Drawing lessons from the past, family businesses look boldly to the future
BY DOROTHY WHITCOMB
Family businesses fuel the economy of the United States. They produce 60% of its gross domestic product and account for fully 40% of all Fortune 500 companies.
Historically, these businesses also have been the engine that drove the bedding industry. Although consolidation and contraction have altered the industry’s landscape over the last decade, family businesses—and those executives who are born into them—remain forces with which to be reckoned.
As the International Sleep Products Association prepares to celebrate its 100th anniversary in 2015, BedTimes launches a series of articles that examine what it means to be “Born into bedding.”
We start with 10 multigenerational bedding industry families whose histories parallel that of the industry itself. Some are small and owned entirely by family members; others grew to become large, publicly traded entities. Some manufacture mattresses and related products, others are factory directs, and still others are suppliers to the industry as a whole.
For all of their differences, BedTimes found that people who are born into bedding have a great deal in common. They tend to have strong ties to the industry as a whole, and often volunteer their time and talents to industry organizations.
Those who are born into bedding tend to be frank about the lessons they’ve learned from their family’s history. And although they draw lessons from the past, they look to the future, unafraid of change.
Although they come from different segments of the industry and from different kinds of families, the business leaders spotlighted in this inaugural “Born into bedding” feature are unanimous about two things: The pace of technology-driven change and the continuing effects of consolidation are their two biggest challenges.
Comfort Sleep Systems: ‘Diamond in the rough’ now shines
A Branford, Connecticut-based factory direct, Comfort Sleep Systems has served the greater New Haven area since 1939. The company was founded as Comfort Bedding Co. by Leon Bombalicki, a Polish immigrant who came to the United States at age 14 and found work in one of New Haven’s many mattress factories. Today, it’s owned and managed by the father-daughter team of his grandson, David Bombalicki, and great-granddaughter, Sara Bombalicki Vallario.
Both Bombalicki and Vallario came to the family business after working in other industries. Bombalicki worked in construction until the death of his uncle, Eugene Bombalicki, who had run the business since the early 1950s. His uncle’s death caused him to reassess his own life and to cast his lot with the family business.
When David Bombalicki took the helm of Comfort Sleep Systems in 1985, he found a company in serious decline. “The business had been neglected and was at rock bottom,” he says. “We had to rehab the building and upgrade to all new machinery. It was definitely a diamond in the rough.”
David and his sister, Joan Bombalicki, who recently retired, rebuilt the business by capitalizing on its strengths. The strong following it had among existing customers, who valued the product’s consistent quality, would be key to their survival, they believed.
The pair also felt there was a competitive advantage in continuing to run the business as a small factory direct. “The industry has really changed,” David Bombalicki says. “The only way to compete with the big guys is to eliminate the middleman. Unless we grew it really big or kept it on the small side, we were going to get squashed. The people in the middle are not around anymore.”
Today, Comfort Sleep posts about $1 million in annual sales and is setting the stage for additional controlled growth. And that, her father says, is where Sara Vallario comes in.
Now 27, Vallario spent six years in business-to-business sales before joining Comfort Sleep in January of this year. Growing up, she spent summers learning how to manufacture box springs and to sew mattress covers, but she wanted some time to prove herself before joining the family business.
Vallario, who firmly believes that “the Internet is the way to go,” has updated the company’s website, created a social-media platform and encouraged customers to go to blogs to write reviews. All of this, and the fact that “we haven’t received a single negative review,” she says, have allowed the company to expand its reach beyond the Connecticut/New York City region it had been serving.
Vallario also worked with her father to upgrade manufacturing again and to remodel the Comfort Sleep showroom. “The environment you sell in matters, and we now have a great-looking showroom,” she says.
The effort is paying off. “Since Sara’s been here, sales are up by 25%,” her father says proudly.
Father and daughter acknowledge they are both driven, hardworking people who occasionally butt heads. It doesn’t seem to matter.
“When you’re working with your parent and have a rough day, he has to love you anyway at the end of it,” Vallario says.
