Long-term businesses carefully plan for next leaders who will continue company legacies

When the owner of a generational business is ready to hand over the wheel, it’s not a simple process that only involves tossing the keys to the next in line.

Strategic succession planning is vital to ensure longevity, and the transfer of leadership and ownership can be complex. Owners might be looking out for family members’ interests, but the process involves a delicate balance so both their successors and the businesses they’ve developed have long-term success.

Gretchen Kalk-Castro, a partner at CLH, CPAs & Consultants, said the timing of succession planning can vary from business to business. The defining factor often comes down to how involved the next person in line is.

“If someone is already working there, they’re already the VP, I think it could be less time,” Kalk-Castro said. “But if you’re bringing your kids in, and they’re 25 and very new to everything, I can see that we can need a 10-year window to make sure they understand the business.”

Kalk-Castro has a strong understanding about succession plans. She not only assists clients with those types of transitions in their businesses, she’s also been through the process.

Kalk-Castro started at CLH, CPAs & Consultants, which has offices in La Porte, Michigan City and Valparaiso, as an intern in 2000. She worked her way up and was named a partner there in September 2023.

She said she was well-prepared for her new role because she was extremely involved in the business before becoming a partner. She already knew a variety of managerial aspects of the business, including how it’s run and the ups and downs of the business.

Understanding those details are critical when selecting a successor.

“So, we really want them to teach that to their children or whoever is coming on,” Kalk-Castro said of business owners.

She said, at a manufacturing business for example, a longtime worker might have a significant background in the shop, but they need to know more than only that before becoming a business leader.

“They’re going to need to learn how the taxes work; they’re going to need to know why they purchase (certain) equipment and not (others),” Kalk-Castro said. “So, bringing on somebody (new) is something that you need to make sure this person totally understands everything about the business side of it.”

If an eventual successor needs managerial experience, sending them to classes is a good option, she said.

“I think leadership training is always important, so they understand what they’re getting themselves into,” she said.

Continuing legacy

Jeff Berglund, president of the building division and chief growth officer of Berglund Construction, understands the importance of gaining experience with a family company.

Berglund Construction is a fourth-generation family-owned business that started in Chicago. Jeff Berglund’s father, Fred Berglund, is the CEO of the company. The company opened an office in Chesterton in 1998 and has locations in Ohio and Wisconsin.

Jeff Berglund began working for the company when he was about 13 years old. At that time, he spent his summers handling upkeep in the yard operations. That included general cleaning, sweeping and painting.

He later became a laborer, and he said that helped him become a more effective leader of the business.

“Because there’s many people who worked here for a long time who saw me do that,” Jeff Berglund said.

Now as a leader of Berglund Construction, Jeff Berglund has encountered workers who remember him sweating and working hard on jobs.

“There’s a level of respect that at least I was out there, and I understand what they go through each day,” he said. “And it’s made it that much more impactful to be in a leadership role and have that credibility throughout the company.”

And while Jeff Berglund is a leader at his family’s company, there was a time in college when he explored other career paths. He said he even told his father he didn’t intend to go into the business.

“I think that’s kind of necessary that you have to rebel a little bit,” Jeff Berglund said. “You have to kind of go away and look at other things to know what you want to do and come back.”

That lasted a few years before he realized the great opportunity he had to continue at Berglund Construction. He also knew he would regret it if he didn’t give it a shot.

“So, I joined the business, and I’m very glad I did,” Berglund said. “I love it, and I’m very glad to carry on the family tradition.”

When Berglund was deciding what he wanted to do with his future, his father explained that Jeff would have the opportunity to mold the company and pursue the things he wants to do and is passionate about to put his stamp on the legacy.

“That’s the history of the company,” Jeff Berglund said. “Each generation that’s come in has grown it and diversified it. Whether it’s in the services we offer or the geography we serve, so, it’s both an awesome and humbling opportunity to think it’s now my turn to consider what the next 40 years of the company look like.”

Berglund said one advantage of being a family-owned business is the ability to make major decisions for clients much quicker than companies that have a sprawling ownership group or are part of a larger entity.

