Family-controlled firms now make up 19% of the companies in the Fortune Global 500, up from 15% in 2005. I recently spoke to five enduring private companies that are part of a new book exploring family-owned business, Family Spirit, about what has allowed their family's legacy to continue to succeed over time. As we approach Father's Day and honor the powerful influence of fathers across the world, I asked these industry leaders to share a quote about what they learned from their father that has shaped their own approach to running the business today.
Glenfiddich Single Malt Whisky
1963 was the year the whisky world changed forever when Sandy Grant Gordon and Charles Grant Gordon, following in the footsteps of their pioneering forefathers, took the bold decision to launch Glenfiddich Straight Malt – the term used to describe single malt Scotch whisky – worldwide, something no other distiller had done before. Previously blended whisky dominated the market and single malt was only available on request to very few in the know; today, Glenfiddich is the world’s most awarded single malt Scotch whisky. Peter Gordon, fifth-generation family member and board director, William Grant & Sons, discussed what his father and uncle taught him about taking risks:
One of the characteristics we saw again and again while working on the Family Spirit book was that enduring family businesses are run by people who take risks. I believe one of the elements that led my father and my uncle to become risk-takers was that their father died incredibly young – he was only 53 – Sandy, my father, was 22 and Charlie, his big brother was 25. My father was an academic, and my uncle was a turbo energetic sales guy. At the time in 1953, my father was asked to go into the business by his dying father in order to create some kind of balance of personalities. The business had to have the firebrand commercial drive of my uncle and therefore, required the steadying hand of my father, and I think that has shaped my own thinking. For any team, you need a combination – you don’t want fifty people who are identical, and you actually want many, very different shapes to the jigsaw so when they interlock, it can be a stronger whole.
Mouawad
Powerful and discerning clients worldwide have made Mouawad their luxury brand of choice for more than 120 years for its exquisite jewelry collections and bespoke diamond masterpieces. Throughout four generations of ownership, Mouawad’s goal has been to build lifelong relationships with its customers by always placing trust at a premium. Fred Mouawad, joint chairman of Mouawad, recalled how he learned that trust is the most vital part of his family’s business:
What we learned from our father is that our reputation is the most important asset we have. It’s not the money we have in the bank or the diamond inventory we hold that defines our wealth – it’s the way we treat our suppliers, employees, and clients that matters. Our father cultivated relationships with his clients and built a reputation for being an expert jeweler that can be trusted for offering the right quality at good value. It was not uncommon for clients to entrust him by commissioning bespoke pieces at a pre-determined price and for him to charge less if he was able to source at lower prices. He was tough with his suppliers on prices, but was very quick at making all due payments in full. That reputation gave him the ability to buy well and sell to his clients at competitive prices. We carry the same principles he inculcated in our business today.
Lundberg Family Farms
The current market leader and largest organic rice producer in the United States, the Lundberg family was a pioneer of sustainable and organic farming methods long before they became fashionable, much less profitable. The Lundbergs believed that if they focused on making the business better, bigger would come later, and first and foremost the family has always focused on leaving the land better than they found it to benefit future generations. Homer Lundberg, a second generation founder of Lundberg Family Farms, shared a memory on the generosity that remains a core value of the farm today:
The most important thing that people can do in their business – and in life – is be generous. That was one of the best lessons my dad taught me. I’m the youngest of four brothers, but my dad always respected each of our opinions and never put us down – he only built us up and found the good in each of our ideas. My brothers and I learned to follow that same example. My oldest brother, Eldon, naturally assumed the position of leadership after my dad, but he always said, “I’m the first among equals” – we each carried the same weight at the table. Generosity is the most valuable thing you can pass down to future generations – generosity to your family, your employees, the people around you and the community.
Discover the timeless advice that the world’s great thinkers, billionaires, writers and businesspeople have to offer.
Luigi Lavazza S.p.A.
