Is it the war for talent or is it really about the race for leadership?
by Mike Felmlee
Interview with Brian Mathiowetz, CEO of Mathiowetz Construction
We’ve been talking about the war for talent for some time now. One of our manufacturing clients put it this way the other day, “We simply don’t have enough people for the jobs we have today. And, it’s only going to get worse.”
Or, is it really the war… or better yet … the race for leadership? In this age of transformation, finding and nurturing leaders with solid leadership skills has never been more important. Success requires constant reinvention and leaders simply have to be vigilant in adapting to the shifting needs of their customers and markets, quickly.
Advances in technology, good as they are and necessary, actually dampen our so-called competitive advantages. These advances are already transforming many industries today, creating big challenges in who we hire and how we develop and retain them. And, the costs of not doing this well are staggering.
We’ve seen the impact from these changes on our publicly traded companies. Current projections suggest that 50% of the S&P 500 will be replaced in the next ten years. While changes in consumer tastes and mergers and acquisitions account for some of this change, we suggest poor leadership underlie most of these exits.
In addition, family-run, privately-held businesses, the backbone of the U.S. economic engine, suffer as well. Why do only 30% of them pass to the second generation and only 12% ever get to the third generation? Why is it so hard to transfer these critical leadership skills to the next generation?
We had the opportunity to speak with Brian Mathiowetz, third generation owner and CEO of Mathiowetz Construction, about leadership and the challenges of transferring these skills to the next generation of leaders of their family-run, privately-held business.
MF: Warren Buffet suggests the biggest issue in family-owned businesses is that they get stuck doing things the same way they have operated for years even when the business outgrows that structure. The main cause is that the founding generation holds on to the reins of leadership too long and won’t pass control to their children.
What did you learn about leadership from your father that you were able to apply when you took over the reins of the family business from him?
BM: I learned the value of relationships from my father. Strong relationships with our customers, vendors and especially with our people and their families is critical to your success. I found leading people well is not automatic, no matter how gifted you are. You have to become a part of them, feel with them, know what they live each and every day. By being genuine, they will climb the mountain with you.
I am not as intense as he was. I am more deliberate and listen better. His generation was comprised of hard-charging individuals, and people responded to that and were okay with that. Today, people are offended if you raise your voice. They are more aware of what their options are and are more selective in their employment choices. There are better ways to motivate today’s leaders and employees.
MF: Succession planning is very challenging, especially in family-run, privately-held businesses. It’s hard to imagine that more than 40% of American family-run, privately-held companies are facing succession issues today and have no succession plans in place.
How are you getting your children ready/prepared for the burden of leading the company when you step away from the business?
BM: One way I’ve done this is requiring my sons to start at the bottom. I sent them into the field to work with our construction teams. I put a shovel in their hands and a few Band-Aids in their pocket to cover the blisters that resulted. They did it all, every dirty, tough job we had. The worst (or best) experience was washing our heavy equipment fleet at the end of the season. Over 300 units all had to be steam cleaned. Try holding a 3,000 psi wash wand for 10 hours straight. Your arms go numb. After earning the respect of our people, they were given more responsibilities. They both had six years of field experience before they got into the office. That purged the ‘silver spoon’ syndrome, and they could then work side-by-side with our leaders and learn and grow. Now, after working alongside our best leaders the last six years, they can enter the conversation because they have earned that right…it was not given to them. Getting them ready to lead the company has actually been a 15-year process.
My two sons are eight years apart and so we have to pay attention to that. Field leadership and project supervision were key parts of this succession experience. Living on the project (hotel), being responsible for crews, knowing that you need to be the first one there at 6 a.m. every morning, and likely the last to leave at 8 p.m., was a tremendous growth stage for both of them. They got to know the expectations of owners, government agencies, and employees and learned to deal with the frustration of weather and other challenges out of their control. It was truly growth by fire. They are both very motivated to learn and do what it takes to keep the company strong and progressing. We have put them through several personal and professional evaluations to determine their individual strengths and weaknesses: an Industrial Psychologist, The Strozzi Institute, Prouty L3 Leadership program, AGC Blueprint series, Prouty Strategy and Leadership Coaching, and numerous seminars and learning opportunities. We will likely have a father/son retreat experience in the future to be sure we have not missed anything.
MF: Any other words of leadership wisdom today?
BM: We have always stressed the importance of staying humble and connected to our employees. Yes, that requires sacrifice. Instead of going to a concert on Saturday, you may be attending a wedding or funeral of our extended employee family, or you might have to take a call from one of our folks who is all worked up over something and they just need to vent and someone to LISTEN. Leadership takes effort and paying attention to the details, and the details include both life and work.
It is always a great affirmation for me when we have our mandatory company-wide meeting. I like to get to the parking lot for a quick look around. It gives all of us great satisfaction that many of our people are driving vehicles much nicer than what we drive. Just because we lead a successful company, we don’t need to show it off or make it obvious… stay humble. Let them show our success off for us. All this takes good communication to be sure that you are all on the same page with your company culture.
Family meetings on a regular basis… at least quarterly, are a must. Be sure you have talked about your core values and your shared MISSION. That will assure that your culture is strong.
Culture transcends generations… that is the Holy Grail of passing on your family business.
MF: Thank you, Brian. We wish you and your family the best as you entrust your company to the fourth generation and beyond.