The Ghost of Owners Past

By David Graulich

The surprise hit movie of the year, Ghost, tells the sentimental story of a kind-hearted ghost, played by handsome Patrick Swayze, who returns to earth and assists his loved ones through trouble and turmoil. In real life, many family businesses have ghosts, too, and, like Swayze, they can provide heartwarming memories of the company's venerable founder.

But then there are the hobgoblins from the company's sordid past, ugly creatures that feed the public's endless appetite for scandal and intrigue. They haunt the family managers currently in charge, and through the public's eye continually raise the specter of past misdeeds, foul-ups, or transgressions. And short of hiring an exorcist or calling in a team of ghostbusters, there's not much a family business can do to dispel the poltergeist.

Of course, businesses of all kinds have a few skeletons rattling in the closet. But in the public's mind, family businesses are accountable to a different standard. A big corporation is faceless and impersonal, and a new management team is allowed a fresh slate, regardless of past atrocities. But persons running a family business are inexorably linked with what their forefathers did through the continuity of the family name.

There are still embittered residents in New York City's borough of Brooklyn, for example, who revel in dislike for Peter O'Malley and the Los Angeles Dodgers because Peter's late father, Walter, transplanted the baseball team from Ebbets Field to Southern California in 1958. And readers with long memories will associate the phrase "Hearst paper" with the scandalous yellow journalism of William Randolph Hearst, despite the fact that the company's present-day publications — such as the San Francisco Examiner, run by grandson Will Hearst III — have moved upscale to attract yuppy readers.

The current generation at Kohler Co., the Wisconsin plumbing manufacturer, has found that no matter how hard you try to wash yourself of them, ghosts can still send your image, well, right down the drain.

Founded in 1873, the company was run with a far-reaching paternalism that included an employee resort. But in 1934, workers launched a strike that led to bloodshed. The standoff became a contest of wills between the company's president, Herbert Kohler, and Walter Reuther of the United Auto Workers, who called Kohler "the most reactionary, immoral employer in America." The strike, lifted during World War II, endured until 1960, setting a record for longevity. While the company today is run quietly by Herbert Kohler Jr., the mere mention of the Kohler name provokes rage in strong union households.

If there's a lesson here, it's to those young successors-to-be: Don't let your parent become the next Ghost of Owners Past. Unfortunately for some, it is already too late; their folks have crossed over into the growing gaggle of ghouls in-the-making. For them, career choices will be tough ones.

Hank Steinbrenner, the 33-year-old son of New York Yankee owner George, rejected his dad's request to run the franchise after the baseball commissioner demoted the elder Steinbrenner. A younger son, Harold, is said to have a greater interest in baseball. Will the Steinbrenner boys struggle through life, stalked by the roiling ether of their father, or will they benefit from the opportunities created by George's notoriety? Will the children of Donald and Ivana Trump adroitly pursue the art of their own deals, or will they forever be plagued by the spooky presence of The Donald?

To escape from vanquished pyre, the present generation must take pains to disassociate itself from the sins of the past. 'There are no easy answers, and that can only mean one thing: consultants who specialize in expunging business ghosts. The MBA-toting exorcist, the calculator-wielding shaman, the buzzword-speaking sorcerer, and the Tom Peters-quoting doctor of demonology are about to come knock-knock-knocking on our door in search of billable hours.

No offense to the ghosts, but the swooping down of yet another group of dreadfully earnest consultants-each wearing a pinstripe suit and a "Who Ya Gonna Call?" button on the lapel-might be an even scarier apparition.

— D.G.

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November 1990

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