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Family-owned businesses face double tragedy with unexpected death of a leader

Todd Bachman, Barbara Bachman, Elisabeth Bachman McCutcheon and Hugh McCutcheon at Elisabeth and Hugh's wedding in December 2006.
Courtesy of Bachman’s Inc.
Todd Bachman, Barbara Bachman, Elisabeth Bachman McCutcheon and Hugh McCutcheon at Elisabeth and Hugh’s wedding in December 2006.

Many of us have had to mourn the unexpected loss of a loved one.

Very few, though, have had to do that while trying to keep a multimillion-dollar family business on track.

A senseless stabbing death halfway around the world last week thrust the Twin Cities family of Todd Bachman into such a situation. Family members of the fourth-generation CEO of Bachman’s floral and garden company now find themselves planning not only his funeral but a business succession.

An unexpected death of a business executive presents a unique burden for family-run companies, says Dan Schneider, a succession adviser with the Rawls Group in Des Moines, Iowa. “They’ve got to deal with the grief and loss of a loved one,” he says, “as well as trying to figure out what we do with the business.”

Bachman’s isn’t talking publicly about how it will proceed with a succession, but family business experts say the same planning and organization that’s kept Bachman’s in the family for more than a century should help the company get through this difficult period.

“Bachman’s has been a family-owned and -operated business for five generations. We have successfully managed leadership transitions many times,” said President Dale Bachman, speaking at a news conference Monday outside the firm’s Lyndale Avenue headquarters. Dale Bachman is one of three cousins of Todd Bachman who are part of the company’s management team.

Dale Bachman, speaking at a news conference Monday outside the firm’s Lyndale Avenue headquarters. MinnPost video by Dan Haugen.

Family flower company deeply rooted
The company has been in the family since 1885, when German immigrant Henry Bachman Sr. bought some farmland in south Minneapolis and started planting vegetables. As farming changed, Bachman switched to flowers, and the company took off. It now operates 19 retail stores, hundreds of acres of growing space and employs a seasonal peak of 1,600 people.

Todd Bachman seemed to work with every one of them. He was a hands-on manager who kept in close contact with all of the company’s business operations, Dale Bachman said. He was always monitoring and encouraging employees, he said, and his expertise was aided by his horticulture degree and his previous work experience in the greenhouse and gift-shop divisions.

“He was just very, very well-rounded in his knowledge of Bachman’s operations,” Dale Bachman said.

Albert (second generation) and Henry Sr. (founder) working in the greenhouse bunching radishes. Circa 1912.
Courtesy of Bachman’s Inc.
Albert (second generation) and Henry Sr. (founder) working in the greenhouse bunching radishes. Circa 1912.

To carry on without him, the company will rely in part on the same system that allowed Todd Bachman to travel to the Beijing Olympic Games in the first place without needing to worry about business back home, Dale Bachman said.

“Certainly, it couldn’t be done without the total organization, and that’s what it’s taking to focus on what’s happening in China and to tend to business here at home,” Dale Bachman said. “We have a structure in place that works while Todd is out of town, and that structure is working now.” It involves a now-five-person operations committee that meets regularly and represents all of the company’s divisions. It includes Todd Bachman’s cousins and two non-relatives.

Such a management team can help companies to continue functioning well during these types of unexpected transitions, said Schneider, the succession expert. One distraction is unavoidable: “The grief is going to be the same, regardless of the competency of the management team.”

Dale Bachman said in an interview there should be no confusion over ownership issues because of the planning effort put in by their fathers’ generation. He said they went through a detailed process, outlining ownership rules for the next several generations.

Bachman’s well-prepared with plan in place
“They really put in place a plan that has carried us, not only in dealing with ownership issues from the third to the fourth, but the fourth to the fifth, and the fifth to the sixth,” Dale Bachman said. “We now have sixth-generation ownership in the company, the children of Todd’s children.”

Entrepreneur coach Allen Fishman, whose book, “9 Elements of Family Business Success,” is due out in September, said it’s “highly unusual” for companies to be as prepared as Bachman’s appears to be. In fact, he said there are estimates that only 3 percent of family businesses make it to a third generation of family management.

Succession problems occur most often with the first and second generations. Issues that need solving well before a succession go beyond choosing the next leader. The details include such things as bank account access and signature rights, Fishman said. Having been through multiple-generational handoffs, Bachman’s likely knows the process well.

“They’ve been through this long enough that they’ve reached that stage which I refer to as the dynastic stage, where they’ve worked out the transition challenges probably decades earlier,” Fishman said.

Succession plans usually identify someone who has effective control immediately, Fishman said. Because Dale Bachman has been the face of the company at the news conferences, it could be that he has that leading role, Fishman speculated. Whoever it is, the person will have strong influence in selecting a permanent successor for the chief executive position.

“Sometimes it goes to the person who is most qualified, and sometimes it goes to the person who is most senior,” said Schneider. “The key is to find someone to step in who can continue to grow the company’s value.”

Meanwhile, the company’s public priorities now are mourning Todd Bachman, supporting his hospitalized wife, Barbara, and continuing to serve customers. Several dozen employees watched Monday’s news conference. Dale Bachman said he knows they are hurt and grieving.

In honor of Todd Bachman, there is a commemorative display in all Bachman's locations.
Courtesy of Bachman’s Inc.
In honor of Todd Bachman, there is a commemorative display in all Bachman’s locations.

“Each of you is doing exactly as Todd and Barbara would wish. You are coming together to support each other. You are sharing your wonderful memories and stories of Todd. And you are continuing to serve our customers,” he said. “Todd would be so pleased, and so am I.”

Dale Bachman said employees are experiencing “absolute shock,” but they have “a total commitment to do whatever needs to be done to support Barbara in her recovery, to mourn Todd and to carry on business.” Grief counselors were with employees at company headquarters Monday and would be available to all employees throughout the week.

Teri Dullnig, operations director for Creative Corporate Catering in New Hope, can sympathize with what Bachman’s employees are going through. Her boss of 10 years died of a heart attack last November, leaving her and her co-workers to pull together to keep the company going.

Leadership style that develops employees a big help

Dullnig’s former boss, Bob Lapkin, was founder and CEO of the company and, like Bachman, a hands-on leader who worked side by side with employees. Thankfully, Dullnig said, Lapkin’s leadership style involved developing the people around him to run the business in his absence. The day of his death, Dullnig met with Lapkin’s widow, Cathi, and decided to continue business.

“Coming to work that morning and having to tell the staff what had happened was something I will never forget, but don’t ever want to remember again,” she said. “Every day is still difficult. You see things, triggers that will bring up memories. It took a long time to have a day without tears for me personally because I had worked so closely with him.”

Within the first few days, Dullnig focused on meeting with the company’s restaurant suppliers, many of whom had personal relationships with Lapkin. It wasn’t until five or six weeks later that the company reorganized itself to reflect the changes. Cathi Lapkin is now president of the firm and relies on Dullnig and another manager to conduct the day-to-day business of the company.

“We were able to pull it together,” Dullnig said. “Everyone continued on business as usual, just with some tears once in a while.”

At Bachman’s, the company says it will continue serving its customers as a legacy to Todd.

“I think we’re carrying out his wishes by staying open and serving our customers,” Dale Bachman said. “It would just not be right to think about not being there to serve our customers, which would be the last thing that Todd would want.”

Dan Haugen covers airlines, medical technology and general business stories for MinnPost. He can be reached at dan [at] danhaugen [dot] com.

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