A fine Biltmore welcome to Generation 5
The descendants of George Vanderbilt are working on various transitions, including an educational initiative for the fifth generation. A member of the board of advisers describes the extensive work the family has undertaken.
The Biltmore Estate in Asheville, N.C., has been a magnet for millions of people eager to see the legendary property and experience the hospitality first offered in 1895 by George and Edith Vanderbilt. The estate’s 8,000-plus acres in the Blue Ridge Mountains, featuring timeless landscape design by the prolific Frederick Law Olmsted and productive agricultural acreage dedicated to sustainable practices, provide an impressive backdrop for the spectacular Biltmore House. Built by George Vanderbilt and completed in 1895, Biltmore House was inspired by the French chateaus of the Renaissance and is believed to be the largest private home in the U.S., then and now.
The estate’s vineyards and prize-winning winery, walking and riding trails that meander for miles, scenic vistas, and varied restaurants and shops provide a delightful respite from modern life, especially captivating for guests who stay at the Inn on Biltmore Estate. A sense of serenity descends as visitors move through the three-mile-long approach road toward Biltmore House at the heart of the estate, and Vanderbilt hospitality takes over.
Not everyone on the property is relaxing, however. The estate and related businesses, now called The Biltmore Companies, are owned and operated by the descendants of George Washington Vanderbilt (1862-1914), himself the youngest grandchild of railroad baron Cornelius Vanderbilt. For them, and their nearly 2,000 employees, bringing the magic of Biltmore alive and turning ambience into profit is hard work, though they rarely let it show.
The Biltmore Estate, the reputation of which supports the other Biltmore companies, was turned into a viable attraction business by George Vanderbilt’s grandson William A.V. Cecil, known far and wide as “Mr. C.,” who remains chairman of the board. The Biltmore Companies are now run by the fourth generation (“Gen 4”). William A.V. Cecil Jr. (Bill) is chief executive officer; his sister, Diana Cecil Pickering (Dini), is vice chair and president of the nascent family office.
Bill and Dini strive to offer guests and customers unforgettable experiences and high-quality products. In addition, the fourth-generation members have been working with foresight and creativity for several years to prepare their children to assume the responsibilities of owning and likely eventually managing The Biltmore Companies. While only the two siblings represent Gen 4, there are five members of Gen 5. They are three children of Bill Cecil and his wife, Ginger: Ryan (age 24), Aubrey (21) and Bill III (17); as well as the two sons of Dini Pickering and her husband, Chuck: Chase (24) and Devon (20).
It has been my privilege to serve this remarkable family and the business they have created as a member of The Biltmore Companies’ board of advisers since 2003. The board of advisers, consisting of three members with varied backgrounds, serves as a sounding board for management and the family as the Biltmore team continues its long tradition of building on the strength of each successive generation. It has been an extraordinary experience to work with each generation. The current patriarch, Mr. C., insisted the estate could be profitable and made it so. The members of Gen 4, Bill Jr. and Dini, have added a variety of new attractions and businesses and in the doing have grown revenues radically and created a steady record of growth in profitability. As for the Gen 5 members, none are employed by Biltmore at present, but all are building their own portfolios of expertise to bring to bear on the family business. As members of Gen 5 join the board of directors, it seems appropriate to stand back and look at the steps that both the family and the business have taken to prepare for their active engagement.
The business of Biltmore
George Washington Vanderbilt was the youngest son of William Henry Vanderbilt, who was the oldest son of “Commodore” Cornelius Vanderbilt. The Commodore, father of 13 children, according to one story earned his nickname by borrowing $100 from his mother to buy the first of what became a large fleet of ferries serving the New York area. He amassed enormous wealth through his shipping holdings and by later investing in railroads, and became the most prominent industrialist of his time. George, youngest of Cornelius’s many grandchildren, inherited not only a large piece of his fortune, but also his father’s love of art, music, languages and letters. Credited with speaking eight languages, George assembled a remarkable team to help him achieve his dream of creating a self-sufficient estate in the Blue Ridge Mountains.
Following a trip to Europe with prominent architect Richard Morris Hunt, the plan for the 250-room Biltmore House was developed. Frederick Law Olmsted, considered by many the father of landscape architecture, joined Vanderbilt and Hunt in 1888. Less well known but of considerable importance was the contribution made by Gifford Pinchot, who joined the team in 1892, bringing pioneering scientific forest management techniques to the U.S. from Europe. His successor, Carl A. Schenck, created the Biltmore School of Forestry, the first such school in the nation. Chauncey Delos Beadle joined the team in 1890 to assist with agriculture, forestry and horticulture. Beadle was named superintendent of Biltmore Estate in 1904 and remained a fixture on the estate for 55 years.
