Next Generations Follow, Expand Family Legacies

Tyler Garman’s father, uncle and grandfather didn’t exactly take it easy on him when they put him to work for the family business.

As a teenager, they put Garman to work on the factory floor at The RoArk Group Inc. in Rogers doing “grunt work” as he called it, cleaning and wrapping equipment that was being sold or just tidying up the warehouse.

Garman started working in the RoArk warehouse during summers as a teenager, which made for plenty of manual labor on hot days. He never operated a press, but he did work in the bindery learning the ropes.

Garman has been president of The RoArk Group since spring 2006 when his father and uncle retired and put him in charge at age 28. As the third generation to run RoArk, Garman bucks the national trends in family-owned or controlled businesses and is one of several Northwest Arkansas Business Journal‘s 2007 40 Under 40 honorees carrying on the family legacy.

According to a 2006 study conducted by Texas A&M-Corpus Christi, 85 percent of family businesses do not make it past the first generation because of lack of succession planning and knowledge transfer.

A similar study by the University of Southern Maine’s Institute for Family-Owned Business put the succession number closer to 1 in 3 passing from first generation to second.

“When I started, my father and uncle were harder on me than any one else,” Garman said of his father Ron, uncle Don and grandfather/company founder Dean Garman. “I certainly expected it. I didn’t expect to come in and run the show starting tomorrow. It was kind of fortunate to some degree to be hands-on to learn about the business from the ground up.

“Still today, I am hands-on in a lot of aspects of the business. My philosophy was ‘work hard.’ They can’t give you respect. You have to earn it.

 “It’s a high-pressure situation. I handle it about like anyone else would. It’s always in the back of my mind.”

“Our family takes great pride in the business itself and what we’ve established here.”

The USM study also revealed 35 percent of Fortune 500 companies are family controlled, and those companies account for 50 percent of U.S. gross domestic product and generate 60 percent of employment and 78 percent of all new job creation.

As more and more baby boomers continue to retire in the next 10 years, their family owned or controlled businesses will face the succession challenge.

 

Namesakes

When Jessica Dearnley was attending boarding school in Massachusetts, her classmates didn’t know where Arkansas was, let alone that her last name ‘Flake’ was anything more than an easy source for giggles.

Of course, nearly anyone from Little Rock and any business-savvy person in the rest of the state knows John and Karen Flake as one of the most successful power couples in Arkansas.

Founded by John Flake in 1979, Flake-  Kelley is one of the largest commercial real estate companies in Arkansas. Flake Wilkerson Market Insights was founded by Karen Flake and has 95 full-time employees and more than 500 part-timers.

“I have high expectations of myself when I look at all they’ve been involved in,” Dearnley said. “They are my mentors. I call and ask them about everything.”

Mike Malone’s father, David, was both a state senator and a state representative for Arkansas and his mother Judy Horne was also heavily involved in public service.

The executive director of the Northwest Arkansas Council since January 2006, Mike Malone said his first memories of his parents’ jobs were his mother as secretary to the City Clerk of Fayetteville and his father as the City Attorney.

He saw the benefits to public service early on.

“I was able to see them doing good things for people, helping people in their lives,” Mike Malone said. “It was easy to want to emulate doing those kind of things in my life as well.”

Expanding the family legacy is a shared characteristic of many 40 Under 40 honorees.

Mike Muccio’s father, Tom, is a successful real estate developer and together they have formed BioBased Systems. Mike Muccio has a vision of linking Arkansas’ agricultural economy with the trend toward “green” and sustainable building practices not only in Northwest Arkansas, but across the country.

Tyler Garman guided his company’s move from its old location to the new facility on 35th Street in Rogers and has also shepharded its expansion into convention and trade show services as a complement to its print origins.

Garman said being the offspring of successful parents doesn’t predetermine success, though.

“You’re either pre-motivated or you’re not,” Garman said. “Whether you’re in the family business or not, if you’re so inclined, you’ll be successful. If you’re a slacker, you’ll end up working at KFC whether you’re parents are successful or not.”

Following Footsteps

Now married to Matthew Dearnley and with three children, Jessica Dearnley has returned to Arkansas to work for her father and now she is the chief operating officer for Midwest Mall Properties, a partnership between Flake, Doyle Rogers and Sam Mathias.

The trio purchased the Northwest Arkansas Mall and malls in Oklahoma City and Colorado Springs in late 2006 for about $400 million.

Jessica Dearnley has a bachelor’s from Carnegie Mellon in Pennsylvania, a master’s from Miami (Fla.) University, has passed all her exams for a certified financial analyst designation and has eight years of experience working in Chicago, New York City and Miami in the fields of advertising, marketing and financial planning.

Dearnley said being Flake’s daughter did not make her hesitate to take on a prominent role with her father’s company when he asked her to look at financials for the malls while he and his partners were considering the purchase.

“Not at all,” she said. “I’m pretty confident in my resume and education.”

Dearnley said she sets her own benchmarks and hasn’t felt extra pressure to live up to her parents’ legacy. She said she’s found that working closely with her father has actually allowed her to get to know him better.

“It’s great,” she said. “I’ve learned a lot from him and I’ve gotten to know him better as a person. It’s kind of funny. You’ve known your parents your whole life but you see them in an entirely different perspective when you work with them.”

Protecting the region’s drinking water and its watersheds are major priorities for Malone, who said he feels a need to live up to his parents’ example daily.

“I’m proud of what they’ve accomplished and are accomplishing,” he said. “I didn’t want to let them down. I got from them how important it is to do a good job, so I certainly feel that pressure each day.”