The third generation of a family business approaching $50 million in sales has a big challenge: Maintain the culture while modernizing the company.
In 1973, Sam Whitney created a novel way to advertise his startup trucking company that hauled phosphate out of west-central Florida mines.
Whitney saw an unmet need, particularly in phosphate-heavy Polk County, to drive the materials the last 10 miles or so to plants — a route area rail lines didn't handle well. Whitney got in his truck, with the name of the company, Trans-Phos, plastered on the side. He drove up and down the road with all the phosphate plants, more than a dozen possible customers.
Whitney did that all day, every day, until the name sank in, says Neil Whitney, a grandson. Eventually mining companies began to hire Trans-Phos. “He was a real character,” says Neil Whitney.
Customer acquisition is no longer the chief challenge at Mulberry-based Trans-Phos. When Sam Whitney's sons took over the business in the 1980s, it successfully shifted from hauling mostly phosphate to hauling mostly construction materials. Trans-Phos officials project the company will grow revenues at least 20% this year, and surpass $50 million. It has 150 employees and a fleet of 200 trucks. “Anything you can put in a dump truck,” says Neil Whitney, “we can haul it.”
The core challenge, now, is on Neil Whitney, 35, and Chris Whitney, 32, another grandson. The younger Whitneys, first cousins, became the third generation to take ownership of the firm in February. Their mission is to accelerate the growth of the company, through tasks such as going from paper to computers and updating the website, while maintaining the folksy customer-oriented culture that built it. Making matters trickier: The third generation transition of a family-run business, according to several studies, trips up many companies.
“We are eager to modernize our business,” says Chris Whitney, Trans-Phos president and CEO. “We don't want to come in and let the company run itself. We want to put systems in place that make it sustainable.”
A big modernization step is a new software program that connects drivers to dispatch personnel and links salespeople to accounting and other departments. It cost $200,000, and took Trans-Phos two years to find the right customized version. “There weren't any out-of-the-box software programs that worked for us,” says Chris Whitney.
Chris and Neil Whitney, an executive vice president and the COO, say the hardest succession-centric challenge for many employees is simply that things are different. To overcome that, Neil Whitney, who oversees the fleet and facilities, among other roles, and Chris Whitney had multiple one-on-one conversations with employees before changes.
Another big challenge for the firm, beyond succession, is one many trucking companies face: to recruit and retain top drivers. Trans-Phos recently updated its referral bonus program to compete better there.
The third-generation Whitneys not only have the company's future at stake — they also put their own future at risk. Chris Whitney says he and his cousin “leveraged ourselves up” when they bought ownership of Trans-Phos from their fathers, in a methodical in-house succession process that goes back four years. He declines to say how much he or Neil Whitney paid for their stakes, only it was “enough to be uncomfortable.”
The cousins worked in virtually every part of the company while growing up, something they both say is an asset now. Their experience helps them address issues quicker, and empathize with employees' concerns. It also helps employees adjust to new owners. “It's pretty cool that through all this,” says Chris Whitney, “our company's commitment to service hasn't changed.”
— Mark Gordon