George and Edith believed firmly in their ability to be catalysts to improve quality of life for Western North Carolina residents. Together, they created initiatives, programs, industries and schools that forever changed the face of this part of the Blue Ridge Mountains. George died in 1914, having expended much of fortune on the estate, though he made enormous progress toward achieving his audacious dream. Following his sudden death and the further ravages of war, Edith preserved the estate’s financial viability by selling approximately 80,000 acres to form what would become one of the U.S.’s first national forests.
When Mr. C. took responsibility for running the estate in the early 1960s, it was losing about $250,000 each year and his notion of turning it into a profitable business appeared foolhardy. By 1968, the business had turned a profit: $16.24. The elder Cecil’s willpower and drive pushed the estate forward as he developed marketing strategies, restored many parts of the property and added a vineyard and a winery in 1985, against all conventional wisdom. When Bill Cecil Jr. took over as CEO in 1995, the estate’s centennial year, revenues were hovering around $30 million, and the estate was turning a modest profit.
The business of the Biltmore Companies today is complex. Under the stewardship of Bill and Dini, more than a million guests come through the gatehouse each year, and off-property revenue streams continue to develop. Animated by a strong sense of mission in preserving not only the estate but also the core values of authenticity, hospitality, quality, integrity, profitability and leadership, Gen 4 has brought the Biltmore Wine Company to national prominence and has developed Biltmore for Your Home products, available through various retail stores in the Southeast.
The Inn on Biltmore Estate, currently ranked first among the 57 hotels in Asheville by TripAdvisor.com, was added in 2001 in response to visitors’ requests to stay on the property. Bill and Dini developed the inn to allow guests to stay as close as possible to the historic house and enjoy the ambience without risking the remarkable collections of fine art, rare books and furniture, and delicate fabrics within the house itself. Other recent additions include Antler Hill Village, an expansion of the estate’s retail, restaurant and display space, opened in 2010; Biltmore Inspirations, a home-based hospitality and party-planning business introduced nationally in 2011; and a solar farm to provide energy to the estate, which to the family’s amazement is attracting its own set of visitors.
In 2003, revenues crossed $100 million, and they have continued to grow. More projects, always measured not only against financial and business values but also against Vanderbilt standards—the “What would George Vanderbilt say?” test—are on the drawing board. Multiple generations have now added to the magic of Biltmore. In May 2012, Biltmore and the Cecil/Pickering family received the Century Award as part of the North Carolina Family Business of the Year awards, presented by the Wake Forest University Family Business Center and Business North Carolina magazine.
Engaging Gen 5
How does the family sustain this remarkable trajectory of growth, success and—most important to them—authenticity and fidelity to the spirit and legacy of George and Edith Vanderbilt? And how do the family and The Biltmore Companies bring Gen 5 into an active understanding of their roles and responsibilities as heirs to such a remarkable legacy and vibrant business? Bill and Dini’s parents remain on the board of directors, along with Bill and Dini and their spouses, Ginger Cecil and Chuck Pickering. Most of Gen 5 now serves on the board as well, and ownership of the various entities is spread among the generations. The Biltmore Companies also rely on a board of advisers, consisting of non-family members, to serve as a sounding board for various business issues and initiatives.
Bill and Dini started early, recognizing that to preserve the estate and continue to build The Biltmore Companies, they needed to prepare their children to handle their responsibilities. Dini, in particular, has studied family business models. She has participated in various family business institutes and spoken at some educational programs. The family has also hosted their own events, bringing family business owners together to study and compare best practices while enjoying the pleasures of Biltmore Estate.
Through studying other families’ successes as well as their failures, Gens 3 and 4 realized that they needed to focus on developing and maintaining communications methods that would allow all family members to understand not only the estate and its related businesses, but also the underlying values and sense of mission inherited from George and Edith Vanderbilt. Though the five members of Gen 5 have grown up on the estate, breathing it in daily, Bill and Dini knew that was not nearly enough. They also needed a way to communicate with their children and across the two branches of the family that would help them to avoid the trap of knowing each other too well, assuming understanding that was not in fact there, and/or bringing irrelevant emotional baggage into the business.
The family governance system
Under Dini’s leadership, with support from Bill, several initiatives began to take shape. First, Dini focused on compiling a series of policies called the Family Charter. The charter clarifies what family members can expect from the business and vice versa. It addresses issues that will arise from an increase not only in the number of family members, but also in the number of generations involved in the business. The charter is designed as a living document, to be refined over the years.
Dini made sure that the process of developing and refining the charter itself served as a device to help family members understand their responsibilities and the need to communicate with each other. At present, for example, Gen 5 members become official shareholders and join the board of directors when they turn 18. Should they or their spouses desire to seek employment in addition, the Family Charter sets out a framework for them to follow, including criteria regarding minimum education and experience levels they must have achieved to be considered.
In a parallel effort, Dini began family meetings, with every member participating, twice a year. These meetings, often held in resort locations, started when Gen 3 were in their 70s, Dini and Bill and their spouses were in their 40s and Gen 5 had just broken into double digits. The agenda combined fun and relaxation with various kinds of presentations and discussion about the family and the family business. As Gen 5 grew, the balance shifted to greater focus on the business per se. The series of family meetings will soon be rechristened the family council.
