Sharing of ownership engenders long-term success
I, Jeff Spiegel, opened my first restaurant in New York when I was in my mid-30s. In 23 years, I opened 11 restaurants. When my wife, Katie Gardner, and I concluded that it was time to move to New Mexico, we had no way to keep the restaurants alive without us, except to sell them. It’s not that we didn’t think about it, we did. But by the time we were ready to let go, we didn’t have the people to succeed us. It was too late: We hadn’t laid the groundwork.
In 2013, we planned to open a single Italian restaurant in Albuquerque. We made John Haas, our new chef who was then in his early 30s, our partner. At the time, it was a gamble. We didn’t know him well, though we thought he had enormous potential. But our NYC experience was fresh on our minds. Now we had someone who could keep the business going.
The result is a model for business succession that would work in any industry, not just the restaurant industry. We didn’t invent the model. It’s similar to the structure that law firms use to assure their longevity.
The restaurant business tends to be a churn-and-burn industry. Restaurants that successfully transition to the next generation are often family-owned. It is unusual to use the same structure when it is not a family-owned business. None of M’tucci’s new partners are family members. All were employees, unknown to us before we hired them. Their performances, though, stood out. We realized that we had big talent on our hands, and that we should lock them in.
Our plan looks out 25 years and creates the next generation of leadership and ownership. We handpicked the best and put them on a three-year track to partnership. It’s a winwin model for all of us — the founders, the business and the new partners.
Making this move was logical for us. We felt confident that we knew our new partners well enough to bring them in. Now we could assure that the business we were building would survive our retirement, and do it while maintaining the quality that is our hallmark.
For all business, no matter the industry, it takes great talent to grow and succeed. If you hire great people and give them opportunity, they not only will be great at what they do, they will make your business great in the process.
This seems selfevident to us. It has become apparent to us that our view is not shared by others. While implementing our succession plan, we were also in discussions with potential investors. Most of them could not understand why we would “dilute” our ownership, potentially diluting theirs if they became investors. To us, it was just the opposite. We were buoying the company’s long-term future. It seemed apparent that a company with young owners would be in business far longer than one with old folks at the helm. To us, the investors’ profit share would last far longer with young people in ownership positions, than in a company whose future leadership is not clear once the founding 70-year-olds are gone.
So far, our results have been stellar. The new partners are proud to be owners and are helping us take the company to the next level.
Sherry Rivenburgh, one of the new partners, explained it best: “I, along with other key employees, now have a financial stake in the success of M’tucci’s Restaurants, which gives us all a different perspective on how the company functions. The most notable change, which happened without discussion, is how we work as a team. We no longer count on only the original owners to make decisions, we rely on each other for advice and solutions. This gives us a sense of empowerment, and we know that our work and commitment not only makes a difference in the company’s bottom line, but affects our personal bottom line as well.”
Too often, New Mexico leads the nation in bad results. One index that is frequently cited is the number of people leaving the state. By investing in key employees, we give them a powerful reason to plant their roots in New Mexico. And they will bring new creativity, new ideas, new products and the future to your company.
It is about doing the right thing. In this case, doing the right thing will produce these results: The employee/partners thrive, the company thrives and the owners thrive. It’s about building a business the right way.