October 25, 2014

The Duda Way

Cultivating Generations

A. Duda & Sons' toughest crop to harvest is family. How would you keep some 60 shareholder-family members happy?

Cynthia Barnett | 9/1/2006

Dressed in sensible shoes, slacks and a short-sleeved top, Tracy Duda Chapman steers her Ford Expedition through the tiny central Florida community of Slavia, narrating the history and lore of the place where her great-grandfather Andrew Duda settled and left the family's imprint.

After emigrating from the Slovak region of the Austro-Hungarian Empire in 1909, Andrew Duda, and later his wife, worked in Ohio factories and truck farms to make payments on 40 acres he'd picked out in a settlement northeast of Orlando. A Lutheran group, the Slavia Colony Co., had carved out a community there amid thick woods and wetlands where the only dwellings were shacks left by turpentine workers.

Duda's earliest efforts to farm in Florida failed. Only after his three sons were old enough to help him in the fields did the family harvest its first cash crop -- celery -- in 1926. Over time, they learned to reap greater profits from the land. And as they built their business, the Dudas also cultivated Slavia's community and spiritual life. The family is responsible, in large part, for St. Luke's Lutheran Church and an associated indigent healthcare center, retirement village, nursing home, assisted living facility and day care. The church's Pre-K through eighth-grade school has a roster of Dudas so long, Chapman points out, that her father, retired company CEO F.S. Duda, graduated from there, as did she, as will her daughters, ages 5 and 9.

Braking as she pulls into her old school's parking lot, Chapman says the omnipresent Duda family heritage overwhelmed her sometimes during her childhood. That's one reason she headed out of state, to the University of Alabama, where she earned a finance degree. Twenty years later, Chapman, 41, is happy to be back in her hometown, raising a family and serving as the company's general counsel and a corporate vice president.

As a business, A. Duda & Sons has grown and diversified successfully ["The Keys to Survival,"]: Its agribusiness operations, now global, and Florida-based real estate divisions grossed $464 million last year. But as Chapman's rise reflects, what has set Duda apart from other old-line Florida agricultural family businesses is its ability to harvest new generations of leadership along with fruit and vegetables.

In 1972, Duda's last major leadership transition saw control pass from Andrew Duda's three sons, farmers known as the "three seniors," to their eight sons. Now, a new transition is on the horizon, complicated by both the family's growth and the company's diversification into real estate. Indeed, of all the challenges facing this global agribusiness, the biggest issues involve family.

"When you think you've got it all figured out, something comes along to show you that you don't," says Joseph Duda, company president and CEO. "Right now, that's trying to work out how to transition our leadership to Tracy's generation, to the fourth generation.

'Instant credibility'

If company history is any guide, neither Chapman nor other high-ranking cousins in the family's fourth generation will be anointed as a super-CEO to run all the company's operations. Yet Chapman already has emerged as the most powerful woman in an operating position in Florida agriculture. Tapped increasingly as the public face of Duda, she is sure to be a major player in the new leadership structure.

After college, Chapman's first stint with the company was a yearlong rotation through various Duda divisions -- required of any family member who wants to work for the company. In addition to working in the accounting, riskmanagement and legal departments, she worked lettuce and carrot farms in Fellsmere and served in the office of the National Council of Agricultural Employers in Washington, D.C. The work confirmed her decision to go law school. Most of her cousins had studied agribusiness. A legal degree "could provide something that we didn't have in the family," she says. "I thought it would be a niche that would give me instant credibility."

After law school at the University of Florida, her first job was at the Orlando firm of Dean Mead. Among her colleagues there was Marc Chapman, the commercial litigator whom she married. The job gave her the expertise that Duda general counsel Cal Livingston wanted to bring into the company as it branched into real estate development. Livingston persuaded Chapman to come to work for Duda in 1992. When he retired in 2000, she was promoted to general counsel. Last year, she was named a corporate vice president in charge of government affairs, corporate communications, risk management and technical services.

Chapman is often the family member tapped to represent the company when the Florida Legislature or the U.S. Congress deals with agribusiness issues. Most recently, Chapman has spoken out for "reasonable, practical" immigration reform. Duda operations in Florida, Arizona and California face severe labor shortages.

Duda stays involved in politics "not necessarily because we want to, but because it's necessary to the business," Chapman says. The company's political action committee, according to Federal Election Commission documents, handed out $31,000 to political candidates in 2004 -- with 87% going to Republicans -- and $19,000 so far this election year, with 95% to the GOP.

Keeping the peace

Family lore has it that when the three seniors ran the business, they'd settle disagreements by standing out in a field, yelling and kicking dirt until somebody won the argument. Today, that strategy would cause a dust storm. The number of family members who own Duda stock has grown larger and larger, even as the percentage of family members who actually work for the company has shrunk.

In all, 132 direct descendants have spread with their families into 10 states. The company's shareholders include 58 direct descendants in the third and fourth generations. Of the 46 direct descendants in the fourth generation, only 13 work for Duda. "Family is hard because the larger you get, the more demands there are for financial returns," says Chapman, who has taken on the mission of cultivating more family participation in the company.

In 2004, the company created the Duda Family Council to bring working and non-working Dudas together. The 11-member council is made up of representatives from the family's three branches. At present only three members, including Chapman, work for the company.

The council plans a major opinion-research survey of all family members next year. Recently, at the family's annual meeting, it staged a job fair to expose youth in the fourth and fifth generations to the careers available at Duda. As the company diversifies, it wants to pull in more family members with diverse professional skills. Chapman was the first lawyer, but she recently hired a cousin as an associate counsel. "Our aim is to have as few as possible investor-shareholders and as many as possible active shareholders," says Chapman. "They may work in the business or not, but if they have a talent we hope that they will work in the business."

Succession

The chief task facing the company in the leadership transition is how to structure management of the corporate parent, A. Duda & Sons, which oversees six subsidiaries, including fresh foods, processed foods and several real estate divisions. The Dudas have always brought in non-family members to run elements of the company for which they didn't feel equipped. Barton Weeks, for example, who joined the company 22 years ago as an economist, serves as executive vice president of A. Duda & Sons and CEO of Viera Co., the real estate project. Another non-family member, Bob Gray, is CEO of Duda Farm Fresh Foods.

Joseph and F.S. Duda have been studying three-century-old European family companies in an effort to figure out what will work for Duda. "I think we'll end up with some sort of joint management team," says F.S. Duda, the company's chairman. "There's no question we need several leaders who can work together. That's really how we operated in our generation."

At least publicly, there is no overt rivalry among the members of the fourth generation for a top seat in the new leadership structure. Chapman and cousin Dan Duda, the recently appointed COO of Duda Farm Fresh Foods, are the only members of the fourth generation to have reached the corporate vice president rank, but Chapman's sister, Lauri Buckley, and five more male cousins, Drew, Darrell, David, Sammy and Tommy, are all part of the company's management team.

Jennifer Pendergast, a family business consultant with a Wharton doctorate who has worked for the company, says the succession from third to fourth generation represents the biggest test the family will face. According to the Family Firm Institute, one-third of family businesses pass from the first generation to the second; 12% make it from the first to the third generation; and only 3% pass from the first to the fourth generation. "If they can figure out this handoff, the structures and processes they have will work in any generation going forward," she says.


DUDA ROUNDUP: There are 132 direct descendants of the "three seniors." Of the 46 in the fourth generation, only 13 work for the company.

Tags: Central, Space Coast, Agriculture, Housing/Construction

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