Culp Inc.: Global company preserves family’s deep-rooted culture
Founded in 1972 by Robert G. “Bullet” Culp Jr., Culp Inc. was originally a regional, family-owned converter and distributor of upholstery fabrics. Today, the High Point, North Carolina-based company is a publicly traded, global enterprise that, in fiscal 2014, posted total sales of $287.2 million, $160.7 million of which came from sales to the bedding industry.
The history and dynamics that shaped Culp Inc. are a story best told by Bullet’s son Rob, the company’s current chairman.
“Our heritage has always been in the mattress industry,” he says. “My grandfather was the controller at Sealy Pittsburgh, and, before founding Culp Inc., my dad sold ticking for Golding Brothers in Chicago. He was so creative that they transferred him to High Point to open an upholstery converter.”
When Golding sold the company, Bullet Culp, who earned his nickname because he was entrepreneurial and his mind was as sharp as a bullet, decided to go out on his own. He was 55 years old.
One of his first calls was to his son Rob, who at 22 had just begun working for Arthur Andersen Consulting. “I joined my father because I had nothing to lose,” Rob Culp says. “I was much more like him than I had thought. I was fortunate to learn from him.”
The company grew rapidly, and to finance the acquisitions that spurred even more growth, it went public in 1983. Culp Inc.’s sales peaked in the 1990s at $483 million.
The 1990s also saw the beginning of the exodus of textile manufacturing to China, the first of two economic upheavals that threatened the company’s existence. This century’s worldwide recession dealt another blow to the company, but this time, Iv Culp, president of Culp Home Fashions and Rob’s son, has played a pivotal role in maintaining its stability.
Unlike many who grew up alongside their family’s business, Iv Culp never worked in the factory and wasn’t even sure he would be interested in textiles. “Coming into the company was not a birthright, and when I did, I wanted to earn it. The last thing that I ever wanted to be seen as was the boss’ son.”
To test his interest, he went to work for Unifi, a Greensboro, North Carolina-based manufacturer of synthetic yarns, and studied textiles and business via dual master’s degrees. The pull of heritage and his pride in his family’s vision and tenacity were so strong, however, that in 1998, he decided to extend that heritage into a fourth generation.
It’s unlikely that his grandfather would have been surprised, chalking up his decision to being “Culpmatized,” a word Bullet Culp coined to describe the absorption of the company’s culture. Rob Culp says: “It’s about treating everyone honestly and with respect and dignity. He used to say that it was OK to go home tired every day, but that no one should go home tired and broke.”
Culpmatized turns out to be an exportable condition. “You hear horror stories about manufacturing in China, but we don’t have problems there or at any of our international locations. Our operation is 100% owned by us and 100% run by the Chinese, and they are exactly like us.”
That bodes well for the challenges Iv Culp sees for the future. “When you perform as a public company, the pressure ramps up for every future quarter to beat the last,” he says. “And if you’re in a high-fashion business, you’re not going to win every day without constant attention to detail, combined with terrific products and service.”
Perhaps speaking from experience, Rob Culp adds: “Iv’s biggest burden is the threat of failure. Whether we like it or not, our name is on the front door, and don’t think for a minute that we don’t take that personally. Whether it’s publicly traded or not, this is a family business.”
Gold Bond Mattress: A company defined by passion, hard work, loyalty—and reinvention
Skip Naboicheck, vice president of Gold Bond Mattress, is the fourth generation of his family to produce bedding in Hartford, Connecticut. It is a mantle that he’s donned the Naboicheck way—passionately, and at full tilt.
Like many children in family-owned companies, he “grew up” in the business and remembers the day he that knew Gold Bond was in his blood.
“It all hit home for me at 16 when I started working at the company loading trucks,” he says. “It was exhausting, but when I saw all the tradition, passion and hard work, it drew me in.”
His father, Bob Naboicheck, has been president of the company since 1997. His path was less direct, however. “Back then there were a lot of relatives in the business and my dad wanted me to do something else first,” he says.
It was a savvy move. The “something else” included four trips to Cleveland, Ohio, to work with Leon Danco at the Center for Family Business. What Bob learned from Danco helped save Gold Bond when family friction threatened to tear it apart.
“There was a lot of jealousy among the family members,” he says. “When I came in, I was able to help my dad stay focused while reaching out to the family.”
