Dollar Tree Leadership Transition: Passing the Buck

Abstract

Management succession is a significant issue in many businesses. You put all your energy into your business, but how much time is spent on bench strength planning? Are you ready to hand the reins over and begin a life outside the office? Have you ensured everything you've worked to create will seamlessly help support your heirs? Macon F. Brock Jr. (president and CEO of Dollar Tree Stores), his brother-in-law Doug Perry, and almost family member Ray Compton founded the successful Dollar Tree business in 1986. For many years, they worked hard to develop leaders within the company as an ongoing source of talent. Through their combined efforts, the business grew from a small startup to the number one company in the discount and variety retail sector, generating nearly $2 billion in sales during 2001. As the entrepreneurs thought about retiring, many questions emerged: Who was going to take over leadership of the company? Would they need more than one person? Was there an heir apparent ready to step up? How would they structure the transition? This case presents the challenges of a transition from an entrepreneurial venture to a publicly traded business with a focus on succession management. Excerpt UVA-ENT-0082 Rev. Mar. 18, 2013 DOLLAR TREE LEADERSHIP TRANSITION: PASSING THE BUCK Thinking about the family business—Dollar Tree Stores—Macon F. Brock Jr., president and CEO, focused on the issue of succession. Brock, his brother-in-law Doug Perry, and “almost family member” Ray Compton had founded the successful Dollar Tree retail chain in 1986. For many years, they had worked hard to develop leaders within as an ongoing source of talent. Through their combined efforts, the business grew from a small startup to the number one company in the discount and variety retail sector, generating nearly $ 2 billion in sales during 2001. Enjoying the picturesque view from his second-story office in Chesapeake, Virginia, Brock thought about the type of seasoned professional he would like to see move into his office. As the entrepreneurs retired, who was going to take over leadership of the company? Would they need more than one person? Was there an heir apparent ready to step up? How would they structure the transition? What were the expectations of the extended set of relatives connected with the company about the role of the business for the family? What would the future Dollar Tree executive suite look like? Background: From Toys to Trinkets . . .