Serving over 17 billion cups of coffee a year, this Italian coffee company recently celebrated 120 years in business and today is the seventh largest coffee roaster in the world. Lavazza credits this success to its strong partnerships, with both its coffee suppliers as well as its own employees – making clear distinctions between ownership, governance and management roles is how the Lavazza family intends to preserve the high-performance culture and healthy working relationships that both family and nonfamily employees enjoy. Forbes spoke to Francesca Lavazza, fourth-generation family member, about her father’s role in her own decision to join the family business in 2005 as its corporate image director:
My first experience in the company, right out of university, was short but significant: my father invited me in for a trial and there I was — not without a certain degree of performance anxiety — in customer service, telephone in hand, taking incoming calls, some of which inevitably included complaints. I was young, enthusiastic, and of course, inexperienced, but determined to do my best. I was lucky because my father, who was a very private person and always respectful of those around him, never forced me to work at Lavazza, although he often tried to show me how much more important human capital had always been to our family than economic capital, a message that I strongly agree with and try to never forget since I decided to permanently join the company.
Young's Market Company
Founded in 1888 by Peter M. Young, change has been the mantra for Young’s Market Company from the very beginning. What started as a purveyor of high quality food products has pivoted no less than six times since its beginnings; today Young’s is the fourth largest wine and spirits distributor in the country. Vern Underwood, chairman of the board, Young’s Market Company, recounted what he learned from his father about decision-making and stakeholder value:
When I was a young man I remember questioning my father when he made a decision contrary to what I saw as a natural and obvious benefit for the company’s owners. He told me, ‘Make all important decisions based upon what is best for the company, not what is best for individual family members or other stakeholders.’ While the interests of Young’s and of those who own it often coincide, that is not always the case. I have followed my father’s counsel during my leadership of Young’s and I hope I have instilled that guidance in my sons as they take over the company.
Denihan Hospitality Group
Denihan Hospitality Group has been in business for 52 years, but the family enterprise originally began as an exclusive dry cleaning business on the Upper East Side of Manhattan (Denihan Cleaners & Dyers) 100 years ago. Benjamin ‘Bud’ Denihan, Jr. diversified the family business in the early 1960s when he began to purchase, build and manage apartment hotels in Manhattan. Bud’s son, Benjamin “Patrick” Denihan, who is Co-CEO of Denihan with his sister Brooke, recounted what growing up with his father and grandfather taught him about running a hotel empire:
When our grandfather opened his dry cleaning business 100 years ago, he always said that if his name was to be on the business, the quality of work must be something he was proud of – and he knew that if his employees were happy, his customers would be happy. All of us, like my father and his siblings ahead of us, were expected to work in the family business from about the age of 10 to learn the value of hard work. We were exposed to the dry cleaning business at a young age and later worked our way through the ranks of our hotels doing every conceivable task. Through this I saw how Dad always led by example. I remember being with him at a construction project one day when the guys were being particularly slow. My father – in his tweed jacket – grabbed a wheelbarrow and went to work, picking up the pace in the process. Everyone on the site just immediately followed suit, words weren’t necessary.
Mitchell's Stores
Known the world over for exceptional customer service, exquisite designer clothing, and multi-generational relationships with designers and customers alike, the original “Ed Mitchells” was founded in 1958 and today remains 100% family-owned and run by seven third-generation family members. Jack Mitchell, CEO, shared with Forbes what his dad referred to as the first rule of selling:
Dad always said to Bill and me and those grandchildren in the business at the time... he always said the first rule of selling the Mitchell way is ‘you have to be there." Always be on the selling floor. Now this sounds simple and obvious, and it is, yet so many times busy store owners or CEOs are in their offices or traveling somewhere to look at a new collection. Our focus, especially during busy times, Saturday and holidays, is having Mitchells on the selling floor.
To read more about these companies and the other family-owned businesses in Family Spirit, you can purchase the book on Amazon.
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