Bob Naboicheck is convinced that buying out other family members saved the business and set it on a course for growth. It was the first of many Gold Bond reinventions that he has presided over.
“There’s never a time when we’re not thinking about change,” he says.
The explosion of franchising, consolidations at all levels of the bedding and furniture industries, and innovations in mattress construction have all tested his mettle. He’s met each challenge with the passion, flexibility, commitment to quality and loyalty that have always shaped Gold Bond’s core values.
Loyalty has been a particularly strong force in the company’s history. “Our longevity and history definitely helps and gives us entry anywhere,” Bob Naboicheck says. “We have tremendous relationships with our suppliers, employees and retailers.”
Skip Naboicheck sees it as his mission to build upon those relationships, while reinventing the company once again. A strong interest in design has put him at the center of “reinventing the construction and look of our conventional and specialty products,” he says. He also has taken a central role in expanding the company’s sales territory, which currently stretches from the Northeast down to Florida, as well as into Ohio and Illinois. He refuses to let the lack of a national advertising budget stand in his way and has gone back to his beginnings with the company—loading and unloading trucks—to get the job done.
“We bring our product directly to store owners,” he says. “We can show them everything we have to offer, and they can touch and feel the new beds before placing an order.”
But that’s just the Naboicheck way. “When I was growing up, there was no divide between work and family,” Bob Naboicheck says. “It was a very hands-on family and that hasn’t changed.”
Neither has the energy that both generations bring to the business. “My father and I are always passionately discussing things,” Skip Naboicheck says. “We’re passionate people with strong opinions who want what’s best for the company.”
HSM Solutions: Corporate values mirror Bush family values
Bedding chose me,” says Jimmy Bush, senior vice president for corporate development at HSM. Bush has been with the Hickory, North Carolina-based supplier—more or less—since he was 9 years old. He drew his first paycheck at 13 and signed on full time in 1979.
Since his brother, Bobby Bush, now senior vice president of foam technology, already was involved on that side of the business, Jimmy Bush drew the bedding slot. “And that,” he laughs, “is how bedding chose me.”
Much has changed since 1944, when Parks Underdown founded the Hickory Springs Manufacturing Co. and set out with his cousin, the Bush brothers’ father, Bob Bush Sr., to sell small metal products to the bedding and home furnishings industries. Other things, however, have stayed very much the same.
Today, as then, the company is wholly owned by members of the Underdown, Bush and Simmons (no relation to Simmons Bedding Co.) families, all of whom are related and many of whom continue to work in the business. And, today as then, a core set of values guides all aspects of the way the families do business.
Jimmy Bush says: “I don’t know which came first, family values or corporate values, but they are one-and-the-same: high integrity, compliance with all regulations and being fiscally conservative. There’s no question about how to do things; the argument becomes what to do.”
It’s an ongoing argument meant to move the business toward continuing relevance and profitability. The company has redrawn its business plan several times in the last 70 years, most recently in 2013 when it changed its name to HSM Solutions to underscore the fact that it had shifted its focus from components to providing market-based integrated solutions and components to a variety of industries.
The shift was led by the third generation in response to market forces unleashed, Jimmy Bush says, “by the offshoring of furniture and bedding manufacturing and consolidation at all levels in the bedding industry.
“We aligned our business units to each market directly and become leaner and meaner,” he says.
Running the company as if it were a public corporation has always been a priority. “We try to differentiate family from ownership from management,” Jimmy Bush says. “There are six of us who work full time with the company and five who do not. Some of us fill all three buckets, and some just one or two.”
The third generation of family leadership instituted a “Family Council” to make sure those roles did not get muddled. “We get together to discuss family issues and family business issues,” he explains. “We see if we can settle them outside of the business and, if not, the council will take ideas or issues to the board.”
Three members of the fourth generation now work at HSM, a fact that focuses everyone’s attention on succession planning. “It’s very important to the third generation to maintain ownership of the company,” Jimmy Bush says. “That way it continues to go in the direction we want it to and to provide income to the family.
