Arlin Sorensen, CEO of Heartland Technology Solutions, a Harlan, Iowa-based solution provider, had to be strong in front of his employees during a difficult time. Sorensen had quadruple bypass surgery in January 2005 after going to a doctor complaining of minor chest pain. He had little time to prepare himself or his business for an extended absence.
"The team pretty much freaked out. We hadn't really done any serious preparations for anything like that," Sorensen said. "As an owner, we do a lot that people don't realize we do and we're not good at documenting those things. It's important to communicate what things need to be done."
Sorensen missed about a month of work and it was several months before he was fully recovered. While he was able to give directions and guidance, some things still slipped through the cracks and the business suffered, he said.
"The thing we've really learned is preparation is the key. Plans have to be written down and people need to know where it's at. We just got through a total redo of our disaster recovery plan. That's a big task."
The chaos trickled down to customers, too. Sorensen was also account manager for a number of large accounts, which went underserved when he was out. "The poor people trying to pick it up had little or no information because most of it was in my head," he said.
The incident is one of the reasons Sorensen later founded Hands That Give, a program through his Heartland Tech Groups organization of solution providers that enables them to help each other during times of need.
At May's Heartland Tech Groups' HTG Summit in Dallas, one of the solution provider panels fittingly focused on "Preparing For The Unexpected."
Zaun Bhana, managing director of Leap Consulting, an Australia-based solution provider, talked about his company's experience after the wife of his business partner died of skin cancer a few short months after being diagnosed. His partner, who had been running Leap Consulting's technical team, was devastated and couldn't focus on work for several months. The business suffered as a result, Bhana said.
"He lost focus. Everything stopped. He was running all aspects of projects and was a 50 percent shareholder in the business. Everything we did was together. After that, he was gone. He didn't turn up for meetings or work. There was nothing left," Bhana said.
While the company had taken some steps such as acquiring key man insurance and signing a buy-sell agreement, it hadn't accounted for the impact the death of a spouse could have.
"There was an amazing level of stress. When you're not technical, you think you can just give that role to someone on your team to do, but they're worried about their own future. Your customers are thinking, 'He's the technical partner. Is this company going to be able to support us?' We had written up polices/procedures, but nothing for when something happens to a spouse. What happens when you lose the person who takes the kids to school, does homework, goes to their sporting events? Those are things you never think about," Bhana said.
It took nearly a year before Bhana's partner was back at work full time, he said. Now, Leap Consulting has implemented more processes to ensure that should something happen causing a key executive to have an emotional exit from the business, if not a physical one, that the company is better prepared.
"Go back and review what your plan is for every critical position," Bhana advised other solution providers. "If someone leaves, who would do that job? All our planning now is who is second in charge for everything. We make it part of their plan. We do that now with every position, and we never would have thought of that before."
The development of a strong legacy plan is one of the most important roles that solution provider business owners have for their companies, said Sorensen.
"The thing I've learned is nobody else cares about my legacy except myself. Nobody else is writing a plan or thinking about my legacy. So if I don't step up and take that responsibility, it's not going to be planned," Sorensen said. "Legacy is the foundation for all planning and should be the determining factor for how we live and how we lead. We owe it to our [employees] and our families."
During the panel, Kyle Elworthy, president and CEO of Network Essentials, Charlotte, N.C., relayed an emotional story of the death of fellow HTG member Scott Mallet, president of Network Technology Solutions, last October.
Elworthy and Mallet were in the beginning stages of starting a new venture-backed service together when Mallet died. While Mallet had started a legacy plan for his company and family, he hadn't finalized things, and the company and Mallet's family are still dealing with the fallout, Elworthy said.
For their joint venture, Elworthy was not even sure who key contacts were for things such as outsourced hosting, and there wasn't much documentation to work with. Mallet knew everything, but he was the only one. "I guarantee you that you need to do this stuff," Elworthy said. "The emotional toll has been terrible."
During the panel, Sorensen asked for a show of hands for how many HTG members have key man insurance for themselves. Most solution providers raised their hands. But only about half had a buy-sell agreement should something happen to one partner, and few solution providers indicated they had a plan should a key executive lose a spouse.
"Legacy, planning is a big, big area. A lot of times you run into situations outside of the box that you haven't thought about," Sorensen said. "In our office, we just had our internal IT guy have a quadruple bypass. He had been here 16 years, built our IT from scratch. We had some guys know some stuff, but he had all the keys to the kingdom in his head. I learned the meaning of scramble when I found he wasn't coming back from the doctor and was going to the hospital.
"We encourage people to work on their plans. Don't say it's not going to happen to me, not this month, this year. It does happen more often than you want to admit," Sorensen said. "You can't make a plan after the event. Plans only count if you get them done before you need them."
PUBLISHED SEPT. 17, 2012