Family business histories have so much to teach us about running a family enterprise. We can learn what works from the success stories and what doesn’t from the tales with sad endings. Many histories show us how successful families adjusted their strategies to survive over generations of change. Others help us see how geography and history shape a business. Almost always, family business histories enhance our appreciation for the hardships families working together can withstand and what they can accomplish, often under the most arduous circumstances. Below are ten favorites, listed alphabetically by the author’s name.
We singled out these books for the insights they provide and to offer a mix of industries, locales, cultures and issues. The three written by business family members each pre-sent an insider’s perspective combined with a keen sense of history and the family business’s place in it. We also included readability as one of our criteria and looked for stories that are timeless. Counting Sheep, the oldest selection, resonates today with its grasp of how family members can combine differing talents to ensure business endurance decade after decade. The two newest, McIlhenny’s Gold and The House of Mondavi, will, we think, stand the test of time and offer future generations valuable lessons in survival.
Not all the accounts are flattering, and some family members objected to being written about. Those who worked for the family firm that makes the venerable Tabasco pepper sauce, for example, were opposed to the publication of McIlhenny’s Gold. Still, family businesses can gain important knowledge from the chronicles of others’ missteps as well as the stories of great achievements.
Why read a family business history when brief news articles can provide the facts? News items are more likely to focus on the sensational aspects of a business while a history is more able to provide a complete picture, positive and negative. Peter Mondavi Jr., commenting on The House of Mondavi, told a newspaper reporter that his family’s story had already been public knowledge, “but not in the entirety and completeness of the book.” Histories also have an advantage over how-to family business books because they enable us to share more directly in the experiences of actual families and better understand how blunders are made and successes achieved.
Here are our choices:
1. The House of Gucci: A Sensational Story of Murder, Madness, Glamour, and Greed
By Sara Gay Forden (William Morrow, 2000)
With all its mayhem, Forden’s account of the famed Italian luxury goods company reads like a fast-paced thriller. Guccio Gucci founded a small leather goods business in Florence in 1921 and was joined by his three sons. The father played his sons against one another in the belief that competition would spur good performance. Instead, it fueled hostility.
Inspired by role models who were constantly at each other’s throats, the cousins in the third generation perpetuated the feud. One of them, Maurizio, gained control of the business but, facing bankruptcy, had to sell out to a non-family partner. Forden makes a case that the founder fostered the ultimate loss of the company by nurturing the rivalry among his sons.
2. Steinberg: The Breakup of a Family Empire
By Ann Gibbon and Peter Hadekel (MacMillan of Canada, 1990)
The folly of favoring less-qualified family members over talented non-family employees is a major theme here. Montreal-based Steinberg Inc. was founded as a small food store by Ida Roth Steinberg in 1917. Under her son, Sam, the predominant leader in the second generation, it grew into a powerhouse of supermarkets, real estate, restaurants and sugar refining. But Sam had a penchant for choosing less-able or inexperienced family members for key positions, and valuable non-family executives left in search of better opportunities. Disagreements among Sam’s four daughters, unprepared as owners, did the company in as a family business. It was sold in 1989.
3. Personal History
By Katharine Graham (Alfred A. Knopf, 1997)
Late in the last century, women started resisting the pressures put upon them to sell family businesses when their husbands died. A prime example is Katharine Graham. Her husband, Philip, publisher of the Washington Post, the newspaper they inherited from her father, committed suicide in 1963. Despite lack of experience and enormous fears, Graham decided to step in and run the Post herself. Her reason? To preserve the business for her children.
Open to learning from others and to surrounding herself with top-notch advisers and key employees, Graham turned herself into one of this country’s most respected CEOs. She died in 2001, but the Washington Post Company passed safely into the hands of the next generation.
4. The House of Kanoo: A Century of an Arabian Family Business
By Khalid M. Kanoo (The London Centre of Arab Studies, 1997)
Strategic change to accommodate a breathtaking sweep of history marks the tale of Y.B.A. Kanoo Group, a sixth-generation family business based in the port city of Manama, Bahrain. The author traces the modern company back to his great-great-uncle, Haji Yusuf bin Ahmed Kanoo, who took over his family’s small trading business in 1890 and began to expand into shipping and importing.
Over the next century, the enterprise named for him capitalized on the emergence of aviation, the discovery of oil in the region, massive economic and political shifts, and two world wars and became a conglomerate with interests in shipping, travel, commercial trading and insurance.
The fourth-generation chairman helped ensure Kanoo’s success with a credo that urged family members to work together for the benefit of the firm and not themselves.
5. Counting Sheep: From Open Range to Agribusiness on the Columbia Plateau
By Alexander Campbell McGregor (University of Washington Press, 1982)
Four Scotch-Canadian McGregor brothers—Archie, Peter, John and eventually Alex—arrived on the semi-arid Columbia Plateau in Washington between 1882 and 1900. Initially, they were “tramp sheepmen,” grazing their animals on unfenced land. Written by a descendant, Counting Sheep details a century of challenges that the McGregors had to deal with, including the disappearance of the open range. The brothers adapted their McGregor Land and Livestock Company to change, diversifying into cattle, wheat, retailing and, eventually, into agricultural chemicals. A key to their staying power was the “ability to avoid personal disputes that could dissolve their business partnership.” Still, a rift between Archie and Peter caused Archie to leave the business, but the company survived.
When sheep were no longer profitable, the family got out of its original business and moved on. But the memories linger via this meticulously researched account.
