Monday, August 29, 2016

"A Century Club Company That Operates Like a Tech Start-Up"

Century Club company Independent Stave is a great example of longevity factor #2: unique core strengths combined with change management. Based in Lebanon, Missouri, Independent Stave is the world's largest barrel manufacturer for wine, whiskey, and beer - an industry that relies on barrels for aging their product.

Founded in 1912 by T.W. Boswell, Independent Stave is now run by fourth-generation Boswell siblings. When the company began, it just produced staves - the slats that make up a barrel. It wasn't until 1951 that it opened its own cooperage, aimed at the expanding US whiskey industry. Rather than simply "setting the barrels on fire" to age them (the norm for US barrel manufacturers), the Boswell then in charge began the company's efforts to update the low-tech process with various engineered quality-control systems and dived deep into the science of wood aging. The result is what the New York Times called "a company that makes an age-old product but operates like a tech start-up." (See the NYT August 28, 2016 for the full article on Independent Stave.)

As with most Century Club companies, Independent Stave would not have survived for over 100 years without building on their unique core strengths, making improvements that keep them ahead of the competition. For more information about this competency (factor #2 in my longevity model) as well as the other four longevity factors, read "Lessons from Century Club Companies: Managing for Long-Term Success."

Wednesday, August 24, 2016

Survival? Sustainability? Stewardship? What word best describes "long-term business success?"

When writing my book on common practices of companies over 100 years old, I struggled with what term to use to describe them. With the help of my editor, Clark Malcolm, I landed on Century Club Companies, which certainly sounds better than "old companies," and referred to their longevity practices as "managing for long-term success." When presenting papers on my research at academic conferences I often call these "survival factors," which somehow seems to downplay the fact that these companies have done much more than merely survive: though most have gone through periods of barely surviving, most actually thrive or they wouldn't have lasted for over 100 years. Early on I liked to talk about the sustainability of these companies, but that term has become identified almost exclusively with the environmental movement. (At the last conference where I presented a paper, one of the discussants actually thanked me for using the term "survival" instead of "sustainable.") Use of the term sustainable business practices becomes even more confusing because one of the five factors in my longevity model is that of deep relationships these companies have with their community --including being at the forefront of many environmental sustainability practices. 

When talking about the leadership approach used by people running Century Club Companies another term that comes into play is "stewardship," because these leaders tend to see themselves as caretakers of their companies. The role of leader comes with a sort of obligation to make decisions that will ensure the continuity of the firm rather than those that would make a big splash or fulfill the leader's personal ambitions or need for recognition. But I have been told that the term stewardship comes with either religious or servant-like overtones that some find off-putting. (Also I need to say that many Century Club leaders readily describe themselves as either stewards or servants of the company.)

What do you think? When talking about practices leaders can use to keep their companies in business for the long term, what term makes the most sense? 

Monday, August 15, 2016

Many Century Club Companies Keep Things in the Family

According to Family Business Review only 12% of family businesses survive to the third generation and just 3% operate into the 4th generation and beyond. 

However, when looking at Century Club Companies we see a far different story. There are 728 companies in my data base of U.S. companies over 100 years old. Of these, 85 (11.7 percent) are in their 5th generation of family ownership; 41 (5.6 percent) have made it to the 6th generation; and another 15 companies (2 percent) are in the 7th generation and beyond.  These companies are truly treasures - for their families, their employees, their customers, their business partners, and their communities. To read what it takes to survive - and thrive - through the generations, see Lessons From Century Club Companies: Managing for Long-Term Success.

Saturday, August 6, 2016

"Lessons From Old Companies" - A Book Review

My neighbor recently gave me a great book. He knew Stried Painting just celebrated 32 years in business and thought I might like to read about what it takes to keep a business thriving for 100 years or more. Now, that's a challenge!  The book, Lessons from Century Club Companies: Managing for Long Term Success, written by Vicki TenHaken, is a gem. She covers five key factors that these companies have in common. Long term relationships with employees, and long term relationships with business partners are two of the five factors. These two resonated with me, since Stried Painting is fortunate to have employees who have been with us for 20 years. We've also enjoyed a 20+ year relationship with more than a few customers. How does this happen? TenHaken says that the Century Club companies tend to be frugal, and they know how and where their money is being spent. This allows them to weather the bad times, and gives them the ability to keep staff in place when the going gets rough. Century Club companies also take a lot of effort in training their employees, giving them the skills needed to do their jobs effectively. 
Century Club companies understand in their bones the value of long term customer relationships and vendor relationships as well. In an environment of intense competition I found it refreshing to read how much they value business partnerships. TenHaken states, "Since Century Club companies believe they cannot maintain success without the cooperation of others, they put a premium on actions that will retain their suppliers and customers from generation to generation." She goes on to describe the fact they are relentless in their pursuit of new business as well. In short, there is a healthy balance. It's not easy taking the long view, but these companies affirm that in doing so, it will indeed pay off.  I did a quick count on the number of companies she has listed and counted 662 (she leaves her email address for those who want to put more Century Club companies on her radar and in her database). I was happy to see that the middle of our country is home to 239 of these great companies. Selfishly, I'd like to think that good old-fashioned Midwestern values has a little something to do with that!
I highly recommend this book and look forward to diving deeper into the other factors the author outlines. We have a lot of work and improvement ahead of us, and this book, and the exceptional companies in its pages, will be a superb guide. Here's to another 68 years in business and achieving Century Club status!
Jim StriedStried Painting   Business relationships at work since 1984.