorneys in to explain buy/sell agreements and answer any questions, and two or three years ago we had an expert on conflict resolution. We’ve also had HR professionals, accountants and even other funeral-home owners with similar businesses.”

The Rhodes family’s love for planning, attention to detail and focus on collaboration and diversification has brought them successfully this far, and Astorga said she feels confident it will keep them going strong well into future generations.