Q&A … With Mike Heitmann

PUBLISHED SEPTEMBER, 2023

Q: Now that your retirement has been announced, can you take us back through the process that led to it, and the drafting of the original succession plan?
A: Succession planning is a continuous process, so we are always working on it as it applies to all levels of the organization. Parallel to our succession-planning process is our leadership development program, which essentially prepares our people to lead teams and organizations. Our goal is to have a bench of leaders capable of stepping up when needed.

Q: But there is one seat on that bench that differs a bit from the others with the CEO.
A: Specifically regarding my position, we began looking at who on our bench would be a good fit for the CEO role about three years ago. Several people were identified and targeted with additional leadership development work. It was about 18 months ago that David (Burkhart) was identified as the next CEO. He moved to Kansas City last summer, and we have been transitioning my role since that time. The hand-off is essentially complete, and he will assume the CEO role on October 1.

Q: Tell us about the decision to operate on a three-year time frame. Why was that key?
A: We wanted to have a solid 18 months of overlap and be able to ramp the transition from zero percent to 100 percent over 12 months, then have a six-month period where the new CEO has the reins 100 percent. The three-year process gave us 18 months to evaluate the bench of executive leaders, look at their strengths and determine who would be the best person to be CEO.

Q: But it doesn’t stop with that decision, does it?
A: You don’t want to look at the CEO position solely. You need to look at the overall executive leadership in terms of CEO, CFO, COO, president, and other key people who oversee significant operations. They all have different strengths. We wanted a team that’s very complementary to one another, whose strengths combined to provide effective leadership. So no, you don’t just look at one person, you’re looking at the whole team.

Q: Does that mean tinkering with roles structures?
A: There are always going to be adjustments based on the team strengths. In the current leadership team, there are things I’m good at that I handle currently, there are certain things our president is good at. In the new team, several things shifted: This is one better at this, this one is better at that, so let’s switch that up. We developed a very detailed list of roles and responsibilities, showing who did what and how that might look different in the next leadership team.

Q: Was there a commitment for an internal hire from the get-go?
A: There was a strong preference for that. We were very confident that we had internal candidates well-suited for the CEO role. It doesn’t mean that going outside is not an option, but that would have been a last resort. So we never had doubt. 

Q: So it’s important to be building your bench along the way, long before change at this level is going to happen?
A: That’s why I say it’s continuous. When you’re planning succession, you don’t ever really develop a plan and be done with it. Succession planning is a process that is never-ending. Just like strategy and financial management, it’s continuously going on. It parallels leadership development, basically creating a deep bench of executive-ready leaders, and identifying their strengths. When the time comes to replace key positions, you have the bench ready to step into those roles.

Q: Was there anything specific to the Garney organization plan that required a different approach, as opposed to what we might call off-the-shelf succession-planning guidance that could apply to any company?
A: Nothing in particular other than being a 100 percent employee-owned company. Our level of communication with our employee-owners was higher than typical. Our people have a vested interest in knowing, and having confidence in, our leadership.

Q: What specific tools help create that level of transparency?
A: We have weekly internal emails that go to the entire company, as well as quarterly shutdowns in he field where we stop work and meet with our field crews about what’s going on within our company. Our communication level is much greater because our employee owners’ retirement and financial security are dependent on this company being successful. They deserve to know. So we’re very transparent about when people are retiring. Several years ago, I began telling the company “I’m retiring in 2024,” so we started the process to identify the next team to lead this next chapter of Garney. We didn’t communicate the CEO shortlist, or anything like that, but we made it clear that we were going through the process, developing our leaders, working through succession and as soon as a decision was made, we made sure it was communicated.

Q: And what form did that take?
A: It’s hard to get everybody together because we’re so spread out around the country, so we sent an email to the entire company announcing that David would be CEO and Matt (Reaves) and Matt (Foster) would be the new presidents. We did that internally, a good eight months before we did the news release a couple of weeks ago.

Q: So was your overall plan fully in place heading into this process, or did it require fine-tuning before you started discussions with all the folks involved?
A: We hired an external consultant about six years ago, to help us with both leadership development and succession planning. The process was continuously tuned, and always evolving and improving.

Q: Did you learn anything from that consultation that impacted the trajectory of your planning?
A: Yes, the consultant was invaluable. We’re a construction company; for the most part, all of us are people who focus on building things. We didn’t have the same level of education or training in leadership development or succession planning, so it was important for us to hire somebody who did. It was a firm from Dallas, and again, they were invaluable in helping us with what the overall plan needed to be.

Q: How did your growth as a company play into the process?
A: I became CEO in 2011, and we were a much smaller company then. Not that succession wasn’t important at that time, but when you are much smaller, the pieces are kind of clearer, and the needed expertise is less. Now, we’re a $1.5 billion company, we’ve got departments and aspects of the company that are crucial to our success that we didn’t have back then. That makes it much more crucial to have a better understanding of the process and impact.

Q: Did your consultant identify any blind spots in your planning?
A: We are a hands-on, get-stuff-done company, so they helped us lift our heads up and look farther down the road to understand the importance of clarifying the vision for the company and then translating that down to actionable steps. The executive team shouldn’t be wading into the details, but letting their teams do that. Leadership needs to be focused on the longer-term vision and the overall purpose and culture of the company.

Q: Is that tough, personally, to let go with a decision so big on the line?
A: It can be uncomfortable. I talked earlier about people’s strengths, but it’s not only about strengths—people do things differently, approach things differently, look at things differently. That can make you uncomfortable when you’ve done things a certain way for 12 years. You want to get in there and speak up, but I learned from the consultant the importance of stepping back, being a trusted advisor and letting the new team execute. I was very intentional and made a conscious decision to focus on that. I continue to provide input to the new leadership team, but ultimately, they are making the decisions.

Q: Did anything with your experience leading up the announcement of this plan surprise you in terms of timing, complexity, internal politics or other issues? 
A: No surprises other than how quickly the new team was capable of taking the reins. You tell yourself that everything will fall apart and lo-and-behold, the new team steps right in. It can be difficult to let go, but critical to making the process work.

Q: If you had to go back to square one, would you have done anything differently? 
A: Not really—I think our process over the past three years has worked well. Some things can only be learned by being in the seat. You don’t know what you don’t know. This was certainly the case for me when I became CEO.

Q: Outside of corporate ownership, who are the trusted advisers that must be part of the process, and what do they bring to the table? 
A: Our board of directors was heavily involved in the process and played an important role. They were integrally involved in the final decisions and helped shape our path forward. As mentioned previously, we utilized an outside consultant that was very helpful as well.

Q: What about managing staff expectations and the inevitable water-cooler talks about how the pieces on the chessboard will shake out? 
A: Being employee-owned, we tried to be very transparent, and over communicate with our employee-owners.  

Q: Related to that, what’s your best guidance on managing difficult discussions for those who won’t be moving up? How do you ensure retention of that talent?
A: The beauty of employee-ownership is that everyone on the team wants the company to be successful. This strengthens support and collaboration between leadership. Everyone wants everyone else to be successful because it benefits them and everyone else. Our compensation structure encourages this. Those that may not have received the promotion they were hoping for are minimally impacted from a financial standpoint, them and everyone else. Our compensation structure encourages this and those that may not have received the promotion they were hoping for are not really impacted from a financial standpoint.