In this issue
I often refer to myself as the “illegitimate” third generation of Ostbye & Anderson, the Minneapolis jewelry manufacturer founded by my wife’s family in 1920. My father-in-law never liked being a part of the company and discouraged me from joining. Yet after 12 years in other jobs and industries, I brought my experience and skills into the family business in 1978.
The family tree today looks much different than it did 50 years ago. Divorce and remarriage have caused new branches to take root and extend in different directions. Stepchildren are everywhere!
In family-owned businesses, what constitutes a risk management plan? Astute executive teams plan a response to disasters that might impede business continuity. Yet interestingly, most risk management plans fail to incorporate one issue that can have dire consequences for any family-owned business: the estate plans of the family owners themselves.
“The first generation builds the business, the second expands it and the third destroys it.” It is a universally acknowledged phenomenon that few family-owned businesses survive beyond the third generation. While most business owners are highly successful in building and managing their companies, they are often less successful when it comes to transitioning their enterprises from one generation to the next.
More than a century ago, New England pharmacist James P. Whitters invented a nasal irrigant to treat colds, allergies and sinus problems. Today James (Jim) Whitters III, who kept the small family business alive to honor his grandfather, is sniffing out new distribution outlets in response to a spike in demand. The nasal rinse, called Alkalol, has been sold at CVS stores (in the pharmacy department) since 2010. It is also available online at CVS.com, Amazon.com, Drugstore.com and Walgreens.com, and at regional chains such as Bartell Drugs, Harmon Stores and USA Drug.
Do you spend too much time engrossed in Angry Birds, Words with Friends and other popular time-wasting iPad and iPhone apps? Two new family business-oriented apps, available free of charge, offer an educational alternative.
Generation of family ownership: Fourth.
Annual revenues: More than $500 million in 2011.
Number of employees: 2,000 globally.
Years with the company: 35.
First job at this company: I did a little of everything. I packed caps, swept the floor, worked in shipping and receiving, did some artwork and worked on mechanical projects. I even worked on the line making caps. It takes 22 steps to make a fitted cap—I’ve done all 22.
When I went to see The Descendants, I hadn’t read much about the film. I knew only that the performance by the star, George Clooney, had been highly praised by critics and that the director was Alexander Payne, who previous credits include Election, Sideways and About Schmidt. As I sat in the theater, riveted to my seat, I was surprised that the film addressed so many of the issues I encounter each day in my professional life (although, alas, my workdays involve neither Mr. Clooney nor Hawaii, where the action takes place).