By Dave Donelson
Most businesses owe their existence to their founder's genius, talent, luck or just plain hard work. One of the major obstacles to passing those companies to family members is the need to replace the founder's vision, not to mention his or her personal connections. The closer the company's success is tied to the founder's persona, the more challenging the transition.
Great White Shark Enterprises epitomizes that challenge. The brainchild of golf legend Greg Norman, 60, the company is currently preparing for transition to the second generation of family leadership. The first order of business for Norman and his children is to make the company independent of his oversized presence without losing the many advantages of identification with the founder. That's difficult when everything about the company, from its name to its largest revenue producers, is related to the man.
Greg Norman is one of the most recognizable personalities in professional golf. His free-flowing mane of white-blond hair, million-dollar smile and headline-making lifestyle are recognizable even to non-golfers. Golf fans know him as a Fox Sports commentator for the U.S. Open and the winner of 90 professional tournaments around the globe—including two British Opens—and second-place finisher in several heartbreakers, the most notable being his collapse in the final round of the 1996 Masters. Norman was ranked as the No. 1 player in the world for 331 weeks, a record second only to Tiger Woods'. Norman was also the first player in professional golf to exceed $10 million in career earnings, a milestone he achieved in 1995.
Like many professional athletes, Norman earned more off the field than on it through endorsements, corporate appearances and other revenue sources tied directly to this fame. Unlike most, though, he didn't just sell his name. When he created Great White Shark Enterprises, he invested in it. (Norman, a native of Australia, acquired the nickname "The Great White Shark" because of his reputation for shooting at sharks that swam near his fishing boat, according to a 1984 article in People.)
"I am lucky enough to establish a business off the back of my professional golf career and develop a logo and brand that's very recognizable," says Norman. "In golf, you have a player that dominates over about a 15-year cycle. I was there from the mid-'80s to the late '90s." When he reached the end of that period, he says, he had to make a decision. "I was not going to be a ceremonial golfer and I wanted to move on in life," he recalls, "so I made a decision to focus on building a business away from the game."
That business, Great White Shark Enterprises (GWSE), was founded in 1992 and is now a multinational private holding corporation headquartered in West Palm Beach, Fla., with offices in Sarasota, Fla., and Beijing, China. GWSE's operating companies encompass a range of industries, including real estate, financial services, apparel, eyewear and gourmet beef.
The largest single operation at present is Greg Norman Golf Course Design, which has built more than 90 courses on six continents. The design business opens the door to investments in real estate developments, including projects like Medalist Village in Jupiter, Fla. Norman not only built a brand around his name, but also used the contacts he made in golf to find partners and investors for many of the holding company's components. While he declines to release annual sales figures, Norman says published estimates of $300 million are woefully short.
The second generation's expanding roles
Norman's son Gregory, daughter Morgan-Leigh and son-in-law Chris Dillavou are deeply involved in the business. "Quite honestly," Norman says, "when I first started GWSE, I was hoping I'd be able to open an avenue for my kids, but you never know how they are going to develop and find their own way to happiness. It is a very rewarding feeling to have your children come into the folds of your business."
Morgan, 33, grew up traveling the world with her father. She has worked for the company for about seven years, five overseeing the Greg Norman Estates wine business and the last two as creative director, in charge of reshaping the brand to reflect the company's plans going forward. "Because I've been so involved with the company since I was a child, I've seen it evolve and been able to get behind all the actions," Morgan says. "Even though it's all related to him, he's always asking for our opinions and thoughts. He takes them into account, too, so it's really a family business 100%."
Gregory, 30, has officially been with the company for four years. "I am transitioning from being a full-time athlete to being a full-time businessman using the template of what my dad has done," he explains. His transition is somewhat different, though, in that he's a professional kiteboarder and wakeboarder, a sport he chose so he wouldn't have to live in his father's shadow in professional golf. Today, Gregory is spearheading a new GWSE undertaking, building and operating cable wakeboard parks, which use pylons and wire cables rather than boats to pull boarders around the water. Contracts with Myrtle Beach and North Myrtle Beach, S.C., and Palm Beach County, Fla., have been signed, and construction is expected to begin soon.
Gregory also oversees the partnership between video game developer HB Studios and Greg Norman Golf Course Design. Greg Norman has endorsed an HB video game in which players can create their own virtual golf course and then play it along with others they invite through social media. A big side benefit of the product is that the real golf course design company can input its preliminary CAD drawings of a proposed course into the software and show it to clients before construction begins.
Morgan's husband, Chris Dillavou, 32, joined the company in 2013 from a VP position with international real estate developer Brookfield Office Properties, where he managed leasing for its Southern California division. He was named GWSE's chief operating officer in August 2015. "I had just finalized my MBA and was in the mountains getting ready to climb Mount Rainier when I got a call from Greg out of the blue," Chris says. "He said he wanted to reposition the battleship, so to speak, and invited me to join him to help."
The decision was far from automatic. Morgan was deeply involved in the GWSE wine business, but Chris had a highly successful career outside the family. "Morgan and I had some concerns, of course, especially my going from a big institutional firm to a family business, not to mention moving across the country with a long-term commitment," Chris says. "When you move to a family business, it's not like you can just decide you don't like it and walk away." Their approach to the decision? "We tried to handle it as though it were an arm's-length transaction and analyze all the facts and politics and understand who all the stakeholders were in the office. Family businesses can be absolutely wonderful places, but we've all heard the horrible stories, too."