Leggett & Platt: Glassman family plays a starring role
As president and chief operating officer of Leggett & Platt Inc., the Carthage, Missouri-based components supplier, Karl Glassman is responsible for the health and well-being of all of the company’s business units. One, however, holds a special place in his heart.
“The bedding industry is really an extension of my family, and I feel a more personal connection to it than to any other industry that Leggett is involved with,” he says.
Glassman’s connection to the industry started in 1976 when he first went to work for De Lamar Bed Spring, the Los Angeles-based spring mill that his grandparents founded in 1929. “I graduated from high school and my dad said: ‘Congratulations. Your shift starts at 5:30 tomorrow morning.’ ”
He continued working there while attending college, until 1979, when Leggett & Platt acquired the company’s assets. “I think the most important part of my education took place on that factory floor,” he says. “The three years I spent at De Lamar are why I’m here today.”
Although his father and mentor, Arthur Glassman, joined Leggett after the buyout, Karl decided to pursue a career in finance, ultimately joining Leggett in 1982 as a sales trainee.
“I really saw Leggett as a short-term opportunity to gain another skill set,” he says. “I thought it was just a job and I’d be able to work around my dad again for a while.”
“A while” turned into 32 years, during which he progressed steadily through the ranks, while always looking for ways to be of service to the bedding industry. Glassman has served on the International Sleep Products Association’s board of trustees and executive committee, as well as its Suppliers Council.
In 2012, ISPA recognized his commitment by presenting Glassman with the Russ Abolt Award for Exceptional Service. “I saw it as an award for my entire family, and it was one of the highlights of my life,” he says.
The future of the bedding industry is never far from Glassman’s mind. “The challenges always come down to consumer relevance,” he says. “What people do in bed creates the relevance. The conversation we have to have centers on sleep and the quality of life.”
The rapid growth of the adjustable bed market underscores his point. “Adjustable bed components are the fastest-growing part of Leggett’s business,” he says.
Glassman sees consolidation at all levels of the bedding industry as a continuing, but manageable, challenge. “The world is about consolidation,” he says. “It’s almost a waste of time and breath to complain about it. The question is: What are we going to do about it?”
You only have to look around, he suggests, to find models of families in the bedding industry who have met these challenges head-on and prospered. “Wright is a wonderful testimony to this kind of metamorphosis,” Glassman says. “The changes they’ve gone through in one generation are astonishing. Culp was almost squashed. They weren’t beaten like other U.S. companies, because they went to Asia and Turkey. More recently, they have increased their investment in U.S. manufacturing. This should give us all hope.”
McRoskey Mattress Co.: President adopts ‘if-it-ain’t-broke’ philosophy
I was conceived on a McRoskey mattress and wandered into the business 40 years later,” Robin McRoskey Azevedo says.
If Azevedo, now president and sole owner of McRoskey Mattress Co., didn’t feel the pull of her family’s business in her blood until well into adulthood, she most assuredly does now.
Azevedo worked in the insurance industry until “retiring into motherhood at 36,” she says. Ready to go back to work, she turned to McRoskey when she realized that “no one was going to hire me for two afternoons a week.”
Once in, she was all in. Azevedo learned everything that her father and uncle, Edward and Leonard McRoskey, could teach her. It was their pride in the product and sense of responsibility to their customers, she says, that prompted her commitment to extend the family business legacy into a third generation.
Now 115 years old, the San Francisco-based company has operated as a factory direct since the 1920s. It was founded by the original Edward and Leonard McRoskey, two brothers who set out for California to sell mattress-making equipment in the late 1890s.
The pair produced and occasionally retailed their own mattresses until 1920, when they became competitors. At that point, Edward McRoskey, Azevedo’s grandfather, set up shop as a factory direct, and the business has operated in that way ever since.
All McRoskey mattresses are handmade to order at the company’s San Francisco factory. The high-end bed sets are retailed in two showrooms, one in a San Francisco building that the company has occupied for 90 years, and another in Palo Alto, California, that opened in 2001.
Azevedo has adopted an “if it ain’t broke, don’t fix it” attitude toward the way her company manufactures its beds and cares for its family of customers, a significant number of whom have been buying from McRoskey for two and three generations.
