For Michael Kamins and his brother Pat, inspiration can come from anywhere.
Michael is the second-generation CEO of the family’s adhesives business, and Pat is the COO. Together, they run FPC Corporation, their main company out of Wauconda, Ill., and Surebonder, the operation that manufactures their glue sticks and also serves as their trade name.
They sell glue guns and glue sticks to the industrial market and retailers. Often, they introduce new products in response to customers’ requests, but sometimes they get ideas from their own lives.
A characteristic example: Pat was working on an upholstery project at home when he became fed up with his staple gun. It was tough to pull the fabric while simultaneously squeezing the trigger and pushing down on the head of the staple so it would sit flush. He wished he could just press a button and shoot a staple.
So, Michael found an engineer to help make that a reality. “We designed a TriggerFire staple gun so you could preload it, cock it and then just hit a trigger and the staple would set. And then we put a dial on it so you could turn that function off and it’s a regular staple gun,” he says.
The Surebonder leaders pride themselves on their scrappiness, innovation and informal approach to running the 100-employee business. “It’s not all the corporate structure and reports and this and that,” Michael says.
However, while casual governance style gave them the freedom to experiment and develop creative products, it fell short when they tried to pass the company down to the third generation. Despite their efforts to get all shareholders to agree, they’ve been tied up in a succession dispute for years.
From Distributor to Manufacturer
Eugene, Michael and Pat’s father, was an eyelet and rivet salesman for United Shoe Machinery. In 1968, he decided to go into business for himself as a distributor. He borrowed $20,000 total from two relatives and started Fastener Products Company out of his garage.
United Shoe Machinery had a consumer division that sold glue guns and glue sticks to retail outlets, but it wouldn’t sell to other businesses. When an electronics company wanted to buy some glue guns and glue sticks, Eugene agreed to sell those products. And as his company expanded, he started selling them to retailers.
After a heart attack, Eugene wasn’t able to run the company alone anymore. Michael quit college to help him, then invited Pat, who was in business for himself as a CPA, to work alongside him.
“I said, ‘Look, Pat, why don’t you come join me, and let’s take this company and really build it up together. I need your help,’” Michael says.
They soon ran into a difficulty. Big customers were bypassing them and buying right from the manufacturers. In response, they began developing glue guns in Taiwan, and they bought a factory to manufacture glue sticks locally.
The pivot to manufacturing was mainly Michael’s initiative. “I bought close to a million dollars’ worth of machinery and didn’t even tell my dad, basically. He was still around, but he was letting me run most of it, and he really didn’t even know until the machinery showed up at the door,” Michael says.
But they found that readymade solutions weren’t good enough. For one thing, they didn’t see eye-to-eye with the person who was supposed to show them how to use the equipment.
“Normally, you take a pellet, you melt it and you shape it. We don’t necessarily do that,” Pat says. “We actually use the extruder to cool the product and to shape it. So, it’s kind of the reverse of what most people use the equipment for. Therefore, the guy who was helping us — it wasn’t happening.”
Instead, they turned to family. Working with their brother-in-law, an electrician, they came up with their own methods.
“It took us almost a year before we were able to make a round glue stick in a production method where it was efficient enough to make and sell, and we had to modify the equipment. The original setup didn’t work whatsoever, so we ended up rolling up our sleeves and making equipment and having equipment made for us,” Pat says.
Unfortunately, family governance has proved to be a trickier problem to solve.
Succession Troubles
Eugene brought in a consultant to help with his estate planning in the ’80s. He divided up ownership of the company among his eight children, some of whom would work there and some of whom wouldn’t. He tried to anticipate problems that might come up. For example, he included in the bylaws that if one of his children died, their spouse would have to be made whole to keep the business within the immediate family.
But he wasn’t able to establish an active board. Instead, the family members who weren’t working at the company would check in with Pat now and then, and he would share data on sales and company performance.
They didn’t give much thought to planning for succession to the third generation. “We were always busy working and building the company. We really never sat down and said, ‘OK, what are we going to do with this thing when we’re done?’” Michael says.
That’s where things hit a snag. They were now down to six family members working in the business: Michael and his two sons, and Pat and his two sons. But some siblings thought that their own children should continue to own shares of the company in order to participate in Eugene’s legacy.
About four years ago, the family brought in consultants, who interviewed the siblings’ children. The results: The members of the third generation who weren’t directly involved in the company didn’t feel a need to hold onto ownership.
Pat says that following work with the consultants, everybody realized it would be OK to sell.
Next came the question of whom to sell it to and whether they should look for an outside buyer. With help from the consultants, they determined that selling to Michael and Pat’s four sons would allow for a fair price while minimizing disruption to customers.
Most — but not all — siblings agreed to be bought out. Negotiations with the remainder are ongoing and are a source of frustration for Michael and Pat, who are now in their mid-60s and ready to retire. “The people in the business have a different angle than the people outside the business,” Pat says.
Michael’s son Brad, who is director of sales, is optimistic that the succession issue will be resolved. “The business is healthy. We’re growing at a nice and steady pace,” he says. “The future looks bright in the sense of business, and we are confident in our leadership going forward. And we should be able to make everybody whole and continue on the family legacy.”
Always Innovating
The cornerstone of the company’s approach to product development is experimentation. One of its early successes was a dual-temperature glue gun that could alternate between high and low temperatures using a switch. A special glue had to be formulated for that.
“We basically learned by trial and error, because there was nobody to ask. So, it was a little difficult, but we figured it out. And now we formulate our own products and create our own products,” Pat says.
He points out that most people think there’s only one type of glue stick, when there are actually about 40, specialized for use with everything from electronic boards to beauty accessories. “There’s some crazy glue sticks out there that we’ve created over time,” Pat says.
The Surebonder team continues to develop different formulations, trying to optimize features like open time, or the window in which you can work with an adhesive before it will no longer bond. And they’re always looking into additional applications in industry.
They’re making a spray glue for use with foam. “People are interested in it because it’s not in an aerosol can with all the VOCs and the chemicals,” says Pat’s son Brian, who is VP of manufacturing.
They’re coming out with battery-powered glue guns, too. One can run for an hour and 15 minutes; when you’re done using it, you can put it back on its stand and recharge the battery.
As they invent new products, they work to make their operations as efficient as possible. Recent steps have included switching from DC to AC motors and installing better filtration systems.
They’re selling to big retailers now, including Walmart, Hobby Lobby, Michaels, JoAnn Fabrics, Lowes and Menards. That’s a lot of fun for Michael, who has always gravitated toward sales and relishes the challenge of landing an account. They’re also taking advantage of the ease of buying online advertising, and they’ve hired new people within the last five years to up their marketing game and create better brand awareness.
Sales have increased. “When I started here, we were probably doing not even a million pounds of glue, and last year we almost did about 8 million pounds of glue,” Brian says.
Michael is proud that through all the changes, his close-knit group of employees sticks around. “I have employees that have been here 25, 30 years,” he says. “They’ve been here a long time, and they’re all family.”
Lessons Learned
Just as the Kamins family has learned to make new and better glue guns and glue sticks, they’ve learned some tough lessons about planning for generational transitions. They want to ensure that the third generation won’t struggle with succession the way the second generation has. So, under the third generation, the bylaws will state that a sale can go through as long as a majority signs off. One hundred percent agreement won’t be necessary.
Pat reflects that more than the financial considerations involved in a sale, peace between family members is what matters. “There’s the business side of succession,” he says, “and then there’s the fallout or reality of it.”