6. Living the Dream: The Story of Victor Smorgon
By Rod Myer (New Holland Publishers, 2000)
In this biography of a second-generation leader, we find a family that ended the ownership of its business amicably. Founded in Melbourne, Australia, by Jewish immigrants, Smorgon Consolidated Industries (SCI) grew into a conglomerate engaged in such enterprises as meat butchering, paper production and steel.
Deeply valuing family unity, the Smorgons took steps to be sure family members working in the company talked openly and freely and that young people were listened to as well as the elders. As a result, when it became the third generation’s task to determine the future of the company, they had the communication skills and mutual respect to do so peacefully. They sold SCI in 1995, retaining only the steel business and taking it public as a family four years later.
7. McIlhenny’s Gold: How a Louisiana Family Built the Tabasco Empire
By Jeffrey Rothfeder (Collins, 2007)
His banking career destroyed in the Civil War, Edmund McIlhenny sought a way back to financial success. In 1868, on his in-laws’ war-devastated sugar plantation on an isolated Louisiana island, McIlhenny created the recipe for Tabasco pepper sauce.
Now led by the fourth generation, the virtually one-product McIlhenny Company faces an uncertain future. Describing its triumphs and mistakes over 140 years, Jeffrey Rothfeder offers a litany of issues that all business-owning families face: What strategies shall we pursue? What are our values? Who can best lead us? How can we support—and retain the loyalty of—an ever-larger, more distant family? (The company now has nearly 200 family shareholders and $250 million in annual revenue.)
Rothfeder sees a business in decline as a result of resistance to change, dependence on family members unsuited for leadership, and insistence on tradition. The McIlhenny Company is, he says, “handcuffed by its history.” But, he warns, “no one yet has gotten wealthy betting against the McIlhennys. They are a stunningly resilient family.”
8. American Empress: The Life and Times of Marjorie Merriweather Post
By Nancy Rubin (Villard Books, 1995)
The world remembers Marjorie Merriweather Post as “an heiress,” but Rubin shows us that she was much more than that. Her father, C.W. Post, killed himself in 1914 and left his Battle Creek, Mich. enterprise, the Postum Cereal Company, to his only child, Marjorie, then 27.
Women in Marjorie’s time were not expected to run a business. But with grace and brilliance, she did so covertly through uncles and husbands..
Postum Cereal might have lasted as a family business into the third generation and beyond had Marjorie broken the bonds of tradition and run it directly herself. Her second husband, E.F. Hutton, the renowned stockbroker, became chairman. Under his leadership and with her collaboration, the company went public. We know it today as General Foods Corporation.
In her era, Marjorie Post was the Ginger Rogers of the business world, doing everything Fred Astaire did but backward and in high heels.
9. The House of Mondavi: The Rise and Fall of an American Wine Dynasty
By Julia Flynn Siler (Gotham Books, 2007)
Robert Mondavi, the visionary who transformed wine making in California’s Napa Valley and influenced what America drinks, is the core of this three-generation saga. During World War II, he persuaded his Italian immigrant father, Cesare, already a winemaker, to purchase the Charles Krug winery. A family partnership, C. Mondavi and Sons, was formed as a holding company, and Robert’s brother, Peter, joined in to help run Krug. But the brothers failed to get along and after Cesare’s death, the family ousted the brilliant but difficult Robert, leaving Peter in charge.
In 1966, Robert launched the Robert Mondavi Winery, aimed at creating wines fine enough to compete with those of France. Mondavi achieved world fame and became a family-controlled public company, but Robert’s sons, Michael and Timothy, like their forebears, could not get along. When the company faltered badly, the outsiders on the board wrested control from the disunited family, selling the business in 2004 for $1.35 billion.
The family shareholders realized around $336 million from the sale, but it’s clear that all the money in the world could not heal the sense of loss and betrayal they felt.
10. The Trust: The Private and Powerful Family Behind The New York Times
By Susan E. Tifft and Alex S. Jones (Little, Brown and Company, 1999)
This may be the best guidebook we have for how to run a family business. The authors follow The New York Times Company from the purchase of its now-legendary newspaper by Adolph S. Ochs in 1896 to its leadership a century later under the fourth generation.
Two personalities stand out as the most responsible for the company’s longevity in one family: Iphigene Ochs Sulzberger, whose husband ran the company in the second generation, and their son, Arthur Ochs “Punch” Sulzberger. Iphigene instilled an attitude of “one for all and all for one” in her children and grandchildren. Punch, an extraordinary third-generation company leader, demonstrated a talent for communicating with family members.
The Ochs-Sulzbergers have had their share of discontent, disappointment and tragedy. But the examples set by Iphigene and Punch have enabled family members to put the business ahead of personal interests, not just for the family but also for the public it serves. Will the family be able to maintain its unity in the face of declining ad revenue and challenges to its leadership by dissident non-family shareholders? Only time will tell, and that’s another book.
Taken together, these books provide several revelations. One is that despite the Katharine Grahams of the world, many family businesses still do not prepare one of their most valuable human resources—their female relatives—for leadership and ownership.
Another is that the development of family business as a field of study is beginning to take hold among the chroniclers. Written 27 years ago, Counting Sheep makes no reference to the field. The later books, however, begin to reflect the authors’ knowledge of the field and to describe some of their subject families as making use of family business consultants and other resources.
Most important, these ten histories emphasize the critical factor of unity in the family. Without it, a business sooner or later will almost certainly be lost to the family, and no one will ever be as passionate about it again.
Sharon Nelton, a journalist in West Chester, Pa., has been writing about family business issues for more than 25 years.