Family Business

by Passenger Service: State troopers ride-along with truckers in crash study

When Vito Corleone handed over the family’s “olive oil” business to youngest son Michael in the 1972 movie The Godfather, one individual played a vital role in helping the new successor keep America’s most powerful and high-profile fictional family business together. While the foundations of the Corleone empire were built on the strength of the family’s bloodline, it was Tommy Hagen, the adopted son without a branch on the family tree, who served as consoliere-the family’s primary business consultant, confidant, and perhaps most trustworthy ally. This “outsider” was the employee the boss turned to for the most important financial decisions, for an objective opinion in family frictions, and succession planning.

Although Transport Guilbault has as much relation to “olive oil” as sugar does to gas tanks, this Québec City-based family-owned fleet shares one unique characteristic with the Corleones: the anchoring support of a non-relative-an outsider. With a full understanding he will likely never sit at the top of the organizational chart, Transport Guilbault CFO Jean-Paul Fortin has devoted the last 20 years making sure whoever does will be a worthy successor.

Moving children through the ranks of a large family company is a delicate and difficult job. There are questions about whether they are qualified to lead, have the passion, and can overcome the pressures of being the boss’s kid. There are concerns about how to guide children up the ladder without alienating non-family employees at the company.

Complicating matters, the lines of succession at Guilbault are as yet unclear. Founder Paul Guilbault started the company with a single truck in 1929, and in 1972 passed the torch to his son Jean and son-in-law Michel Gignac. If the 1330-unit fleet is to thrive in its third generation of family management, the responsibility will rest with Michel’s son Eric, daughters Julie and Isabelle, and Jean’s daughter Nadine.

“I took them all aside, without the fathers even knowing anything about it, and we had a meeting,” says Fortin, a small, silver-haired gentleman in his mid-50s. “At this meeting, I said to them, ‘What do you want to do in this company? Make your bid now.’ From there I took all their feelings and ideas and transmitted them back to their fathers.”

Acting as the bridge between generations, Fortin helped the four children find their place at the company. Knowing Eric, for example, would never be passionate about succeeding him as the company’s chief accountant, Fortin used Eric’s childhood dispatching experience as a segue into the operations department. Today, Eric is vice-president of operations and sales, and likely the top contender for the throne in Québec City. His sister Julie is director of human resources, and cousin Nadine is general manager of pricing.

It was clear that wherever they started, they wouldn’t catch any breaks. “We started in departments where we could get experience and move up slowly,” says 35-year-old Eric, as he folds his massive hands on his desk and leans forward. “We were no more important in our departments than the other workers. If we didn’t do the job, they would have gotten rid of us. We have to prove ourselves to the bosses and to our co-workers like everyone else. Even more, maybe.”

Although different in character, the dynamics between Gignac and Fortin are evident as they sit across from each other in Eric’s Montreal office. Fortin is calm and soft-spoken, experienced and reflective. Gignac is excitable and eager. They are like student and teacher, and for brief flashes, like father and son.

It’s important that their relationship works. For years, Fortin has been the man to whom the owners have turned for help with major company decisions. He’s been an outside mediator, lending an objective viewpoint to inter-family disputes. His detached role excuses him from being clouded by emotions when making business decisions or setting strategies. It’s a role too vital to be lost in the transition from one generation to another.

Fortin has also helped alleviate some of the sting that comes with parental criticism. After all, it’s not just your boss who is casting a critical eye, but your father, too. “To make a company grow, you must get views from the outside,” Gignac says. “If you run it straight from the kitchen table, then it will never grow. The most dangerous thing for a family business to do is make decisions on the family alone.”

It takes a special kind of person to be the family confidant, says Stewart Henderson, a Calgary-based estate planner who works closely with the Canadian Association of Family Enterprise (CAFE). It requires someone who knows the business and is close enough to the family while accepting that he is not fully part of it. He must be efficient in his role as an executive officer, but also a nurturer for the next generation. Henderson believes the reason why so many family-run businesses fail is because successors are usually thrown into their roles as leaders, without any preparation or support from non-family managers. In other words, they get the job by default.