Though dedicated to maintaining family ownership of The Biltmore Companies, Dini and Bill have included a variety of advisers and consultants to be sure that they are drawing ideas from a broad base, choosing best practices developed by others and adapting such practices carefully to fit the Cecil/Pickering family’s specific circumstances.
For example, the 17th family meeting, held in January 2012, was facilitated by Steve Miller, a longtime Biltmore executive who is now an independent adviser to family businesses. Also speaking at the meeting were Stephanie Brun de Pontet, a family business consultant and author, and Steve Watson, Biltmore’s chief financial officer. I participated in the meeting in my capacity as a member of the board of advisers.
Each participant had a carefully specified role to play. Miller ensures continuity and follow-up on items developed at each meeting, and has driven such projects as asking each family member to develop a life plan. He also helped Dini follow up on topics developed at the June 2011 meeting by encouraging each family member to present one topic at the January meeting.
>Dini’s presentation focused on family governance, while mine addressed corporate governance. Ryan Cecil, a member of Gen 5, discussed wealth preservation, looking to the Rothschilds and the Rockefellers for lessons. Chuck, Dini’s husband, gave a presentation on relationships with government and civic organizations. Bill Jr.’s son Bill III delivered a presentation entitled “Managing Wellness: Physical, Mental, Social, Intellectual and Spiritual Health.” Biltmore CFO Steve Watson provided a brief talk on ways to establish and maintain credit. At the next meeting, to be held in August, Chase Pickering, Dini and Chuck’s older son, will speak about philanthropy, and CEO Bill will discuss the growth of Biltmore. His wife, Ginger, will focus on generational differences. Devon Pickering and Aubrey Cecil will present on work/life balance and land use planning, respectively.
In addition to these presentations, the five cousins met as a group with Stephanie Brun de Pontet to discuss issues involved in ensuring that Gen 5 members who join the family business can do so successfully. The wide-ranging, candid discussion gave the cousins an important forum, working with an experienced guide, to develop their own ways of communicating about the business without their parents’ and grandparents’ involvement.
Dini’s next steps
Dini concluded the January meeting by presenting some additional aspects of family and corporate governance, to be considered at future meetings. Reflecting the arrival of Gen 5 in the Biltmore boardroom, her focus is moving toward clarifying the various hats that family members wear and ensuring that everyone understands the rights and responsibilities that fall under each role: family member, shareholder, board member, chief executive, manager, employee and spouse. This sharpened focus on role also includes, importantly in her mind, the development of a system for managing the relationship between the family council and the board of directors of The Biltmore Companies.
She is also moving right along to an additional initiative: creating a family office. To Dini, it will not be simply an administrative convenience or a money management entity. Instead, she sees it as the asset management center for all family members, designed to encourage each member of the family to use effectively all the capital he or she has available—human, intellectual and financial—to build a self-reliant and richly developed life. In the hierarchy of values espoused by this remarkable family, its members are clearly their most precious assets.
Deborah Hicks Midanek (DHMidanek@SolonGroup.com) founded Solon Group, a turnaround and business development firm, in 2005. She specializes in governance issues and has served on 19 boards, public and private, since 1990. She has been a member of The Biltmore Companies’ advisory board since 2003.
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The Cecil/Pickering family’s efforts to bring the next generation along as owners and stewards of The Biltmore Companies can serve as a model for other families. Here are some suggestions, based on their experience.
• Start early in teaching the next generation about the business and the values that drive it.
• Start even earlier if more than two generations and more than one nuclear family are involved.
• Develop an effective format for family meetings focused on developing communication techniques that allow close relatives to address difficult subjects without tearing relationships apart.
• Consider pulling various written and unwritten polices together into a thoughtful family charter.
• Remember to treat the charter as a living document and keep updating it as the family grows.
• Teach aspects of family governance and corporate governance and build effective communication channels between the two.
• Invite outside advisers—more than one—to participate in meetings in order to keep the information fresh and the boredom level low.
• Build fun and enjoyment into the process.
• Avoid passive presentations. Encourage family members to get involved in learning and teaching each other.
• Recognize that while conflict is inevitable, using it to arrive at even better solutions is the goal.
From our Articles Library: Studying the issues
A 2006 profile of the Biltmore enterprise in Family Business Magazine described the efforts of fourth-generation siblings Dini Pickering and Bill Cecil Jr. to investigate family business issues.
The siblings attended a leadership training program, the article said. “Cecil and Pickering have also been educating themselves about family businesses so they are better equipped to sustain their fourth-generation sibling partnership.”
At the time of the 2006 article, the fifth-generation members’ ages ranged from ten to 18. Now that most of Generation 5 are in their 20s, the Cecil/Pickering family is focusing their education initiatives on bringing the next generation along.
To read the full 2006 article, see our Articles Library at www.familybusinessmagazine.com.