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Business: FrankCrum, Clearwater
Generations: Four over 33 years. The late Frank Crum Sr. and his son Frank Crum Jr. founded the firm. Crum Jr. works there now, along with his children Haley and Matt Crum, and his granddaughter.
Family Ties: Frank Crum Jr. began to seriously focus on a succession plan in the late 1980s, when two of his children, and potential successors, were in elementary school.
“I've spent hundreds of hours on this,” says Crum, president and co-founder of Clearwater-based FrankCrum, a human resources outsourcing, employee staffing and insurance firm with $1.2 billion in 2013 sales. “This whole company was built for them to take over.”
“Them” at FrankCrum is Frank Crum's daughter, Haley Crum, and his son, Matt Crum. Haley Crum, 32, is president of FrankCrum Staffing, while Matt Crum, 29, runs Frank Winston Crum Insurance. Both are units of Frank Crum. A third Crum sibling, Hope Taylor, 42, is a special education schoolteacher. Taylor's daughter, and Frank Crum's granddaughter, Heather Sparrow, 24, works in human resources at FrankCrum.
Haley and Matt Crum say working in a family business at times is distinctively challenging, and the executive-level decision-making process occasionally gets emotional. But they also say a family business is an irreplaceable experience. “We are all pulling in the same direction,” Matt Crum says. “It's how we get there that's sometimes different.”
Adds Haley Crum: “I love working for the family business. It's a unique dynamic.”
That passion is one of several reasons why a lot is at stake in the generation-to-generation transition plan. Founded with $25,000 in 1981 by Frank Crum and his father, the late Frank Crum Sr., FrankCrum is one of the largest privately held businesses on the Gulf Coast. It has 200 internal employees, handles payroll and other services for nearly 95,000 employees and is a philanthropic leader in the Clearwater area and Pinellas County business community.
Frank Crum's succession approach splits into two parts.
One is inside the firm, where he mentors and monitors Haley and Matt Crum. Haley Crum worked in restaurant and hospitality for a few years before she joined the business in 2007. She started at FrankCrum in a customer service role, worked her way up through several promotions and is now studying for a law degree. Matt Crum began working at FrankCrum in 2008, soon after he graduated from Trinity College in Hartford, Conn., with an economics degree. He has since earned an M.B.A. from the University of Tampa.
Mentoring his children, to Frank Crum, is a tough-love process. “I see my role as making sure I'm hard enough on them,” Frank Crum says. “I have to make sure they can do the things no one wants to do.”
The second succession part is the strategy. Crum began to form his plan in 1987 in a meeting with his financial adviser. He has since met at least twice a year with a group of succession advisers that includes the financial planner, his CPA, and most importantly, he says, his estate attorneys. The meetings are time for Crum to update, revise and think through the entire succession plan.
A constant element, says Crum, is to have sufficient life insurance to pay the estate taxes after he dies. Crum also stresses the succession plan has to lookout for the business. That's why he constantly evaluates the work his children do at FrankCrum, from financial results to leadership tasks. Says Crum: “You have to make sure the people you leave in charge can actually handle the work.”
The thorough plan has one hole: Frank Crum, 64, has no date in mind for when he will leave the business. His children think that day is well into the future. “I don't see my dad just going to the beach,” says Matt Crum.
Frank Crum is more philosophical, if non-committal, about when he will leave the business. “My goal,” he says “is to have my role diminish over time.”
Follow Mark Gordon on Twitter @markigordon
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