Comprising two-thirds of all business entities and accounting for an estimated 70 to 90 percent of global GDP, family-owned businesses are some of the largest and most successful companies in the world. “Family firms have a long-term view because of the owners’ desire to pass them on to the next generation,” says Daniel Wolfenzon, the Stefan H. Robock Professor of Finance and Economics. “As a result, they are more resilient. There is evidence showing that the value of family businesses, relative to non-family businesses, increases during recessions.”
While the challenge of generational transition may be specific to family-owned firms, succession planning is critical for most business owners. How family firms overcome unique issues like sibling rivalries can also be instructive to any organization. “Traditional companies can learn a lot from family businesses,” says Wolfenzon. Here, alumni share stories of the businesses they inherited and led — and some of the lessons they learned along the way.
Alan Wasserstrom ’63
Chair, The Wasserstrom Company
Reinvention is part of the Wasserstrom Company’s DNA. As Alan Wasserstrom ’63 explains, his grandfather, Nathan Wasserstrom, started the family business in 1902, when the elder Wasserstrom began going door to door selling “novelties” in Columbus, Ohio. In 1916, Nathan built on his local connections to open a neighborhood bar, which he turned into a shop for home-brewing equipment after Prohibition struck just three years later. In 1933, when Prohibition was repealed, the nimble founder reinvented the business yet again. He formed N. Wasserstrom and Sons with the help of his eight sons, expanding first into millwork and then, in the mid-1940s, into commercial kitchen equipment, as the restaurant industry soared with the return of young veterans after World War II.
“Going through these economic and political challenges taught my grandfather, father, and uncles that they needed to have the ability to look at the world in a different way every once in a while,” says Alan, who served as president of N. Wasserstrom and Sons from 1976 to 2007. Today, the business supplies popular restaurant chains like Wendy’s with everything from napkins to fryers. It boasts 1,500 employees across six US cities and in England, India, and Venezuela and has more than 2 million square feet of space managed by Alan’s brother Reid. Four generations and more than 100 years after Nathan Wasserstrom set up shop, it is still family owned and operated, with Alan and his cousin Rodney having turned the management over to their sons Eric Bradley and Bruce Wasserstrom.
“My father and uncles figured out that change was part of the landscape,” Alan says. “They might not have liked it — maybe nobody really does — but at the end of the day they figured out how to do it.”
Think outside the box.
“A number of local companies went out of business because they kept doing the same thing in the same way for decades. All of a sudden, they’re doing a really great job of making buggy whips, but there aren’t any buggies. My grandfather, father, and uncles gave my cousins and me a lot of latitude to do things differently. In the 1960s, for example, most local distributors wouldn’t venture far from their market area. By traveling all over the country, we broke that model. We changed the industry.”
Invest for the long term — in people.
“I’ve had a great opportunity to grow something. If I was always hiring the next hotshot out of school, I wouldn’t have been able to grow our salespeople or our engineering people internally. We have a number of employees who retire after 45 years with us. I think public companies could learn from that.”
Don’t baby new talent.
“We put the next generation in a part of the company where they had a boss who wasn’t my cousin or me. That ‘real’ boss taught them from the ground up about our industry, our culture, and our business. It gave them a chance to learn from somebody else — not their fathers — about how they would be most effective and best suited to Wasserstrom.”
Forget job titles.
“It’s about learning how to bring all the family members into this inner circle so that we are working together for the common goal. It’s not about title — it’s about results.”
Robert C. F. Ho ’47 and Linda Ho McAfee ’73
After graduating from Columbia Business School, Shanghai native Robert C. F. Ho ’47 and his wife, Anita Magsaysay, relocated to Anita’s hometown in the Philippines, where Robert founded Magsaysay, which pioneered international shipping in the country by exporting dry bulk products (like wood chips) to China. In the late 1950s, to provide more opportunities for the business and his children, including daughter Linda Ho McAfee ’73, Robert brought his family first to Brazil and then to Japan, where he established Magsaysay and Fairmont Japan. The family thrived in their new home, Linda says, but as the People’s Republic of China began to be recognized, Robert knew his family, with their Taiwanese passports, needed new citizenship. So, in 1965, the Hos moved again, this time to Vancouver, Canada. Another company shipping port in Vancouver followed.
“Because of that tie of moving around to different countries, we developed a very strong partnership that still exists today,” Linda says of her siblings, all of whom are also in the family business. After graduating from Columbia in 1973, Linda worked for merchant bank Citicorp International before joining the family business in 1978. She now serves as a group director of the companies known collectively as the Fairmont-Magsaysay Group.
Today, the business encompasses shipping, real estate, and staffing and now enlists the help of its third generation, which comprises 14 cousins around the world — including Linda’s niece Anna Ho ’16, current president of the Family Business Club at the School. The ties to Columbia remain strong as well: Linda’s brother Steven Ho is a ’78 Columbia College graduate, and her son Zachary McAfee received his master’s degree from the School of Architecture. “Our company’s growth is intertwined with our family history,” says Linda.
Create a culture of equality and fairness.
“My dad imbued a very strong sense of equality and fairness among his children and our roles in the business. Uncommon at the time, he treated us — his three daughters and two sons — the same. No job was lesser than another. Everybody’s role was considered important, and everyone’s personalities and skills were honored.”