“We keep making beds as we do because they are well-made and don’t need to be reengineered all of the time,” she says. “Our challenge is finding the right materials. Our ticking has to withstand a full tuft, and since most of the industry isn’t doing that anymore, most suppliers don’t make the weight and weave we require.”
To meet the challenge, Azevedo says that she scours industry trade shows and markets “for vendors who think we’re charming enough to care about.”
Azevedo says the focus in the McRoskey family has always been on building the business rather than enriching family members. She maintains that focus, but “not by working eight days a week like my father and uncle did,” she says.
Instead, she built a team to help her manage the business. That team includes fourth- and fifth-generation McRoskeys: her son Robert Azevedo, who heads customer service, and her grandson, Ed Rahmer, a senior engineer.
As Azevedo looks to the future, she has one overriding goal: She wants to ensure that the “ongoing legacies of concern for the product and concern for the customer continue” she says.
“If the family stays involved, that’s fine, but it’s not the overriding goal. It may have backstory appeal, but it doesn’t get the mattresses made.”
Shifman Mattress Co.: Father-son team aligns personal values with product
There’s a bit of a dispute in the Hammer family about whether Shifman Mattress Co. is a second- or fifth-generation family business. Chief Executive Officer Mike Hammer, who bought the business in 1986 from Robert and Burton Shifman, grandsons of the original founders, insists that it’s second. His son, Bill Hammer, company president, is not so sure.
“Sometimes I consider myself the fifth generation of a tradition that my father took over,” he says. “I don’t look at it as if the third generation of Shifmans failed, but that they maintained the quality of their product and gave my father an incredible opportunity when he walked in there.”
Mike Hammer didn’t intend to buy the Newark, New Jersey-based company when he approached the Shifmans about running it for them. He simply was looking for a way to align his own values with a product he could believe in. At that point, Hammer had been in the bedding industry for 22 years and was unhappy with the direction he felt it was taking.
“The focus had become profit per share, gross margin and stock prices,” he says. “You wound up with products that lacked quality.”
First generation or fourth, Mike Hammer’s challenges were the same: to bring a moribund company back to life and do it quickly. Shifman once again became a family business when Hammer’s wife Eileen and his two oldest sons stepped into the breach and ran the business for five years so that he could go on the road to sell.
Today, Bill Hammer’s challenges are qualitatively different. He and his father have built a customer base that includes 55 high-end furniture stores and all 24 Bloomingdales stores that have bedding departments.
The expanded base boosted sales considerably. “Our total annual sales increased by 58% from 2008, when I became president, to 2013,” Hammer says. “And that makes me very proud.”
But, he says, “To build the company over the long term, I really feel that we need to branch out across the entire country.”
Bill Hammer’s goal of turning Shifman into a national brand is a challenge within a challenge. He explains: “The product speaks for itself. Our biggest challenge is that many companies are using the same words as us—handmade, natural, quality—to describe their product. Even mass producers use it. We have to find ways to cut through the clutter.
“Most of our money goes to manufacturing the product and what’s left over is a very small marketing budget,” he adds. “One hundred-fifteen years of manufacturing excellence is not something that I’m willing to cut corners on.”
That’s a value he learned from his father and hopes to pass on to the next generation. “It’s very important to keep this business in Hammer family ownership,” he says. “I don’t think that anyone outside the family would maintain our high standards, and that would mean that the company would lose its viability.”
And that makes Mike Hammer very proud. “I’ve always marched to a different drummer, but I’ve surrounded myself with people who understood my philosophy and believed in it,” he says. “What I dreamed about a long time ago has come true.”
Springs Creative Products Group: Close keeps family tradition alive in global marketplace
Although Derick Close always has his eyes firmly fixed on the future, he grounds his vision in his family’s long history in the textile industry. Close represents the fourth generation in a line that started in 1887 with his great-grandfather Leroy Springs and his Fort Mill, South Carolina, cotton mill. Although the name changed from Springs Mills to Springs Industries, and finally to Springs Global as it grew, the Close family ran the company until it was sold to Coteminas, a Brazilian company, in 2007.
“The business was the central theme of the town we grew up in,” Close says. “Most everyone had some affiliation with Springs. The town was part of the family, and the family was part of the town.”
