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Iowa companies tackle transition


On Nov. 6, AmerUs Group Co. announced that Thomas Godlasky, the life insurer’s top investment executive, would become president and chief operating officer, succeeding Roger Brooks, who remains chairman and chief executive.

The promotion raised the question of whether Godlasky will ultimately take the reins at the Des Moines-based company, but it didn’t provide any definitive answers. Through more than three decades at the top of AmerUs, Brooks has given up and later reassumed the president, chairman and chief executive positions several times amid the dozens of mergers and acquisitions that he has orchestrated.

Any changes in AmerUs’ executive ranks ultimately will be decided by the company’s board, Brooks said. That’s true of most companies, and AmerUs isn’t alone in making changes to its top brass this year. From Casey’s General Stores Inc. to Stetson Building Products Inc. and West Bancorporation Inc., dozens of companies in Central Iowa have experienced executive changes in the past year.

How each departing generation of corporate leadership has prepared for the next has differed greatly, with some choosing near clones, others relying on longtime lieutenants and still others selecting leaders who promise to take their firms in a dramatically different direction. Keeping employees in the loop, succession experts say, is often the most important element for ensuring a smooth transition of power.

“I spend a lot of time on the who, what, where and when of communication,” said said Jim Immel, owner of Immel and Associates, whose firm provides business, personal, financial and legal consulting services to business owners and executives.

That is the case at Bankers Trust Co., where J. Michael Earley has held the top position for a decade. During that period, the bank’s assets have grown from $400 million to more than $1.6 billion and it has been transformed from a generator of losses into a profitable enterprise.

“One of the most difficult issues is once you have identified tentatively in the succession plan who you want to move up, you must carefully handle how you communicate this to the designated individuals,” he wrote in an e-mail correspondence with the Business Record. “These individuals must grow with the organization and be perceived by their colleagues as appropriate successors. There is a delicate balance between telegraphing to individuals who you see as successors and at the same time satisfying the needs of the other middle management officers who are not part of any succession plan.”

At Casey’s, the transition of power has been evolving for more than five years. Earlier this year, Don Lamberti retired as chairman and was succeeded by Ronald Lamb. The two had worked together for 34 years.

Meredith Corp., too, in recent years has developed a fairly consistent route to the top. Each of the last three top leaders, including current Chairman and Chief Executive William Kerr, has risen to the position through the publishing side of the business, which includes Meredith’s flagship Better Homes and Gardens magazine. The publishing group accounts for about three-quarters of the company’s annual revenues and a slightly higher percentage of its profits.

The company has a mandatory retirement age of 65. Kerr is 62.   Steve Lacy, currently president of Meredith’s publishing group, was named Publishing Executive of the Year by Advertising Age magazine in October.

For private firms – especially those in which children are involved – succession plans are often far less formalized.

“It’s almost a taboo subject,” said Donald Doudna, a business consultant who is currently head of the Des Moines-based Charitable and Family Business Resource Center. “Have they (the owners) prepared their children? Have they decided who’s going to do what? How are they going to manage the change? How will the children be compensated? Hardly anyone asks business owners these questions.”

Preparing for change, also, can be a difficult subject for business leaders, especially for family owned companies or those run by an aging founder, succession experts and leadership strategists said. Questions far beyond mere succession cloud the issue, he said.

“Some people are very good at preparing for the future,” Doudna said. “Many are not, particularly those people who are very driven. They are entrepreneurial, creative and they never take no for an answer. It’s hardest for them.”

For Chuck Haas, a former co-owner of Cobb Manufacturing Co., the issue of whether to pass the business over to his children was decided before he had any. He had grown up around a family business and wanted his children to develop their own careers.   He and his business partner, John Schenken, agreed that neither would let their kids work long-term at the company, which manufactures accessories for automobiles such as drink holders, visors and compasses. Revenues were about $25 million a year, Haas said.

That decision meant that, when it came to planning for their successors, the two had a pair of options: sell the business or hire a general manager who would handle the day-to-day affairs. At first, Haas and Schenken considered selling the company to its top three managers. They weren’t interested, and the owners became concerned that installing a general manager over them would be met with resistance. So they decided to sell to a group of outside investors.

The process took two years, and ultimately was hardest on Haas’ youngest son, who wanted to work at the company, he said.

“He was the only one who challenged it,” Haas said. “He would have killed to be in that business.”

At AmerUs, Godlasky’s promotion has resulted in at least one immediate change: his office. Godlasky moved into Brooks’ former office, which is located on the 20th floor of the Hub Tower and has a commanding views of Sec Taylor Stadium and the Iowa Capitol building.

Brooks said the move was practical because most of the executive team involved in day-to-day management occupies offices on the east side of the building. His new office is on the west side of the 20th floor.

Next week, the Business Record will examine the ways new leaders adjust to their positions and the challenges they face.

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