In these first years of the 21st century, technology
continues to advance in the ceramic industry. Compared to other industries,
however, ceramic manufacturing isn't necessarily in the early stages of its
life cycle, at least in the U.S.
It seems that for every new player that emerges domestically, a handful of
counterparts spring up internationally. But what is it that provides longevity
to firms that remain vibrant within a somewhat mature marketplace?
The first obvious answer is innovation. The
responsiveness of marketers to identify unmet needs, the creativity of ceramic
engineers to design better products, and the discipline of operational
efficiency leaders to sustain profitability all illustrate innovation within
the industry. Yet, some firms fall by the wayside while others endure.
There has to be some other factor that enables American
ceramic manufacturing to remain vital after so many years. Perhaps the answer
can be found in considering the source of innovation-people. Over the last 108
years, Sauereisen, Inc. has experienced and overcome a multitude of challenges,
becoming a successful player in the research and manufacturing of specialty
cements. In the context of business longevity, the Sauereisen story provides an
insightful case study on the subject of succession.
In 1899, at the age of 16, C. Fred Sauereisen formulated
his first product, Insa-Lute Adhesive Cement. Despite having little formal
education, C. Fred was equipped with a working knowledge of ceramic-based
materials, and he found buyers who needed to bond ceramics, metal and glass.
This was the start of Sauereisen, Inc.
Not surprisingly, C. Fred found the going rough as a
"one-man band." Like just about every other successful garage-based
inventor, his need for personnel expansion rivaled the need for product
diversification. Consequently, one of the first major decisions Sauereisen
faced was the issue of company succession.
Whether a business is in start-up mode or boasts an
established track record, critical functions exist that demand the full
commitment of the business' leaders. Certainly there is merit in the model of
hard work illustrated by those who have "pulled themselves up by their own
bootstraps" to attain success, but ultimately it is imperative to confront
increasing overhead and other considerations that result from growth.
C. Fred Sauereisen relied on a select few employees to
tackle tasks such as distributing product and managing paperwork. This freed him
up to focus his energies on formulating, manufacturing and promoting his
products. Without a doubt, a business must maintain financial prudence when
adding to its team, but the upside of what can be accomplished when key innovators
are freed to apply their creative energies shouldn't be overlooked.
The staff and leadership of Sauereisen at company
headquarters in Pittsburgh,
It Doesn't Happen Overnight
Succession isn't a light switch; it must be planned for
in a way that averts unpleasant surprises. The company's leadership must
proactively identify a company's future needs and address them intentionally.
C. Fred's dream of succession included passing the
business on to his three sons, Phillips, William and Ferd. Each generational
transition of a business poses typical challenges, but things were complicated
in C. Fred's case by a larger-than-normal age gap. It wasn't until the age of
46 that C. Fred and his wife, Marion, became parents. Consequently, non-family
members played a key part in the generational transition. George Read was one
of the individuals C. Fred trusted to learn and manage the business as his
offspring developed their own understanding and expertise.
In time, the second generation of Sauereisen ownership
settled into areas matching their gifts and interests: Phil excelled in
administration and industry relations; Will was drawn to personnel; and Ferd
progressed in sales, finance and international partnerships. All the while,
George Read supported the company's technical capabilities and instilled the
managerial discipline that enabled continuity.
A similar pattern played out in the transition to the
third generation. Eric Sauereisen and his cousin, Karl, joined the company in
the early 1990s, working under the tutelage of Patrick Connell, who had
professional management experience from elsewhere in the industry. Having
initially gained experience outside of the family business, the third
generation of Sauereisens worked in various areas of the company prior to
assuming roles as officers in 2002.
Beyond the CEO and Family of Origin
The typical maturation process of a business involves a
move from centralized, closely held decision making to a more participatory
form of management. In this process, leadership should emerge from among
several functional areas and throughout all levels of the company. Put another
way, effective succession encompasses more than just ownership and the pinnacle
of an organizational chart.
Consider the impact of front-line employees or backstage
support specialists. As Ferd Sauereisen, now retired, used to say, "On a
given day, our customers are more likely to be impacted by a front line
worker's absence than my own." Ferd didn't state this as justification to
play hooky, but rather to underscore the importance of those who deliver direct
value to the customer.
Along these lines, Sauereisen, Inc. has strived to build
a corps of multi-functional team players that can assist during peak market
demands. Although such flexibility is sometimes borne out of crisis, the
company's management team frequently establishes cross-training objectives to
ensure personnel coverage for customer-critical areas.
On an even more strategic basis, the management team
annually forecasts staffing additions that will occur over the next year, and
even over a 3-5 year period. These details are part of the strategic plan
reviewed by Sauereisen Inc.'s independent board of advisors. It should be noted
that the basis for projecting new hires is to support business growth, address
changing needs or simply to plan for inevitable attrition.
Fred Sauereisen founded Saureisen, Inc. in 1899.
Putting the Plan in Motion
Amazingly, many companies neglect to consider the major
ramifications of succession planning. All too often, a business shuts down or
is forced to change hands upon the patriarch's retirement or death. In other
cases, major setbacks are experienced when a person of unique creativity or
exceptional productivity leaves the picture and/or estate planning isn't
Two of the most common reasons for unplanned succession
include short-term orientation and potential emotional conflict in confronting
the prospect of personal separation. The first cause for inertia listed here,
short-term orientation, can be at least partially addressed through the
creation and acceptance of a vision for the company. The Sauereisen, Inc.
vision is "to become a world-class provider of specialized solutions
within its industries." In support of this vision, the company's human
resource goal is "creating value for customers by building a world-class
team of committed individuals." Matters of succession help to promote both
the department goal and overall vision.
As for the emotional side of succession planning, it must
be realized that all things in this world are temporary. It's better to
investigate the challenging issues of succession before the need arises rather
than afterward, when turmoil might be excessive. This is a recurring theme
among companies in the family business networks to which the Sauereisens
Moving Forward in an Imperfect World
Succession challenges can arise despite the best of
planning. Vulnerabilities exist that need to be addressed, and the
uncertainties of tomorrow will surely challenge those in a position to face
What is it that will sustain Sauereisen, Inc. beyond its
first 108 years? The answer is simple-people and planning. Bloodlines may play
a role, but it is family in a larger sense that will make the difference.
Yesterday's innovations and sales will only provide benefits for so long.
Ultimate longevity will be determined by empowering the right people today, and
planning their future roles in the company.
For more information,
contact Sauereisen, Inc. at 160 Gamma Dr., Pittsburgh, PA 15238; (412)
963-0303; fax (412) 963-7620; e-mail email@example.com ; or