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When Wynn family patriarch Don Wynn retired years ago, he sold three buildings to fund his retirement.
Today, his five children are approaching their own retirement, a situation that is proving to be much more complicated because there are 17 people in the third generation.
How do you plan for succession in a family as big as the Wynns?
“We do not want to put the burden on the next generation by collecting every dime until we die,” says Jerry Wynn, one of the five members of the second generation.
Jerry Wynn says his father turned over control to his five children a long time before he died, as a generous gesture to his children and to ensure the future success of the business. Over time, the patriarch had given his five children shares totaling 49% of the business, enabling them to have the money to buy the remaining 51% of the business when he retired. That, combined with the sale of three grocery stores to Kroger, gave Don Wynn enough to retire comfortably.
But now the situation is much more complex.
Besides the fact that each of the five members of the second generation needs to plan for retirement, there are 17 people in the third generation who will inherit the Wynn Companies. Linda, who is in her 50s, is the youngest of the second generation. Larry, 65, is the oldest.
Each member of the second generation owns 20% of what are four companies: Sunshine Ace Hardware, Wynn's Market, Wynn's Catering and Wynn Properties. Combined, the companies' revenues totaled more than $28 million in 2012 with 230 employees. The five owners also are the sole voting members of the companies' board of directors.
The members of the second generation draw salaries and collect income from trusts they established to pass their ownership stakes to the third generation. To care for their surviving spouses in case they die, the second generation purchased life insurance for their benefit.
In the meantime, Jerry Wynn says all of the second-generation children have set money aside for their retirement through various investment vehicles ranging from 401(k)s to real estate. “We'll each decide at which time to retire,” says Jerry Wynn.
However, Wynn says the decision of when to retire changes depending on various factors, and sometimes those change. “What's going to happen to my health care?” he wonders. “What seemed like an easy proposition now has gotten a little more cloudy.”
To keep the board to a manageable size of five people, each of the five children of the second generation has named one person in the third to be a voting member of the board in case they die or when they're ready to hand over their share of the businesses.
To make that transition go smoothly, the members of the second generation have invited three individuals from the third generation to sit on the board as nonvoting members. One of them is Michael Wynn, 40, the president of Sunshine Ace Hardware who also serves as chairman.
Of the 17 in the third generation, so far only three are involved in the Wynn businesses. “Part of it is they grew up watching their parents work really, really hard,” chuckles Michael Wynn.
What's more, Wynn family members are expected to start at the bottom of the corporate ladder and compete for jobs with non-family members. For example, Katie Wynn, Jerry Wynn's daughter, was passed over for promotion to be the manager of one of the company's hardware stores in favor of a better-qualified outsider.
“I started at the lowest rung sweeping floors, bagging groceries and being cashier,” says Michael Wynn. He still holds the record for most hours worked in a single week: 105.
As members of the third generation prove themselves, they are promoted to increasingly important positions. For example, the board recently voted to elect Jeff Wynn president of Wynn Properties. Jeff is the son of second-generation owner Tim Wynn. Katie Wynn was recently elected to the board.
The institutional knowledge is written down. “We've tried to build documented systems about everything we do,” says Michael Wynn, who plans to build the business to $100 million annual revenues. “It takes a lot of time, but it's critical.”
The Wynns take family trips, such as cruises and fishing trips. These will take on greater importance as the family grows larger. “It reminded us of the value of getting outside the business and reconnecting,” says Michael Wynn.
Core Values
To help enshrine corporate values through the generations of the Wynn family, employees recently helped the family create what it calls core values. “These will be guidelines for the third generation,” says Michael Wynn, president of Sunshine Ace Hardware.
Once a year, employees will answer a survey to judge how well the company is complying with its core values. Wynn says it's another way to keep the family and top executives accountable.
Here's a list of the Wynn company core values:
-Be humble
-Create solutions through imagination
-Support each other
-Deliver sunshine
-Care for your neighbor
-Own it
-Inspire confidence
-Build honest relationships
-Love, laugh, work hard
-Drive results
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