Looking ahead 200 years
Once the second generation was on board, Greg Norman set to work preparing the company for the future. "I had a corporate retreat and gave my team my 12-year horizon and my 200-year horizon," he says. "They all looked at me like I was crazy, but I told them you've got to have a long-term vision. That's what makes the company generational." Norman sees tremendous opportunity in both the near and far terms. "I believe my company has only achieved 20% of its potential," he says. "There's a lot of growth in the wine business and the clothing business. The real estate business is cyclical, but if you're diversified globally, there is massive potential." Current GWSE real estate projects stretch from Tupper Lake in the Adirondack Park in upstate New York to Keppel Island, a World Heritage site on the Great Barrier Reef.
The family recognizes that the key to the future depends on reconfiguring the brand to endure beyond Greg Norman's fame. "That is a major concern of his personally," Morgan says. "Prior to my taking this position, we didn't have anyone overseeing the brand and its future, which is why he asked me to come on board: to determine how the brand can evolve without him involved. If he passes away, what do we do with the company?
"We're lucky that we have him to represent and lead the company now, but in 50 years we won't, so we need to start planning for that," Morgan says. She is convinced it can be done. "If you think of Lacoste, a lot of people have no idea that René Lacoste was a French tennis player. They just think of the company in connection with the alligator logo that has crossed multiple market segments and multiple generations. It has apparel and fragrances and watches that exist outside the identity of a single person." The colorful Great White Shark logo will be unveiled in new iterations next year.
In the meantime, the family is working to grow the company in both golf- and non-golf-related directions. "Our investment vehicle and private equity business are two of the most entrepreneurial things we've engaged in," Chris says. "About a year ago, we closed on our first private equity acquisition. We partnered with Kohlberg & Co. and acquired Troon Golf from Goldman Sachs. It's the largest third-party golf management firm in the U.S."
In addition, Norman and his partner David Chessler saw an opportunity during the recent recession to become involved in asset-based lending on an informal basis, an idea that turned into the GWSE Opportunity Fund. "I reached out to some friends and raised quite a lot of money," Norman explains. The high returns on their investment "became a pretty compelling story," he says. "We're growing that now, and it can be as big as we want it to be."
While GWSE is owned by Norman, outside partners are involved in many of the companies. Chessler, for example, also partnered with Norman on GPS Industries, which provides location technology for golf carts. Among Norman's other partners are Macquarie Bank Ltd. (real estate), the Tharanco Group (apparel) and Australian Agricultural Company (beef). One of the main differences between Norman's arrangements and typical sports figure endorsement deals is that almost all of his include significant (often controlling) equity stakes, not just short-term deals to use his name.
Norman sees family ownership and management as essential to the company's future. "I am very patient about building a business," he says. "Sometimes it takes seven to ten years to see the fruit of your hard work. And you have to have people around you who are as patient as you are and have the same belief in where you're trying to take it."
Governance may evolve along with the company, but currently GWSE relies on an executive committee composed of Norman and the three G2 members as well as CFO Jack Schneider and two senior vice presidents who run the golf course design business, Jason McCoy and Chris Campbell. At this early stage, they aren't yet working with any family business consultants, although that hasn't been ruled out.
Becoming a family business
In the meantime, they are all adjusting to the realities of becoming a family business. "The most different part of my job is coming into a family office that also includes a lot of Greg's closest friends," Chris says. "You have to learn how to navigate relationships, personalities and opinions, but it's been a good exercise for all of us to get there."
Morgan must address the challenges of working with her husband as well as working for her father. "Our offices are right next to each other, but we rarely connect during the day," she says. "There are nights when Chris and I go home and we sit down to dinner and talk about business. But there are also nights when we need a break, so we just shut it off."
Even with a disparate collection of business ventures scattered around the globe, Norman's outsized persona sets the tone for the family—and everyone else in GWSE. "My dad has always gone by the credo 'attack life,' whether on the golf course or in business," Gregory says. "He's always on the go, always working hard. That permeates our corporate culture. We all work hard in our own territory, but we also rely on each other for advice."
Morgan says a clear reason to bring the family together in GWSE was to forge a succession plan. Given the birth of her son and Greg's first grandson, Harrison, in 2014, and the imminent arrival of a second grandchild in 2016, succession planning is definitely on the agenda.
Greg Norman has said he intends to withdraw gradually from day-to-day operations at some unspecified time in the future, although there's no sign of a slowdown at this point. He hopes his kids are not only ready but also eager to pick up the slack, although he's a realist. "Who knows what they will do?" he says. "Their decisions are theirs to make, and I'll respect them no matter what."
Chris is practical about the future as well. "I don't know that I have a crystal ball," he says, "but I would like to think that the decision to keep the business family-managed as well as family-owned will be made based on what's best for the long-term health of the company. We're not here just to provide jobs for ourselves; we're here to build a company."
Morgan echoes that theme as she explains her take on her father's 200-year vision: "He wants to see it come to life through my brother and myself, my children, even my children's children. He thinks this business will be around for the long term, so this vision should be actively worked on today."
Dave Donelson is a business writer in West Harrison, N.Y., and the author of the Dynamic Manager Guides and Handbooks.
Copyright 2015 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permission from the publisher. For reprint information, contact bwenger@familybusinessmagazine.com.