Brothers, Chip and Ted, represent the 4th Generation of leadership at Deland, Gibson
Wellesley-based Deland, Gibson announced this week that the company’s fourth generation of family owners has taken over the reins of the 115 year old agency. As of January 2015, Charles W. Gibson (Charlie) has transitioned into a new role as Chairman, President while his sons, Charles W. Gibson Jr. (Chip) and Edward H. Gibson (Ted), have assumed the positions of Chief Executive Officer and Chief Operations Officer, respectively.
In announcing the transition, Charlie Gibson noted, “In this day and age, it is incredibly hard to successfully perpetuate a business from within. We live in a world of M&A and less and less loyalty. I am proud to have my sons join me in leading Deland, Gibson and continuing to help businesses and families in Wellesley, and the region, lower their risk.”
“I am lucky to be able to be involved and I look forward to being a part of this organization going forward,” said CEO Chip Gibson in a phone interview with Agency Checklists. “We [Deland, Gibson] were at about $2 million premium when my father started, now we are over $40 million,” he added. “My brother and I can only hope to be that successful. We would love to emulate his [our father’s] success.”
In commenting on the whole perpetuation process, Chip emphasized that you can never start too early. “The process literally
took twice as long as we thought it would take and Ted and I were both in the agency already,” noted Chip. For an agent that doesn’t have a perpetuation plan for his agency the process could be even longer. “Overall, I would say the process takes about seven to ten years,” surmised Chip, adding that an agency needs that amount of time “…to make sure it’s done the right way at the right price.”
As for creating the actual plan, the Gibsons took a divide and conquer approach to running the agency. “…[I]t all started with thinking of it in two ways; a financial and a leadership aspect,” explained Chip. In their case, he, his father, and brother actually started earlier on the leadership aspect of the transition. Working with their long-time consultant, Roger Sitkins and his company InCite Performance Group, the brothers took an objective and technical approach to determining which leadership roles would be best for each brother.
“We took different personality tests to figure out which roles would best suit each of us,” explained Chip. “To our luck…we found a Mr. Inside and a Mr. Outside.” As a result, the brothers were able to tailor each of their new roles in the agency around each of their strengths, which they said made the transition of power that much smoother.
As for the financial aspect of the transition, the Gibsons turned to B.H. Burke & Co. The brothers also made some new changes at the agency like creating a finance committee and bringing in an accountant to go over the P&L, manage the budget and to help advise them on how to best prepare to manage all the financial aspects of the agency.
The Gibson brothers recommend that other agents thinking about or beginning the perpetuation process bring in outside help to coordinate an agency’s transition. “Having third parties was key for us,” says Chip and Ted. “You have to talk about tough things, so it is really helpful to have a third party to help.”
Adds Ted “They [Incite Performance Group and B.H. Burke & Co.] were the mediators in this whole process. It just streamlined it so as to make it all easier for Charlie, Chip and I.”
When asked about the change of leadership with respect to the insurance companies they represent, the companies were fine with the change. “We might be different,” explained Chip. “Charlie has been good at keeping us in the loop. From the start, they knew us and were comfortable with us, so that wasn’t a factor.” In fact, he notes, he actually thinks that many of the companies they represent are actually happy to see family members taking over an agency. ”
“I think the companies are happy with perpetuation of the agency.” he added. “A company of ours, we were out with them, and they said the percentage of a fourth generation taking over a family business, the chances of it working out are so slim that they were happy to see it working.”
In actuality, the brothers say the hardest point of the whole process was getting their father to put down on paper all that he has done on a daily basis as head of Deland, Gibson over the last forty years. “So much of what he does is second nature to him,” said the brothers. “Now that there is the three of us…that was another learning point, figuring out who was going to what and how he was going to train us.”
Advice for other agents thinking about the perpetuation process
Both Chip and Ted caution other children of agency owners to get to know the insurance business before trying to take over the family agency.[W]ork in the agency first,” offered Ted, “to see if it is something you want to do.” While both brothers started their careers in other fields, they came back to the agency over ten years ago to learn the business of insurance.
“…[I]nsurance is not something you can learn in school,” said Chip.” You don’t go to school for insurance.” As for my brother and I, we learned the business first and management second.” As a result, both brothers said that they feel more comfortable taking over the leadership of the agency rather than having come in from the outside.
“I think it could be hard for someone to come in and have to run an office quickly,” adds Chip. “You probably could be successful, but I feel it was a much easier process for Ted and I because we did not have to learn the business from the ground up. ”
As for agency owners, they know that perpetuation can be a sensitive issue for an owner. “For a lot of these agency members, [the agency] is their identity, so it’s really hard to let go and to understand what needs to happen to maximize their value,” said Chip. “We see that a lot with our own owner producers, and even our dad, so we are sensitive to that issue.”
In the end the most telling testament to the success of the perpetuation of Deland, Gibson, however, is the simple fact that very little has changed as to the day-to-day running of the agency, even though the leadership of the agency has changed. “Going forward, it’s not going to be too different. Charlie is still here and while he may not be here a daily basis, he still has a grip on everything. Basically, he’s still here to guide the agency. It’s just now he can focus on doing the things he likes to do.”