Sargento CEO shares insights on third generation leadership, corporate culture

BizTimes Media’s annual Family & Closely Held Business Summit, held today, featured Louie Gentine, chief executive officer of Plymouth-based Sargento Foods Inc., who discussed company’s culture, history and best practices for leading a multi-generational family-owned company.

Sargento was founded in 1953 by Louie’s grandfather Leonard Gentine, and was passed down in 1981 to Louie’s father Lou, who served as CEO until Louie took over in 2013. Gentine now leads a $1.4 billion, 2,100-employee company that ships its natural cheese products to grocery stores and restaurant chains throughout all 50 states.

The company’s 65-year history and the Gentine family story was recently published as a book, “Treated Like Family.” Author and 30-year Sargento employee Tom Faley also spoke at today’s event. He touted the company’s values-based corporate culture, one that is built on Leonard’s philosophy of: “Hire great people and treat them like family.”

Gentine is one of two third generation family members who currently work at Sargento. He said he and his third generation relatives were never pressured into working for Sargento and were encouraged to pursue their desired career paths. He touted this hands-off approach for building a healthy corporate culture.

“If you have a family member who comes back to the company that is just there because they feel like they’re obligated to come back to the company, then I think you’re doomed,” Gentine said. “Your workforce sees right through that, they can see their heart is not in it.”

If a family member is interested in working at Sargento as a salaried employee, the company adheres to its family participation plan– a set of expectations for family involvement. Family members must be qualified and competent, having earned a degree and have worked outside the company for at least three years. Performance expectations are no different fornon-family member employees.

“You’re not doing that for family harmony, you’re doing it for the health of your family business,” Gentine said. “I think our employees appreciate the fact that we do have a plan, we do have guardrails of how the family gets engaged and how they progress through the organization.”

He also stressed the importance of communication in all aspects of a family-owned business, but especially when operations are being passed down from one generation to the next. Louie’s transition into leadership was an eight-year process, he said.

“My dad and I sat down and said, ‘What’s your goal going to be?’ It seems so basic, but having an understanding of roles and responsibilities and having that conversation made the transition very good between my dad and me.”

Deb Houden, a senior consultant at The Family Business Consulting Group Inc. in Chicago and another speaker at today’s event also stressed the importance of communication to achieve trust throughout a company and its leadership.

Her presentation outlined the importance of building trust and transparency in family businesses, which she said are the backbone of the world’s economy. She said families who own businesses are faced with the challenge of knowing, yet accepting the shortcomings of their family members.

“Trust is a willingness to be vulnerable, a willingness to accept we are human and we make mistakes, and a willingness to accept that someone might grow and become something better,” she said.

She said developing the competitive advantages of trust and transparency will generate time, freedom and strength. But, she said, trust can be destroyed by resentment amongst family members. She encouraged attendees to assess their own ability to trust, to be vulnerable around family members, and to communicate effectively.

The Family & Closely Held Business Summit, which was held at the Italian Community Center in downtown Milwaukee concluded with three 25-minute roundtable discussions on a wide variety of family business topics.