Succession Lessons from Perdue Farms
You’d have to be a pretty committed recluse to not have heard of Perdue Farms. If you grew up in a certain era, you felt like you personally knew the founder Frank Perdue, famous for his “tough man” TV commercials. But, like any family business, Perdue’s outward success masked some internal flaws and shortcomings which threatened the company’s long term survival.
Please tune in this week as Wayne details Perdue’s well-planned transition, the single point of failure which threatened their continuation and the four things Frank’s son Jim Perdue insisted on to assure success beyond the first two generations. What stands out to you as you consider the Perdue story? Please email your comments to me at [email protected].
Like Jim Perdue, who saved a family empire by investing in the right leadership at the right time, the construction leaders who will define tomorrow's industry are being developed today; don't let your rising stars miss their chance. Secure their spot in our unique leadership development program, The Contractor Business Boot Camp, before the final class of the year fills up. The class starts in November in Charlotte, NC. Contact our Charlotte at [email protected] to find out more.
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WAYNE RIVERS: Hi, everyone. This is Wayne Rivers at Performance Construction Advisors where We Build Better Contractors.
This week I want to talk about succession and in fact, a succession lesson from Perdue Farms. Before we get into it, don't forget about our final Boot Camp of 2026. It's in Charlotte, North Carolina in November. Get your high potential folks signed up with Charlotte and get them into that class. Okay, this came from our friend Arlon in August of '26 from a blog by a writer named Jane Johnson. And Perdue Farms is a very famous family business, still 100% family owned by the way. And if you're of a certain vintage, you can remember the iconic commercials that said, "It takes a tough man to grow a tender chicken," or something like that. And those commercials were on all the time. And Frank Perdue, who was featured in those advertisements, was a legend.
He was a business builder and a legend and he was the tough man that built tender chicken. Anyway, in 1991, Frank Perdue retired. The company had about a billion dollars in sales at that time. His son Jim took over and on Jim's tenure from '91 through 2020-something, he grew the company almost 10 times to over $9 billion in total sales. Now, what about this is important to you? Well, this is about a family business. It's about a notable visible retail family business, but you don't have to be a family business to take away lessons from what they did right and what they did wrong. It doesn't matter. We found that succession looks very much the same for our family businesses as for our non-family companies. The planning effort, the process looks very much the same. So what did Jim find when he came into his father's company in 1991?
He said that he found out that his father, Frank, was the single point of failure for everything that went on in that company. Now, if you can imagine being energetic enough to have your finger on the pulse of a billion-dollar business, all aspects of it, that was the case with Frank Perdue. He said that in terms of the executives in the company, that Frank Perdue had good soldiers, but no good generals. He had no equals, he had no executive of his caliber that were his peer, that he could really lean on in tough times. When Jim took over, about 30% of the senior executives quit because new sheriff in town, this is a new thing, we're going to be doing things differently. So what four things did Jim do when he took over the company that allowed him to maintain the culture and maintain the traditions of Perdue, but also led them in a much different and faster growing direction?
The first thing was that Jim started as an entry level employee. He worked his way up in the organization. He said that, "Credibility is built, not inherited." So important in family businesses. One of the biggest morale busters I ever saw in family companies is a young person will finish college or finish working for a different company and come in at the age of 25 or 26 and boom, be promoted to executive right away, skipping over generations of people that have helped build the company. Big morale buster.
Number two, Jim made the invisible visible. He became much more transparent in what was going on. He helped draw Frank's thinking to the surface for everyone to see. He distributed information and access across the executive team and had them drill it down farther into the organization. This is hard to imagine. He reoriented the company to focus on the customer. We always think customer comes first, right. He reoriented them to focus on the customer first. What had happened during Frank's leadership was they had become too inwardly focused and they were focused too much on what was good for Perdue, what was good for the company, not so much what was good for the consumer. And that's a big reorientation.
The third thing, he prevented the family business from turning into a family project. We've seen this before. There was a franchise organization we worked with a couple of decades ago and let's say they might have 25 employees inside the company. 20 of them would be family members. It was amazing. I didn't know how they did it really, but some of these folks are really quite successful. But that franchise organization was also kind of a lifestyle organization and the family was incredibly attracted. Were they the best people for the jobs? 20 out of 25, maybe, I don't know. But you have to think that there's a lot of talent out there in the world that doesn't have the same last name as the owner.
He made the distinction between a family business and a business family. Now I think we've talked about that ad nauseum in our vlogs, so you understand the difference. He professionalized the management and leadership. He instituted dividends. Why did he do that? Because Frank had never distributed dividends to anyone in the family, even though they had many, many, many family shareholders. He said, "That's not sustainable. That's going to create division in the family and that's going to end up affecting our business over time." So he instituted dividends. And finally, he said that he wanted to honor the family legacy, but he did not want to be trapped by it. So he didn't want to feel like he was committed to bringing in family members as senior this and senior that, and he wanted a meritocracy versus a system of nepotism.
The fourth thing is he gave family members real work. So as he came in as an entry-level employee, he wanted other family members who ventured into the company to do the same thing. So he challenged them to think in decades, not just in quarters. 100% family ownership allows them to do that. They don't have to report to Wall Street analysts or anybody else. And so it's still 100% family owned, which is really quite an amazing thing.
One thing that he recommended is that, sort of a thought experiment, what would happen to your business if you were to leave and stay away for 90 days? What would you come back to? Would it be a well-oiled machine and everybody says, "Welcome back"? Or would it be chaos and constant phone calls and emails and fires to put out and everything else? Be a little bit ruthless in your thinking there. If you were to leave your business for 90 days, seriously and objectively, what would you come back to? Great, great question.
Second one is, do you have a clear picture of what your successor team looks like? Frank Perdue did not. Jim had to create that from scratch. But as Jim departed as the senior leader, he did have those good generals, that successor team in place so that it was a seamless event, not a crisis when he left the company. Let me read the final paragraph here. "The businesses that survive their founders don't do it by accident. They do it because someone at some point decided to take the succession question seriously." Great advice from Perdue Farms. What do you think? Email me [email protected].
This is Wayne Rivers at PCA where We Build Better Contractors.
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