DeWitt Barrels is a 117-year-old company that just won the Michigan Family-Owned Business of the Year award. In the Grand Rapids Press article announcing the award, president Peter DeWitt (whose great-great-grandfather started the business) says "We looked forward to see trends and adapted and made changes to meet demands.....We wouldn't make it if we stayed the same." DeWitt Barrels has never made barrels - it reconditions them for re-use. Today that mostly means cleaning 55-gallon steel drums for oil and chemical companies rather than wooden barrels.
Though their business has changed over the years, how they run it has not. "There are no shortcuts," says Peter DeWitt. "You follow all the rules, even if it's expensive or you have to work more." This particularly comes into play in the area of environmental care: the company has been a state-designated Clean Corporate Citizen since 1999.
Businesses overall are using barrels less often and the DeWitts have watched many other re-conditioners leave the industry. But Peter DeWitt is confident the company will adapt again and last another generation. "Our father gave the company to us [Peter runs the company with two of his brothers] with the same mandate he had - to build it, take care of it and pass it on. When we pass it on to Jason [Peter's son, who is currently the plant manager] it needs to be in a situation for him to make it grow."
Saturday, March 13, 2010
Friday, March 12, 2010
Many Old Companies Are Family Businesses
An article recently appeared in the Muskegon Chronicle about a 100-year-old shoe store in Fremont, Michigan. The owner of Vredeveld Shoes is Lon Vredeveld - the fourth-generation of his family to run the store, which opened in 1909. In the article Vredeveld likens his and other independent stores to dinosaurs for their old-fashioned methods of customer service and community involvement.
But what Vredeveld characterizes as dinosaur behavior may just be a type of business-savvy wisdom passed on through the years. Family Business magazine has been researching old family-owned businesses and their research offers four lessons of survival:
1. Stay small
2. Don't go public
3. Stay out of the big cities
4. Keep the business in the family
Vredeveld says that the poor economy has hurt his store, but he thinks a niche for independent shoe stores like his will remain. "We're not getting to 100 years and stopping," he reports. Though Vredeveld has three grown children, he said he is not sure if any of them will every take over the business. He's hoping there is still plenty of time to figure out the future.
In a recent profile in the Holland Sentinel, Max Lokers (co-owner with his brother Tom of Lokers Shoes) also uses the dinosaur analolgy when describing their family shoe store as a dying breed. "I would call us one of the dinosaur types of businesses.....We're still in our brick-and-mortar building, doing what we've been doing for going on 100 years." However, within the last decade Lokers has added services, including some provided by Max's step-son, and he reports that he and Tom hope to continue selling shoes in downtown Holland for generations to come.
Since they appear to be following the advice given in the Family Business research, perhaps these "dinosaurs" will survive.
But what Vredeveld characterizes as dinosaur behavior may just be a type of business-savvy wisdom passed on through the years. Family Business magazine has been researching old family-owned businesses and their research offers four lessons of survival:
1. Stay small
2. Don't go public
3. Stay out of the big cities
4. Keep the business in the family
Vredeveld says that the poor economy has hurt his store, but he thinks a niche for independent shoe stores like his will remain. "We're not getting to 100 years and stopping," he reports. Though Vredeveld has three grown children, he said he is not sure if any of them will every take over the business. He's hoping there is still plenty of time to figure out the future.
In a recent profile in the Holland Sentinel, Max Lokers (co-owner with his brother Tom of Lokers Shoes) also uses the dinosaur analolgy when describing their family shoe store as a dying breed. "I would call us one of the dinosaur types of businesses.....We're still in our brick-and-mortar building, doing what we've been doing for going on 100 years." However, within the last decade Lokers has added services, including some provided by Max's step-son, and he reports that he and Tom hope to continue selling shoes in downtown Holland for generations to come.
Since they appear to be following the advice given in the Family Business research, perhaps these "dinosaurs" will survive.
Tuesday, January 26, 2010
305 Companies and Counting.....
One of my student researchers, Alison Meshkin, has put together our first "scrubbed" list of U.S. companies over 100 years old and it has over 300 companies on it. This list consists mostly of large, national companies. Another student researcher, Kurt Goldsby, has a list of around 30 Michigan companies we have culled from various sources, including newspaper stories and ads. I'm sure there are many smaller local or regional companies we can add to our data base as we hear about them, so I am sending this appeal to my "followers" out there to post a comment when you hear of a company that should be part of this Century Club.
Monday, January 11, 2010
100-Year-Old Businesses Lost in 2009
According to CNN Money.com more than 45,000 businesses closed their doors for good in 2009, including some that survived for longer than a century. They profile six of these historic companies that vanished, including a candy company and several retailers in businesses as varied as school supplies, food and a department store.
http://money.cnn.com/galleries/2009/smallbusiness/0912/gallery.100_year_old_business_deaths/index.html
I just heard from a friend that the century-old independent bank for which he had been a board member is being acquired. These economic times are tough on many companies, but it is particularly sad to see these old companies with all their history go away. For many customers and community members, it's like losing an old friend. (One owner reports that he is still receiving condolences from area residents about the store's closing in August.)
It is my hope that identifying common success factors of those century-old companies that do survive might help other companies weather tough times.
http://money.cnn.com/galleries/2009/smallbusiness/0912/gallery.100_year_old_business_deaths/index.html
I just heard from a friend that the century-old independent bank for which he had been a board member is being acquired. These economic times are tough on many companies, but it is particularly sad to see these old companies with all their history go away. For many customers and community members, it's like losing an old friend. (One owner reports that he is still receiving condolences from area residents about the store's closing in August.)
