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Thoughts on Second Generation Business Ownership

3 min read

Mary Jo Johnson

The company my dad started has always been a part of my life as he started The EO Johnson Company the year I was born.  All those years growing up I never thought that one day I would take his place and be a second generation business owner.

The whole topic of second generation businesses is interesting, and the statistics can be a bit frightening:

  • Less than one-third of family businesses survive the transition from first to second generation ownership.
  • Another 50 percent don’t survive the transition from second to third generation.

What do I (and I am sure other second generation business owners) think about when it comes to our parent’s legacy and the businesses they created?  Here are a few of my thoughts.

Dad and businessman

My dad, Emery O. (E.O.) Johnson, was an amazing man.  As I was growing up he was simply my dad, a terrific father who went to work in the morning and came home to his family at night.

At some point in my young adult years I started seeing him as the extrodinary business man he was.  It was a real priviledge to see both sides – to learn from the businessman while loving the family man.

Experiencing the company

I wasn’t groomed for the business nor was there ever any pressure on me by my dad to stay in my hometown and work for his business. I believe that is one of the characteristics of a successful transition to second generation business success.

I’ve witnessed it first hand and have seen it in other businesses – where children work outside the family business before joining it the chance of second generation success is greater.  And, once they join the business the children work in a variety of jobs to really learn the business from the ground up.

That is my story at EO Johnson.  I was making a career in business insurance far away from my hometown when one day my dad asked for my expertise in starting a new department in his business.

Once in the company, I did the job he asked and then started doing other jobs in different parts of the overall operation.

I loved it, and before I knew it I was moving up the management ladder and internalizing that same passion my dad had for The EO Johnson Company.

The leadership role

I don’t know if anything can really prepare you for the day you become CEO of the company your parent built.

Although I knew the management team my dad had in place very well, I was uncertain as to how they expected me to lead.  Were they expecting me to be a mini E.O. and lead like he did?

It didn’t take long for the message to get through to me that they wanted ME, not a mini version of my father.

They wanted what I brought to the table and what I had learned inside and outside the company.  And they were ready and willing to be a true team and walk with me in leadership.

The bottom line

There are two other points I find true in second generation business successes:

  • Leadership operates on a set of agreed upon principles that pass from one generation to the next.  At EO Johnson these are our Core Values and are rooted in something we call Customer Vision.  My father was adamant – that we see the business through the eyes of the customer and act as a team to exceed their expectations.  That is EO Johnson’s Customer Vision.  E.O. said many times that if a customer honors us with their business we owe them the best in customer service.  Those words still guide how we view customer service.
  • The family must want to continue.  This is really the bottom line.  That passion to continue the businesses drives the hard work that has to be done for the business to succeed.

Family businesses generate over 50 percent of the US Gross National Product (GNP).  That means family owned businesses touch a lot of people, and the topic of second generation family business success/failure is an important one.

For me it is not only very important but personal, and I count leading the company my father created as one of my greatest blessings.



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