Third-annual forum addresses challenges in critical business issueEditor’s note: This story is drawn from a Nov. 6 Business Journal conference that focused on how La Tortilla Factory planned for and accomplished an internal transfer in leadership using external resources. The conference included La Tortilla Factory’s Chairman Carlos Tamayo (keynote speaker); Jim Andersen, partner at Andersen & Company CPAs; Bill Schrader, president of Exchange Bank; Jeff Menashe, CEO of the Demeter Group; and Dan Cohn, partner at Farella Braun & Martel, as moderator.
NORTH BAY – It took five years and a lot of work and soul searching, but La Tortilla Factory of Santa Rosa has a plan in place to keep the 31-year-old “dream” in the family.“Our parents had sacrificed so much to get us in the business, and I wanted to keep it for them, to honor our parents,” said Carlos Tamayo, currently the company chairman.
Though today it has 175 employees and $30 million in sales, La Tortilla Factory “began as a dream” – the vision of his parents.
It was succession planning by the Tamayo family and company executives that is giving that dream the best hope of staying alive.
Mr. Tamayo was the keynote speaker for the third-annual business succession forum hosted by the Business Journal, along with Andersen & Company, an accounting firm in Santa Rosa.
La Tortilla Factory and its recent successful succession efforts took center stage as a group of experts talked about the importance of having a good plan as well as the struggles that are inherent in the process.
Mr. Tamayo opened the event with his succession plan story and a history of the company.
Open since 1977, the mom and pop company grew to become a leader in its industry.
“We have always been a company that promotes learning and knowledge as part of our culture,” said Mr. Tamayo. “Our strategic culture is being a learning organization.”
Steps were made along the way to ultimately help out in the succession process. In 1987, the family hired a business psychologist to come in and help the team to listen and manage their feelings, to assist them in learning to negotiate and compromise and to work together but have space.
When they thought of selling the business an important step for the Tamayo family was to determine what everybody wanted for the family legacy, which is how they ended up deciding to keep it in the family.
The family members developed a buy-sell agreement in 2003, completed their strategic plan two years later and in 2006, hired an executive coach.
This last step proved to be an important factor in the process, allowing for more open communication between family members.
A major obstacle that can add to the difficulty of creating a family succession plan is emotions.
Mr. Tamayo spoke about how some of the issues that have to be considered – strengths and weaknesses of family members – are not always what you want to think about.
“It is emotional, too, for the person stepping down,” said Mr. Tamayo. “Because as an entrepreneur, he is the guy who does everything. You are directing and telling people what to do.”