Instill a sense of loyalty and commitment to inspire hard work.
“All five of us — my four siblings and I — are absolutely dedicated to our work and care deeply about what we do. There was never a sense of entitlement, and we all felt the same responsibility for the company and our people.”
Plan for unknown futures.
“It is so important to have the discussions on governance and the future of the family business as early as possible. My siblings and I have taken a lot of time to put processes in place to allow for sibling shareholders to retire, sell their parts of the business, or start new businesses without creating chaos in the company. But it is still a work in progress.”
Mark Mays ’89
Former CEO, Clear Channel Communications
Member at Large, Mays Family Foundation
At Clear Channel Communications, transparency was a competitive advantage. “We never had a hidden agenda,” says former CEO Mark Mays ’89. “There weren’t any political dynamics — like ‘How does this make me look?’ — because our culture was always that the best idea wins.”
The media business started in 1972 as a side project for Mark’s father, Lowry Mays. The San Antonio–based investment banker assumed possession of a local FM radio station after the original owner defaulted on his payments. Rather than sell the business, Lowry applied his financial and business acumen to grow it from the ground up. Within two years, the company had acquired several more radio stations in Texas and Oklahoma, and Lowry quit his investment practice to run Clear Channel full time.
By the time Mark joined the business in 1989, Clear Channel had gone public and acquired several television stations. Under the leadership of Lowry, Mark, and Mark’s brother, Randall, the company’s growth skyrocketed. By 2008, when the family sold the company to Bain Capital and THL Partners (who renamed it iHeartMedia, Inc.), Clear Channel commanded 1,200 radio stations, more than 40 television stations, and 750,000 billboard-advertising opportunities. Also boasting event venues and production credits, it had become one of the nation’s largest live entertainment companies, too.
Since 2008, the family has turned its attention to the Mays Family Foundation, which supports educational initiatives, cancer research, and San Antonio–based institutions. Each member of the family, including Mark’s two sisters, is on the foundation’s board. It’s a way, Mark says, for the family to continue his father’s legacy of connecting with the people they served for so many years.
Go by the data.
“We were very analytical — it was important to base decisions on data rather than on feelings. The facts were the facts. If we made bad decisions, we all knew what they were and why we made them. That gets you away from any politics.”
Succession is a team effort.
“For us, succession was about building great management teams and not necessarily focusing on one specific individual. We were big believers that the top position is important, but it’s the whole team that really drives success.”
Keep your cash.
“We kept ourselves very conservatively capitalized so that we could take advantage of opportunities and move quickly. If you’re not conservatively managed, you’re influenced by outsiders — whether they’re bankers or financial analysts — and you don’t get to make independent decisions.”
Chayenne Wiskerke ’13
Director of Sales, Wiskerke Onions
As the fourth generation of her family to lead Wiskerke Onions, Chayenne Wiskerke ’13 is building on a tradition of farming innovation that dates back to 1933, when her great-grandfather Jacob Wiskerke first began peddling the most modest of vegetables: the onion. Leveraging Holland’s temperate climate, he focused on onions of every variety, from sweet to shallot. Over the next several decades, each generation of Wiskerkes modernized the business, with developments like climate-controlled trucks and warehouses. By 1980, the family business was already packing and shipping 10,000 tons of onions annually — enough to feed more than 1.5 million Americans each year.
When Chayenne joined in 2013, she helped the company harness digital technology to achieve even higher levels of quality control. With its optical sorting machine, the company now scans and photographs each onion to test for color, shape, and internal quality. Recently, Wiskerke Onions became the first in the industry to make its products fully traceable; customers can see exactly what they are getting, all the way back to the farmer’s growing report. The company is now collaborating with Lamb Weston/Meijer, a maker of frozen potato products, to transform the heat waste from potato processing into a sustainable way to dry and preserve Wiskerke onions.
Today, Wiskerke Onions is the world’s largest exporter of onions, with over 150,000 tons shipped to more than 90 countries annually. And the company’s future is bright, with Holland’s onion exports predicted to grow up to 50 percent by 2050. Chayenne credits her father and his progressive thinking for inviting her to learn through hands-on experience.
“Creating an environment that allows our employees to learn and bring forward new ideas is crucial to our success,” she says. “My office door is always open.”
Trust the next generation.
“For the first three months I was on the job, my father, Jaap, taught me everything. He showed me how the company works. I rotated through different departments; we visited customers. Then he left for a month. He gave me his telephone number and said, ‘Play my role for four weeks and see if you like the job, if you have the right feeling, and if you can handle it.’ He completely let go. Those four weeks were the best weeks so far. I made mistakes but I learned, gained confidence, and knew that I really wanted to do this.”
Think of the organization as a family.
“I think our strongest point is our teamwork. There are very close connections. Everyone has the feeling that this is their company. That’s absolutely our core strength. It’s that teamwork and extra push everybody gives that makes us successful.”
Communicate your succession plan.
“In times of change, have clear rules and strategies so that everyone knows what is happening. Everyone needs to understand the process to make sure that the company, when it’s being transferred from one generation to the next, does not lose its strength.”