Close watched as the off-shoring of the textile industry in the late 1970s and early 1980s drove many textile mills out of business. “As the mills started to close, it shook the foundations that these towns were built upon,” he says.
The upheaval also affected him. “I wanted to be part of the industry that I grew up around,” he says. “I saw its changing nature and thought I could contribute.”
Close joined Springs Global in 1982 and was president of the Retail and Specialty Fabrics division when his family sold its interest in the company. He bought the division, renamed it Springs Creative, and set out, he says, to create “a 21st century textile company.”
“If a textile company is to succeed in the 21st century, it has to be done differently,” he says. “Every day is a challenge, but we have a lot of tools in this new environment.”
One of the biggest challenges Close faces is that change seems to be the only constant in a global marketplace. To deal with this ever-changing and frequently chaotic market, he has positioned Springs Creative as “an idea company” that uses creativity, innovation and flexibility as the tools of its trade.
The company’s mission is to bring new products to market that meet or anticipate customer needs, Close says. That mission is summed up in the company’s tagline, “What’s Next. Now.”
The “What’s Next. Now.” philosophy also extends to the way Springs Creative produces product. Initially, the company did not own or operate its own manufacturing facilities. A changing business landscape has caused Close to reconsider that position.
“You have to be flexible, fast and unafraid of change,” he says. “U.S.-based manufacturing assets would have diminished our flexibility earlier, but we see new opportunities for investments in quick-response manufacturing activities like digital printing.”
Looking to the future does not mean dismissing the past. “We’re surrounded by a 450,000-piece textile archive from the last 150 years that reminds us every day of the investment and hard work that went into building this business,” Close says. “We’re also acquiring and using three facilities that came out of old Springs Mills footprints. We’re using them differently, but we endeavor to take advantage of that history every day.”
Wolf Corp.: Fourth-generation company changes with the times
Tony Wolf has a lot to live up to, and he knows it. His company, Wolf Corp., has faced some of the most daunting challenges that 141 years of American social and economic history could throw at it—and survived. Now it’s up to him to face what the 21st century has in store, and do it with three generations of ghosts looking over his shoulder.
“Some days, I’m trying to live up to my parents and great-grandparents, and some days I’m circling the wagons, trying not to get scalped,” he says.
Wolf Corp., a Fort Wayne, Indiana-based mattress manufacturer and fiber processor, has its roots in an upholstery business that Tony Wolf’s great-grandfather, Paul Wolf, started when he immigrated to the U.S. from Germany.
“Each generation has had its own challenges,” he says. “My great-grandfather had 13 mouths to feed, my grandfather had to get through the Great Depression, and my father and uncle, post-World War II rationing and allocation, and mattress industry marketing wars.”
How did the company survive? “It’s the American spirit—ingenuity, determination and reinvention,” Wolf says. “That’s what it takes to survive.”
He adds: “The big lesson I learned from my family is that you have to reinvent yourself over and over again. If something doesn’t work, you try something else.”
Wolf joined the company in 1976 and became president and CEO in 1999. His tenure has seen its own share of challenges and reinventions.
The company moved into waterbeds in the 1970s and ’80s during what he likes to call “The Sealy Wars,” when Sealy of Ohio and Sealy Inc. battled over sales territory and undercut prices in the process.
“It was a really good gig until it was safe to go back into traditional mattresses again,” he says.
The company has continued to change with the times. “We have a cotton business here, so we rode the futon wave for a while and still do all of Serta’s futons,” Wolf says.
“I’m waiting for the next big wave,” he adds. “I try not to keep my feet in one market for too long, because it’s harder to hit a moving target.”
Predicting what the next wave will be may be the biggest challenge of all. When Wolf compares himself to the family ghosts, it’s the pace at which change is occurring that sets his challenges apart from theirs.
“Change comes faster and faster, and our ability to keep up with it is tougher and tougher,” he says. “Technology changes so quickly that decisions have to be made without all of the information.”
His company’s long history, however, may provide important advantages, even in a rapidly changing world. “Our historical status helps cut through the clutter, quickly and hopefully correctly,” Wolf explains. “You know the jungle better than someone who hasn’t been in it as long, and can weed out the good guys from the bad guys.”
