JD Products relies on complete trust, contentious meetings

Like a lot of small, family-owned companies, Minnesota custom injection molder JD Products Inc. is dealing with generational succession issues. It's navigating the waters from its second generation family ownership to potentially, its third.

The Denney family, which owns the Vadnais Heights, Minn., company, prides itself both on tight family connections, the kind that let everyone speak bluntly, and on making decisions that put good business first, ahead of family.

The family members say they enjoy working together, but concede the family dynamic is sometimes contentious.

The second-generation owners, brothers James Jr. and John R., have spent almost 40 years in the company, assuming ownership in 1999 from their father James Sr., who started JD Products in 1974.

The third generation, brothers William and John J., are both in their early 30s, working full time in the company. They want a chance at ownership one day.

“It's definitely what John and I want, but we have to prove ourselves to the current ownership,” said William Denney.

In a group interview with all four Denneys, James Jr., the production manager (and uncle to William and John J.), echoes that thought.

He said his father James Sr. stepped back gradually over several years, as his sons took on more responsibility: “We need to see that out of Bill and Johnny.”

Beyond generational change, the company also faces changing market conditions.

The small firm, with 47 employees, 17 injection molding machines and $7.2 million in annual sales, has never had a marketing department. That has served the company well up to now.

“We've kind of grown by word of mouth and current customer base,” said John R., the president. “The younger generation, they kind of want to light the world on fire.”

So the company is now trying to be more active in market development. John J., who is 30, joined the company after working as a lawyer, and is focused on developing new business.

His goal is getting company sales to $14 million by 2021.

The new focus on marketing, the company said in comments to Plastics News, is partly a reaction to the more globalized marketplace: “The outsourcing of high volume plastic manufacturing has become a strain for companies operating in the States.”

Family goals

John J., the director of growth and development, said he likes the idea of working toward a common goal for the family: “If you're in the middle of a daily grind, you can grind it out if you know you're working for your family.”

Indeed, the shop floor can be a real family affair.

All four Denney family members in management started in their teens and either stayed or left and came back. William, the warehouse manager, has worked full-time for 14 years, since he was 18.

John R., 58, and James Jr., 54, have both worked full-time at the company for nearly 40 years, operating presses initially and before assuming management roles.

Almost all of the Denney grandkids have worked at JD Products at some time, the company said.

But not all of them have worked out. William recounted some lessons learned when he was passed over promotion because he wasn't ready for the new job.

“There is complete trust among ownership,” John J. said. “Our ability to say exactly what we mean, instead of tip-toeing around issues for fear of professional repercussions, gives us a distinct advantage in getting to the heart of a problem quickly.”

Of course, it has its downsides, because “the family dynamic can make for contentious meetings,” the company said. “Emotions can run high on occasion, but we are all thick-skinned and understand that we all have the company's best interest in mind.”

The company has grown over time: in 2011, it bought a Minnesota mold making company, Northland Tool, and moved its operations into its Vadnais Heights factory.

There have also been some ownership changes at the top to navigate: Tom Denney, the third brother of James Jr. and John R., was bought out in 2012.

It was a business decision that while initially contentious was kept separate from family relations, said John J. He and William are Tom's sons.

That change does create a different dynamic for the potential transition to the next generation, from uncles to nephews, rather than father to sons as in 1999, John J. acknowledged.

But it's a situation the Denneys say they feel confident they can navigate, if they choose. Family members say the company culture was laid down by the late James Denney Sr. when he started JD Products.

“My grandfather was very salt of the earth,” William said. “That really bled down to the generations.”

Family ownership has worked from 1974 to 2016, and the Denneys say they hope it will continue.

“There are a lot worse situations you could be in than working for your family,” William said. “The pros definitely outweigh the cons.”

Read an overview of family-owned businesses and find links to other profiles.