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Next Generation Grows 400% After 53 Year Old Founder Retires

Marvin Tibbetts founded and ran Decatur, Georgia-based Tibs Group (formerly Tib's Electrical Service Company) for 25 years. At 53, bent on pursuing other interests, he considered selling the successful electrical contracting firm to fund his retirement. His sons had other ideas; they were passionate about taking over and growing the business.

Today, he knows that giving them the opportunity to do so was the right choice. In just five short years, the team of Mark Tibbetts, Todd Tibbetts and non-family executive, Dan Phillips, assumed management and ownership control, opened two new divisions, and more than quadrupled company sales. The delighted founder was there to cheer them on. Eldest son and CEO, Mark, 38, entered the business as a salesman right out of college and worked his way up through the ranks. "Dad wanted me to come into the business if that's what I wanted to do, but he didn't put any pressure on me. I had worked here during college breaks, and I was usually at the bottom of the totem pole. Whatever had to be done, that was just where I was always plugged in." By the time Marvin retired, Mark was in the CEO position.

Younger son, Todd, 35, chose a different path. "I think I always knew I was going to end up here," he said, "but one of the things I wanted to do was go out and work for somebody else. I went out to see what I could do on my own." With a degree in business, Todd worked in accounting for a bank, and later with a CPA firm before entering the family business. "I had decided I didn't want to be a CPA, but I learned a lot about accounting--and that's part of what I do here," said Todd. Mark played a major role in convincing his brother to enter the family firm. Knowing Marvin's desire to retire within the next few years, "I just had dinner with Todd one night and I said, `Look, if you're ever going to do it, now's the time." Todd came in as a sales rep and became CFO within the next year.

Dan Phillips, 41, the company's non-family president, joined Tibs as a salesman. Within a few years, Dan knew he'd found his place and wanted to make a long-term commitment. Marvin Tibbetts saw Dan as "a very good, loyal, strong and productive individual with a lot of potential." As Marvin contemplated retirement, he saw Dan as a valuable asset to the company's future. Impressed with his contributions, his character and his family, Marvin approached Dan with an offer of ownership. "I gave him an opportunity to be part of the management team as if he were one of our family members. He, Mark and Todd get along very well." "Marvin and all the Tibbetts have been very good to me. It's been a very good working relationship," Dan said. And, he continued with a smile, "I have the advantage that I don't have to put up with the family stuff." But he compliments the Tibbetts' balancing abilities: "The way they handle family vs. business issues is very professionally done -- they are able to separate the two."

Initially, Marvin recalled, making executive appointments was a real heart and soul-searching issue, but today he speaks with pride of Tibs' second-generation leadership team and the strengths that each brings to the business and to their positions. "Todd was a couple years younger than Mark and had less experience in the business," Marvin observed. "Mark is kind of a visionary and big picture guy, a good salesperson. He had the leadership characteristics. So far it's proven to be successful."

Planning Eases Transition 
Succession, ownership transition and even teamwork were eased by the existence of what Marvin calls a "family business plan." A three-year project Marvin embarked on once retirement became his goal, the plan included in addition to ownership and management transition, a family/partnership mission statement, methods for dealing with dynamics of having a family in positions of responsibility and accountability, training, growth and expectations. The family/partnership mission statement covers stewardship, compassion, tradition, enjoyment, Christian principles and future expectations for the family and the business. A professional evaluation was made of the company for stock valuation, and insurance was purchased to cover potential estate taxes. Currently, Mark, Todd, Dan and Marvin share equal ownership. Marvin receives retirement funds through the company executive pension plan and his stock will eventually be purchased and split equally among Mark, Todd and Dan.

Crisis and Opportunity
Management and ownership transition were not without problems for the new team. While there was an exit plan for Marvin's long-time partner and director of operations to leave the following year, the resignations of the front office manager and some key field personnel were completely unexpected. "Within a year of Marvin's retirement, seven of the company's 22 employees left. While that period was difficult, losing the long-time employees turned into an opportunity to gain new skills, fresh perspectives and innovative ideas." "Dad kind of warned us," said Mark. "He said `look, when I leave, there's going to be some jealousy -- call it loyalty, nervousness, cold feet, whatever--there's going to be attrition.' We didn't want to believe that." While that period was difficult for Mark, Dan and Todd, losing the long-time employees turned into an opportunity to gain new skills, fresh perspectives and innovative ideas. "Although we had to rebuild," said Mark, "it's been a success story." Mark, Todd and Dan all agree they have a great love for the business and recognize their incredible opportunity for growth and success. With that as their central focus, they've had minimal disagreement and worked well as a team for the good of the company. "If I had tried to cowboy this thing and not gotten with Todd or Dan," Mark asserted, "we wouldn't be near where we are today, and I firmly believe that." "I preached and encouraged them to pull together, because as a team they can do wonders. But jealousy and deception can be disastrous," said Marvin. "You're going to have conflicts. Siblings are always going to be siblings. You may have some minor jealously, and they may be harder on each other than they would be on other employees, which is natural. Families themselves are going to have problems that are a distraction to the business and there's got to be understanding and compassion for each other."

New Generation/New Strategies
In the five years since Marvin's retirement, the company has grown from 22 employees to nearly 90, and sales have grown from $1.6 to $9.5 million. The team expanded services to include IT Solutions (computer cabling, fiber optics, telecommunications and wireless) and Power Quality (emergency power generation and power correction). Operations continue to be streamlined and modernized. The name changed to Tibs Group to better reflect multiple services. Rather than multiple trips to the office each day to handle paperwork, trucks go home with the workers who transmit reports and receive work orders via fax machines or laptops. "They'll just come in for training and restocking trucks, but to spend 2-2.5 hours a day that the customer would have to pay for is just not feasible anymore in our business," said Mark. "We've been purchasing much more equipment and hiring workers in preparation for the big jobs which are continuing to come," said Todd. "This way, we're ready for opportunities as they present themselves rather than scrambling to hire as we get the jobs." Dan added, "We've gotten into much bigger jobs by creating strategic alliances with other companies, and by going after higher level people such as CFOs and owners rather than starting with maintenance managers and working our way up." "The economy and the internet explosion have also contributed greatly to our growth," Mark said. With their complimenting divisions, expanding technology demands have opened the door for Tibs to expand into facilities with heavy requirements for computers and telecommunications. These types of facilities require lots of power, clean power, and miles of fiber optics.

Bringing a Board aboard
After retiring, Marvin moved to the mountains where he met Richard Calmes, a businessman who had just sold his second company. Marvin approached him about becoming Tibs Group's first outside director. "What we liked about Richard is, first he understands technology and how to apply it to business," said Mark. "But he also knows how to grow a business and he knows how to market well. So he brought an outside perspective to the board." "Our plan is to operate for about a year with this outside board member, learn from the experience, then go after one or two additional directors in the next two years, if we can find the right people," said Marvin. "When I first retired, we were having monthly meetings for almost a year. Monthly meetings were hard on the boys. I realized it was interfering and taking time away, so we went to quarterly meetings. My involvement in the business for the last five years has been primarily to attend quarterly board meetings as chairman. I don't talk business in the interim. They've done such a good job that I've primarily backed off. They're more aggressive than I was when I was running the show -- I'm just really proud of the three of them," said Marvin. "One of the joys of life is being involved as a mentor. They've taken the principles and philosophy that I grounded the business with and have done well. That's one of the joys I have in my retirement."




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