Whatever the future holds, Wolf seems ready to meet it head on. “I can’t wait to see what tomorrow brings,” he says. “It may not be what I like and it might be hard, but it’s going to be fun and it’s going to be exciting.”
Wright Global Graphic Solutions: Innovative brothers chart course for growth, stability
The Wright brothers, Don, Greg and Ron, have a visceral understanding of being born into a business. For them, it has little to do with heritage, however, and everything to do with passion.
Don Wright, the senior vice president and chairman of the label and point-of-purchase materials provider, says: “If it’s only a job, you won’t last long, because it’s too difficult and demanding. It’s part of our fiber; it’s what we do.”
“It’s a livelihood, a creative effort, a calling,” adds Greg Wright, president and chief executive officer. “It’s something you do because it’s in you.”
Although Don Wright came into the business straight from college, Greg Wright was 38 before he signed on. The company’s founders, their father Bill and uncle Tom Wright, had “made it clear that we needed to find our own way,” Greg Wright says.
His way led to a successful career in the hospitality industry. Things changed when his father died in 2002, and Ron Wright, senior vice president of international sales and operations, asked Greg to consider coming into the business.
The request triggered a process of reassessing the company’s structure that the brothers believe charted a course for growth and stability. “If you get a lot of family members in one building, it can become very dysfunctional,” Greg Wright says. “We had to define our roles.”
Don Wright adds: “We had to evaluate who did what best. The key to being in a family business is communicating and being honest with each other.”
The brothers credit an outside board of directors with helping them to separate family from business. “They challenge us, go over every inch of the business from a financial standpoint, and determine salaries,” Don Wright says.
The board endorsed the diversification strategy that transformed the 53-year-old, Thomasville, North Carolina-based company from a regional supplier of printed materials to the mattress and home furnishings industry into a global source of integrated graphic solutions that now serves the beverage, apparel and action-sport industries, as well.
“The consolidation of the mattress industry is one reason why we diversified,” Don Wright says. “It’s had a ripple effect that’s created a very different dynamic.”
The brothers believe that the future viability of their company will come through continuing to embrace change. “Our growth will come through innovation and by continuing to expand into market areas like central Asia and Europe,” Greg Wright says.
The strategy has worked thus far. The brothers report that overall corporate sales growth has averaged 7.2% each year for the last five years, and that, in the last two years, both sales in China and wide-format printing sales have doubled.
The path is less clear when it comes to the question of a third generation of family leadership. Greg Wright says: “We are now faced with the challenge and dilemma that Bill and Tom faced 30 years ago. We won’t make our children feel guilty if they don’t want to come into the business. The perpetuation of the business is the most important thing. Family ownership and management is secondary to that.”
“There is no endgame, no sellout date, no succession plan,” Don Wright adds. “We all love what we do, and as long as we love it and are successful at it, we’re going to keep going.”
How to avoid the pitfalls of a family business
Don Schwerzler, founder of the Atlanta-based Family Business Institute, offers these tips for avoiding common problems in a family business:
1 Create an advisory board. “I serve on many family business advisory boards where I am the only outsider on the board,” Schwerzler says. “In other words, an advisory board doesn’t need to be large to be effective. If there were only one piece of advice I could offer to a family business, creating an advisory board would be it. An advisory board is a great safety net for both the business and the family—especially if a catastrophic event occurs such as the unexpected death of the business owner.”
2 Pay attention to the “dualism dynamic.” As the management style of the business becomes more professional, the communication system for the family also should become more formalized.
3 Make sure management learns how to become more “planful.” The lack of planning is a major contributor to why only about 30% of family businesses successfully transition to the second generation.
4 Utilize the “Nexters.” The “Nexters”—the next generation of owners/managers—often are not engaged in a way in which their education and energy can benefit the business quickly. Too often the Nexters are an underutilized resource.
5 Rethink succession planning. “Succession planning for a family business is generally described in terms of ‘transition,’ ” Schwerzler says. “I think it is crucial for the family business to think of succession as a time of ‘transformation’ for the business. It is a great time to review all of the policies and practices of how the business is managed and operated.”