Peter Chisholm, left, and his cousin Jordan are part of the sixth generation that joined the family lumber business in 2007 when illness struck their two predecessors, including Peter’s father.David LeClair
Crisis is sometimes the catalyst for succession in a family business. For hardwood and softwood manufacturer Chisholm Lumber, unexpected adversity sparked leadership changes from one generation to the next not once, but twice. Both times, the descendants rose to the challenge and kept the 168-year-old enterprise running.
The first emergency-driven transition happened in 1980, when a fire destroyed Chisholm’s major manufacturing facility in Roslin, Ont., between Toronto and Ottawa. A spark caught on a wood-burning device after the crew went home, setting the building ablaze. The fourth generation of Chisholms, then nearing retirement, was ready to step away since it would take 15 months to rebuild.
Doug Chisholm of the fifth generation was 33 at the time, in Toronto working in consulting, but he didn’t want the family business to dissolve. He’d been contemplating a career move anyway. “I had no inkling I was coming back,” he says. “But my dad and his two brothers were ready to pack it in.”
He and two cousins wanted to keep the enterprise running. “My wife and I said, ‘Let’s try it and see what happens in five years,’ ” says Doug, now 77. “Well, we never left.”
Doug Chisholm in the warehouse of Chisholm Lumber. He and two cousins took over leadership of the business from Doug’s father and two uncles after a fire destroyed the main manufacturing facility in 1980.David LeClair
Today, Chisholm Lumber exports kiln-dried hardwood across North America and beyond, employing 40 staff and hundreds of contractors including loggers and home builders. It also has a custom home building division, a dry-kiln operation, and a forest-management arm that advises on sustainable practices.
When Doug’s great-great-grandfather, William Fraser Chisholm, founded the business in 1857, it consisted of a water-powered flour and feed mill, and a sawmill. Roughly 100,000 logs were floated downstream from northern townships each year to be processed at the mill on the banks of the Moira River.
Doug became president around 1981, while his cousins acted as vice-president and secretary-treasurer. The titles were not associated with specific duties: each co-owner played to their respective strengths and interests. Doug focused on the finances while his cousins brought hands-on experience in the forest industry. “It was pretty informal,” he says.
They faced several recessions and high interest rates early in their tenure, but Chisholm survived by diversifying and by embracing new technology. It established a wholesale and a home construction division. After another fire destroyed its lumber-drying operations in 2004, it modernized by installing two state-of-the-art kilns that run off a renewable bioenergy heating system that uses leftover sawdust and wood shavings.
One cousin had retired by the early 2000s, so Doug and his remaining partner started thinking about transitioning to the sixth generation. That’s when the second crisis hit.
“We both got sick. I got better, but he didn’t.” With his cousin’s death, a road map for handover suddenly became pressing for Doug.
Succession planning is often derailed by serious illness, death, or accidents, says Peter Jaskiewicz, academic director of the Family Enterprise Legacy Institute at the University of Ottawa. “It’s no longer a conscious choice, but it becomes an urgent necessity,” he says. “The younger generation has to rise to the occasion.”
Chisholm Lumber’s landmark original mill still stands on the banks of the Moira River in Roslin, Ont., but is no longer operational. The company has built more modern facilities, partly visible in the background, to process its wood today.David LeClair
Sarah Burrows, assistant professor of entrepreneurship at Queen’s University, adds that sometimes a founder’s unexpected death can recalibrate a family business and spark renewal. “Distress usually gets worse before it gets better,” she says. “It peaks around year three before recovery takes hold.”
Both generations ideally work in tandem for multiple years, Mr. Jaskiewicz says. Doug’s son, Peter, 46, returned to Roslin in 2007 to join Chisholm, backed by a McGill University economics degree and a stint in sales at a foreign company in Ottawa. Two of his cousins joined him.
Doug stayed on as an adviser for five years before retiring in 2015. “I was quite happy to let it go once I was sure they could run it,” he says.
As with their predecessors, role division amongst the sixth generation fell into place according to personal skills and interests. Peter is president, managing the wholesale lumber division. His second cousin Jordan, 45, is vice president and oversees the sawmill and log procurement. Another cousin, Patrick Cassidy, 50, is retail manager.
In practice, there is no hierarchy – the titles are largely arbitrary, Peter says. They are equal partners and co-owners who defer to each other’s expertise in their respective domains. “If one of us feels very strongly about something, then we’ll do that,” he says. He adds that his official designation was in part created to facilitate one of his primary responsibilities: communicating with major clients and service providers such as accountants, lawyers and insurance companies.
Chisholm Lumber found new customers abroad after its primary market in Canada, furniture builders and flooring manufacturers, was sidelined by foreign imports in the 2000s.David LeClair
They entered the business when the domestic lumber market was shifting dramatically in the aftermath of the 2008 financial crisis. “Those were really, really tough years here,” Peter says. Chisholm had at the time about 40 customers such as furniture makers and flooring manufacturers in Toronto and Montreal buying hardwood. But imported foreign furniture decimated that industry. “Canadian wood users have been hollowed out,” Doug says. “They had to find new markets, as we did in our generation.”
Peter found new clients in China, Vietnam, Taiwan and the United States. While previous generations conducted business by phone, fax, and driving, 99 per cent of today’s work is by e-mail. China is Chisholm’s main importer; manufacturers there turn red oak, hard maple, and ash hardwood into flooring, including sports floors for gymnasiums.
The sixth generation is embracing the online marketplace in other ways. For example, for 35 years an auctioneer would visit the woodlot every May to sell off excess Chisholm inventory to community members. “We put in a tonne of work to package up hundreds of bundles, working all weekend,” Peter says. But it wasn’t that profitable.
He has improved Chisholm’s margins on the surplus by instead posting new bundles for sale on the company website daily, complete with prices – a rarity in the industry.
“I’ll post it at noon and it could be gone by two o’clock,” Peter says. “We are turning over bundles regularly, instead of once a year. That’s been a huge change for us.”