Moreover, Henderson says, many family companies are not able to clearly define the differences between business and family decisions. He says he has made a career of helping family businesses start formalizing meetings and priorities somewhere other than the dinner table.

“What you have to do, for example, is set up a management team to handle management decisions, a board of directors to handle ownership decisions, and a family council to handle family decisions,” he says. “With a governance in place, it takes some of the ambiguity out of your decisions.”

Such a system is critical when succession issues arise. Picking the ripest apple off the family tree without spoiling the whole orchard is a risk company owners take too readily. “Are you making the decision as a father, as manager, or as an owner?” Henderson says. “The child who gets picked may take the decision to be based on merit while the ones who don’t may think the decision was made because their father doesn’t love them.”

It’s tough to balance the best interests of being an entrepreneur with a business and being a father supporting his child. You must be able to look your kid in the eye and explain why he didn’t get the job from a business perspective, Henderson says, and then put your arm around him and offer consolation as a father.

Anybody who has ever lived in a household with one or more siblings knows how brothers and sisters will compete for everything from the last Eggo waffle to mom and dad’s affection. Any decision, with or without consultation, will sting the child on the losing end. “The most important thing for us is to see the family and business grow,” Eric Gignac says. “If we’re all shareholders, it’s in our best interest to appoint the right person as CEO, even if it has to be an outside party. Business is business.”

That objective approach-formalized years before the elder owners plan to retire-is the right one, says Tony Canale, a succession-planning specialist with the Toronto-based business consulting firm KMPG. Many owners avoid the difficult selection process by simply appointing the older son as the new leader. “Usually the eldest gets the job. But the eldest may not be the best,” says Canale, who conducts a series of interviews, competency, stress, and behavioral evaluations to help an exiting owner answer questions of just how their son or daughter will handle life at the top. “Sit down with your outside consultant and identify the potential leaders. Then, look for the holes and weaknesses and upgrade his skills, or bring an outsider into the picture to bolster those weaknesses.”

Moreover, the pressures for a child successor whose objective is to maintain the standard of excellence his parents brought to the company for decades can be just as, if not more, overbearing. But these same demands can also deliver certain rewards that presidents and CEOs at public corporations will only savor at the slightest levels.

“For multiple generations, it’s instilled in them that the business is something of a family heirloom, or legacy, and whoever is going to control it becomes the steward of that asset for the next generation,” says Stewart Henderson. “Their responsibility is not only to the shareholders, but to continue building for the next generation so that their kids’ kids will have something to build on as well.”

As a teenager who gave up his summers to learn how to walk his father’s path, Eric Gignac was constantly reminded by his peers how his life was already perfectly laid out for him. For Gignac, however, working for Ma & Pa Inc. left little room for mistakes. “Everybody thought when I was 18 and just finished school that I was going to have it so easy and safe because one day I was going to have my father’s big job,” he says. “Well, you wouldn’t believe that the hardest thing I ever did in life was work for my father. Sometimes it was like a nightmare, because not only are you trying to prove yourself to the other workers who think you’re only there because of who you’re related to, but you’re trying to prove yourself to the boss, who is your father, too.”

Gignac says the support from his family and people like Jean-Paul Fortin is what kept him on the right track. He feels challenged and invigorated by the responsibility of building a successful family legacy. To him, the family name and its prominence in the trucking industry is one of the only aspects of work he takes very personally.

As he talks about the future of his three-month old daughter Gabriele, Gignac perhaps shows the first sign of uncertainty. It is the first time he has really thought about his daughter’s future stake in the family business. “If she decides to do something else, then for sure it will be hard on me, but I will have to accept it,” Gignac says. “Who knows? Maybe she will be happier not having to work for her father like me.”

Or maybe daddy’s little girl will one day be Transport Guilbault’s first female president.


Have your say


This is a moderated forum. Comments will no longer be published unless they are accompanied by a first and last name and a verifiable email address. (Today's Trucking will not publish or share the email address.) Profane language and content deemed to be libelous, racist, or threatening in nature will not be published under any circumstances.

*