Kay Johnson: ‘It takes a special kind of family’

Friday, October 31, 2008

Few family business challenges become quite as sticky as navigating a succession from one generation to the next. This difficult process became even more thorny for James and Peggy Silliman as they approached retirement from Midwest Medical Services, the Watertown, S.D., HME company they founded in 1983.

The Sillimans had taken on partners Kay Johnson and Rory Creager in 1995, but they learned that their own children were not interested in continuing the family business into the next generation.

“They were lamenting, ‘What’s going to happen to Midwest Medical?’” remembers Johnson. “We started talking about whether my kids would be interested.”

After much family discussion, a long-term succession plan involving Johnson’s children was put into place, with son Paul Johnson joining Midwest Medical in 2006 and daughter Amy Schmidt and son-in-law Jay Schmidt coming on board in 2007.

Without the next generation secured, Johnson believes the company might not have survived.

“We had chances to sell to the nationals, and we could see the writing on the wall. Independent Midwest Medical would have been torn apart,” says Johnson. “When this chance came to bring in other family members, (it enabled) the company to stay intact.”

The greatest perk of working beside her children each day, says Johnson, “is the pride involved in knowing that my kids are pursuing the same type of career I did. It’s seeing the qualities of caring for others develop in my children.” Unlike the square-peg-in-a-round-hole hiring that plagues so many family businesses, Johnson found a natural fit between her children’s talents and the company’s needs. “Their skills and personalities plugged right into the spots opening up,” she says. “They’re naturals.”

Johnson believes having their involvement is what will take Midwest Medical into a new era.

“It’s their vision and their generation that will put its mark on Midwest Medical as a progressive company,” she says.

Johnson still faces the difficult work of choosing one of her children to lead the company after her own retirement. She’ll assume the lead management role in 2010 with the retirement of James Silliman and Rory Creager (Peggy Silliman retired earlier this year) and expects to continue working for about six years before handing over the reins.

The Johnsons meet the day-to-day challenges of a family-operated business by ensuring that “the decisions we make are about the good of the company,” she says.

Success also takes separating work and family, says Johnson, and agreeing to leave work matters at work when everyone heads home for family dinner. “We made it very clear that the kids’ opinions would be respected and valued, but the decision would be mine and the partners. They understand that,” she says. “It takes a special kind of family to do this.”

Kay Johnson
Title/company: Co-owner and manager, Midwest Medical Services
Locations: Watertown, S.D.
Age: 57
Years at the helm: 13
Best family quality: “We’re a family who can discuss our differences and disagree but come back together as a family. We don’t hold grudges.”