In this issue
Dublin Cleaners got its start in 1934 when Bernard Butler cleared out half his Columbus, Ohio, barbershop to open a dry cleaning store. He soon realized the cleaning operation was more profitable. Hudson Cleaners, as it was known, added a dry cleaning plant, multiple retail locations and a delivery service. By the 1960s Hudson had ended deliveries and transitioned to a primarily wholesale business, cleaning tuxedos for a tuxedo company and clothes for other dry cleaners that lacked their own equipment.
In a letter to James Madison dated September 6, 1789, Thomas Jefferson wrote, "[T]he earth belongs in usufruct to the living . . . the dead have neither powers nor rights over it." But contrary to Jefferson's suggestion, in multigenerational family businesses the earth often belongs to the dead.
Landaal Packaging Systems, a family enterprise based in Flint, Mich., focused almost exclusively on the corrugated box industry for more than half a century. After dramatic changes in both the family and the marketplace, the family began to shift its identity away from the box industry to focus more on the family itself. The U.S. corrugated paper industry was losing the battle with China, resulting in ever-shrinking margins and consolidation of firms. The family had prematurely lost three of the four siblings in the second generation.
Enterprising families are waiting too long to integrate the next generation. Even though succession is arguably the most widely covered topic in the field of family enterprise, many of my clients (and those of my colleagues) are still missing crucial opportunities to engage the next generation early in the game.
Our recent Transitions West 2014 conference in California, a very successful event that drew 220 attendees, focused on "Honoring the Past and Securing the Future of the Family Enterprise." We selected this theme not only to coincide with our own 25th anniversary, but also to celebrate the history and legacies of family businesses around the country.
In this issue's Toolbox column, I review a book entitled The Voice of the Rising Generation: Family Wealth and Wisdom, by James J. Hughes Jr., Susan E. Massenzio and Keith Whitaker. The authors, who are advisers to high-net-worth families, point out that many people who grew up in business families feel stifled by their ancestors' success. Too many of these heirs, feeling stuck in the shadow of an illustrious business founder, attempt to relieve the pressure by unhealthy means, including overspending and substance abuse.
When the owners of Hill & Markes Inc. talk about sustainability, they are referring to their company's longevity as well as their environmental responsibility. The wholesale distribution company has survived recessions and other challenges over the course of 108 years—67 of them under the current family ownership. CEO Neal Packer, 65, says the company's success stems from the family's ability to stay focused, capitalize on their talent and run the business with high morale and integrity.
Paul Mangiafico Sr., an emigrant from Sicily to Connecticut, had an entrepreneurial bent. After running a beauty salon for a time, he set his sights on the then-booming industrial sector. In 1947, he created Peter Paul Coil Co. to sell to the television and locomotive air brake industries. The result was a lasting family business that today is being guided toward expansion by his grandchildren.