It is my hope that identifying common success factors of those century-old companies that do survive might help other companies weather tough times.
Wednesday, December 23, 2009
Can We Increase Company Longevity?
Humans have learned what behaviors increase longevity: a balanced diet, regular exercise, monitoring blood pressure and cholesterol, etc. By identifying, monitoring and acting on the right factors, the average human life span has increased over 80 percent in just one century. (According to a 2004 publication by Hewitt Associates, life expectancy was 40 in the early 1900s and 75 years at the turn of the century.) If the life expectancy of a person can increase through the identification of longevity factors, why can't a company's?
Various studies indicate the average life span of firms is 12 to 15 years, that 40 percent of all newly-created companies last less than 10 years, and of those who survive the first 10 years the average life expectancy is 40 to 50 years. Yet some companies "live" one hundred years and more. Perhaps a reason for so many premature deaths is that corporations have not identified and cultivated the factors needed to increase longevity. If we can identify common factors that old companies share, might young companies who want to "live long and prosper" also incorporate these practices?
Various studies indicate the average life span of firms is 12 to 15 years, that 40 percent of all newly-created companies last less than 10 years, and of those who survive the first 10 years the average life expectancy is 40 to 50 years. Yet some companies "live" one hundred years and more. Perhaps a reason for so many premature deaths is that corporations have not identified and cultivated the factors needed to increase longevity. If we can identify common factors that old companies share, might young companies who want to "live long and prosper" also incorporate these practices?
Monday, December 21, 2009
"Family" Connections
Not all old companies are family-owned, but a significant number are privately-held. The majority of 100-year-old local companies I have studied indicate that remaining private is a key factor in their survival over the long term. Yesterday (December 20, 2009) Fisk Johnson, the 5th generation of his family to run S.C. Johnson & Son, Inc., ran a full-page ad in Parade magazine that explains well the thinking of these companies:
"[Being a family company] means that we don't report to Wall Street. The decisions we make come down to caring for you and the world we share not what analysts want to hear. And quite frankly, that doesn't always mean doing what's easy. But when I go to bed at night, I know what were trying to do is right.....To us, family is more than a relation. It's our inspiration....Times may have changed since my great-great-grandfather started SC Johnson, but the inspiriation behind what we do remains exactly the same."
This thinking reflects de Gues' proposition that companies are human communities, rather than pure economic machines. When company leaders feel this type of "family" obligation to their customers, employees and other stakeholders, it appears to lead to the type of business decisions that lead to long-term company success.
"[Being a family company] means that we don't report to Wall Street. The decisions we make come down to caring for you and the world we share not what analysts want to hear. And quite frankly, that doesn't always mean doing what's easy. But when I go to bed at night, I know what were trying to do is right.....To us, family is more than a relation. It's our inspiration....Times may have changed since my great-great-grandfather started SC Johnson, but the inspiriation behind what we do remains exactly the same."
This thinking reflects de Gues' proposition that companies are human communities, rather than pure economic machines. When company leaders feel this type of "family" obligation to their customers, employees and other stakeholders, it appears to lead to the type of business decisions that lead to long-term company success.
Saturday, December 19, 2009
Why Study Old Companies?
For several years I have been interested in learning about very old companies (those with at least 100 years of independent operation) to see if there are any common behaviors or strategies they employ which have led to their longevity. My curiosity regarding "old" companies began while I was the Executive Vice President of Strategy at Herman Miller, Inc. I attended a conference where Arie de Gues spoke about his time in strategic planning at Royal Dutch Shell and was able to have a conversation with him about research they had done on very large, old companies. (In 1997 de Gues published The Living Company: Habits for Survival in a Turbulent Business Environment describing the results of this work.) de Gues maintains that the average life expectancy of a Fortune 500 company is 40-50 years and asks why some are able to "live" for 200 years and more.
Once I left corporate America to become a college professor, my interest in the question of why some companies are able to live very long lives whereas others "die" young was renewed. While leading a group of students on a May Term in Japan, we heard a lecture from a Japanese professor on research he had done on very old Japanese companies. (The Japanese even have a word for such companies: shinise.) Unlike de Gues' research, Makoto Kanda's work focused more on small to medium-sized companies rather than very large enterprises.
I am now engaged in research on 100-year-old companies in the United States. I have student researchers working on building a data base and have developed a survey instrument to use with identified companies. Preliminary results indicate there are advantages not only to the company owners and investors when a company survives for a long period of time: employees, customers, suppliers and communities all appear to benefit from company longevity. I will publish progess on our research on this blog.
I am also very interested in hearing about companies readers know of that are over 100 years old. Are there things new companies can learn from the "century club" that might ensure their own survival beyond the average company lifespan? What do you think - does age matter?
Once I left corporate America to become a college professor, my interest in the question of why some companies are able to live very long lives whereas others "die" young was renewed. While leading a group of students on a May Term in Japan, we heard a lecture from a Japanese professor on research he had done on very old Japanese companies. (The Japanese even have a word for such companies: shinise.) Unlike de Gues' research, Makoto Kanda's work focused more on small to medium-sized companies rather than very large enterprises.
I am now engaged in research on 100-year-old companies in the United States. I have student researchers working on building a data base and have developed a survey instrument to use with identified companies. Preliminary results indicate there are advantages not only to the company owners and investors when a company survives for a long period of time: employees, customers, suppliers and communities all appear to benefit from company longevity. I will publish progess on our research on this blog.
I am also very interested in hearing about companies readers know of that are over 100 years old. Are there things new companies can learn from the "century club" that might ensure their own survival beyond the average company lifespan? What do you think - does age matter?
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