Before hiring an outside CEO, members of an 80-year-old family business had to confront their own weaknesses - and then learn how to work with their new boss.
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Entrepreneurs: Don, Dawn, Wes and Graham Fleming, Proprietors and members of the board; Chief Executive: Rob Small
Company: Fleming's Nurseries
Business type: Wholesale horticultural products
Founded: 1930s
Employees: 100 full-time
Head office: Monbulk, Victoria
Contact details: +61 3 9756 6105
Website: www.flemings.com.au
The Fleming’s Nurseries Story
'Fleming’s Float’ has nothing to do with the stockmarket. It was the name of Fleming’s Nurseries’ gold medal winning entry at the 2005 Chelsea Flower Show in London, the world’s premier flower display event. The victory made news bulletins around Australia. It was gratifying for an 80-year-old family company that has completed the tricky business of installing its first outside CEO.
Fleming’s wholesales plants and trees, has an orchard and a new business called Habitude, which designs, installs and maintains large-scale landscaping projects.
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Key learning points:
- Succession planning - Honestly evaluate family strengths and weakness. Should family members work in the business - or run it?
- Outside CEOs - When appointing an outside CEO, be clear about who has what role. Family board members should decide strategy; the CEO should be left free to execute it.
- After succession - Be prepared for an uncomfortable settling in period. Everyone must get used to their new roles.
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Until 2004, the business was run by the Fleming family. Eric John Fleming began to grow plants in the 1930s in the gentle hills around Monbulk on the outer eastern edge of Melbourne.
Don Fleming and his wife, Dawn, acquired the business by 1983 as Don’s brothers died, retired, or decided to sell up. After running the company for almost 20 years, Don and Dawn and their sons Graham and Wes were looking at creating a professional, long-term succession plan. They decided it was time to consider a new management model and in May 2004 they appointed an outsider, Rob Small, as chief executive.
Wes Fleming is pragmatic about the need for a professional outsider. "We have a family tradition that we’re very proud of. We are a company that employs 120 people from our local community; ensuring that Fleming’s Nurseries is here in the future is one of our main objectives. We need to protect that from any possible generational weakness."
Small was general manager of environment and recreation at the City of Geelong. He was considering CEO positions when Wes met him at the 2001 Ellerslie Flower Show in New Zealand. Wes says: “I told him we were two years away from needing a CEO. So Rob took a council CEO job. Then, in January last year, I got an email with the subject heading ‘Australia’s Oldest Apprentice’.” Small wanted to quit local government and the Flemings were ready to try an outsider.
Graham Fleming says hiring Small enabled the family to focus on what they do best. “We had too much work. It made more sense to get help with the business rather than more help with the nursery.”
None of the Flemings have much formal business training but Small praises their business instincts. “Most good business learning happens practically in the business. Often the solutions we decide on as a company are generated by the board, based on their experiences - and you never want to throw that away.”
The board consists of Don, Dawn, Wes and Graham Fleming. Graham chairs the meetings and Small’s role is to provide balanced information for decision making. Small says: “If I am asked for my opinion, I give it with the caveat that the matter is a board decision. I don’t have a vote.”
Ultimate decisions on the direction of the company, such as the creation of the new landscape business Habitude, rest with the board. Management of the business is Small’s job.
The family is still active in the business, which can be tricky. Small says: “The role of the family changes when they work for me as managers. There is inevitably some blurring of these functions, but as time goes on this is getting easier.”
Graham says: “On a day-to-day basis, the whole family now works for Rob because we are still very active in the business. It was very difficult for the family to come to terms with - especially the older generation. But it’s a commitment we had to make and we’re working together better as a team now than we ever have.”
Small says that having a non-family CEO separates governance from business management. “It gives the family the ability to collectively determine the direction of the business but it allows the business to develop its management competence within that framework. It ensures that the business is more robust and durable.”