Clients can pick up the phone and talk to the family if they need something special done or if they have issues.

“They don’t have to navigate some big corporate entity or shareholders,” Berglund said. “If something is outside of our standing operating procedure, but it would service a client well, we can make the decision pretty fast. It’s not something that all of our competitors can do.”

He said Berglund Construction understands decisions made today aren’t just about making an immediate profit, but continuing a legacy that’s been around for more than a century.

‘Born into it’

Jeff Berglund isn’t the only one who gained experience while working for a family business. Joe Moke is the owner of The Moke Agency, which is affiliated with the Weichert Realtors franchise.

He got his start in real estate while working with his father, Clarence Moke, who formed Moke Realty in the early 1970s. Clarence Moke learned the business from his father-in-law.

“I was just born into it,” Joe Moke said of real estate. “We were always doing real estate stuff. It was my dad’s part-time job. He was a full-time mill employee. I don’t know how he did it.”

He recalled helping his father as he managed and sold U.S. Department of Housing and Urban Development (HUD) properties.

“During that time in Gary, there were lots of them,” Joe Moke said.

While taking classes at Purdue University Calumet (now Purdue University Northwest), Joe Moke decided to get his real estate license as a surprise to his father. In addition to his college work, he attended night classes for real estate, and he received his license in 1992.

“I put it into a card and gave it to him on Christmas morning,” Joe Moke said.

After graduating college, he had a decision to make, and he ended up taking control of Moke Realty. He knew it wasn’t going to be easy.

“It was almost a bankrupt business,” Joe Moke said. “He wasn’t really participating in it very much … we weren’t making any money.”

He said the business struggled for a while until an opportunity for a HUD contract was available. Moke Realty bid on the contract for the entire state, but Moke didn’t land the job.

Still looking for an opportunity, Moke called the person who won the bid. It turned out the company needed help, so Moke Realty became the broad listing broker for the HUD properties in the Northwest Indiana area.

That led to Moke Realty’s prominence in the Region. In 2018, Joe Moke joined the Weichert Realtors franchise as The Moke Agency. That decision allowed him to grow his business. He had about five brokers when he franchised, and now he has close to 30 working out of his Crown Point office.

Another person working in that office is his 19-year-old daughter, who’s an assistant there. She’s considering getting a real estate license but hasn’t decided yet.

“So, she would be the fourth generation in my family to be a Realtor,” Joe Moke said.

Consulting expertise

As companies transition into leadership, there are many occasions in which former business heads stay with their companies after their successors take the reins.

Kalk-Castro said that setup provides a way to help new leadership if they have questions. It can also be beneficial to clients who are accustomed to working with the former business leaders to know they’re still around to help when needed.

Jack Ferrino, a second-generation developer, continues to receive advice from his father, Rob Ferrino, after starting 219 Development Services in 2021.

Jack Ferrino said his father had construction and development firms in Illinois. About 10 years ago, he started doing work in Northwest Indiana.

“We saw where the market was heading, really just fell in love with the market, the people, everything that it had to offer,” Jack Ferrino said. “My brother and I decided that we really wanted to get our companies, so, as my dad began shutting down his companies on the Illinois side, we started our companies, and he’s now acting as a consultant for us, and we’re very blessed to have that expertise behind us.”

As Jack Ferrino runs 219 Development Services, his brother, Michael Ferrino, is leading Bauer Construction Services, both in Hammond.

Jack Ferrino said he was always around construction and development. He remembered being in his father’s office while growing up and then working in the field when he was old enough.

“You have to start at the bottom, obviously, and work my way up,” Ferrino said.

After graduating from Purdue University with a degree in construction management and a minor in real estate, Jack Ferrino interned with his father to learn more about the real estate side.

He said his experiences of working in the field and moving his way up taught him “what hard work means” and what it takes to get a job done. He said he’s a better leader now because of it.

“I think that’s the best thing my dad could’ve done for me,” Jack Ferrino said.

Read more stories from the current issue of Northwest Indiana Business Magazine.