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2005 Kellogg Family Business Conference Business Family Kellogg 2005 2005Kellogg Family Business Conference KELLOGG CENTER FOR FAMILY ENTERPRISES http://www.kellogg.northwestern.edu/familyenterprises 2005 Kellogg Family 2001 Sheridan Road, Evanston, IL 60208-2001 phone: 847 467-7855 fax: 847 491-5747 Business Conference Best Practices and New Ideas May 17–18, 2005 Sponsored by Kellogg School of Management Northern Trust Corporation Duff & Phelps, LLC KELLOGG CENTER FOR FAMILY ENTERPRISES Professor Lloyd E. Shefsky Co-Director The Center for Family Enterprises grew out of a request Center for Family Enterprises by a group of Kellogg M.B.A. students seven years ago [email protected] to start a club and attend a class focused on the unique aspects of owning, governing and/or managing family Professor John L. Ward businesses. The Center deliberately concentrates on family Co-Director enterprises, with a focus that includes family businesses, Center for Family Enterprises family foundations, family offices, family investment com- [email protected] panies and family wealth management. Carol Zsolnay The Center’s mission is to: Assistant Director Center for Family Enterprises • Provide thought leadership to the field of family [email protected] enterprise Center Website: • Contribute to the body of knowledge through cases, www.kellogg.northwestern.edu/familyenterprises research and publications Phone: 847 467-7855 • Serve student needs through courses, informal work- Fax: 847 491-5747 shops, personal counsel and a resource library 2001 Sheridan Road Evanston, IL 60208 • Build a family business community among Kellogg students, faculty and alumni • Develop a global network of successful business fami- lies who can learn from each other and connect with each other through Kellogg, Kellogg partner executive programs and conferences • Stimulate awareness and research by other Kellogg faculty on the special issues and opportunities for family firms 2005 Kellogg Family Business Conference Best Practices and New Ideas May 17–18, 2005 Nepotism, practiced badly, is largely a After the Second World War the self-punishing offense. company was really in ashes, and my ADAM BELLOW, AUTHOR uncles had to come together and start anew…Over many generations we I think keeping the family’s values learned to survive and to use these relevant to the organization is a fun- challenges to find our opportunities, damental challenge for those of you even in the most difficult times. with your name on the door, or, in our JAN VON HAEFTEN, FRANZ HANIEL & CIE case, on the yard sign. JENNIFER ALTER WARDEN, BAIRD & WARNER REAL ESTATE Contents Welcome from the Center for Family Enterprises 5 Panel: Family Values and Great Business Culture 69 HOST: Greetings from Northern Trust Corporation 8 Christopher Gallo, Kellogg Student Family Enterprise Club Greetings from Duff and Phelps, LLC 9 HOST: Peter H. “P.J.” Huizenga, Jr., Kellogg Student Family Photo Array 10 Enterprise Club Participating Family Companies 14 FACILITATOR: Barry Merkin, Kellogg School of Management Kellogg Student Conference Volunteers 15 PANELISTS: Issues and Answers 17 Charles Farver, Pella Corporation FACILITATOR: Jennifer Alter Warden, Baird & Warner Real Estate, Inc. John L. Ward, Kellogg School of Management Kellogg Award for Special Contributions 79 Perspectives on Nepotism 23 to Family Business HOST: HOST: Chester A. Gougis, Duff & Phelps, LLC Lloyd E. Shefsky, Kellogg School of Management KEYNOTE SPEAKER: PRESENTER: Adam Bellow, Author Dipak C. Jain, Kellogg School of Management FACILITATOR: RECIPIENT: Barry Merkin, Kellogg School of Management Imogene Johnson, The Samuel C. Johnson Family ANALYST: RECIPIENT/SPEAKER: John L. Ward, Kellogg School of Management Helen Johnson-Leipold, The Samuel C. Johnson Family Panel: Perspectives on Family Business Success 39 Live Case Discussion: Fel-Pro Inc. 91 MODERATOR: MODERATOR: M.V. Subbiah, The Murugappa Group John L. Ward, Kellogg School of Management PANELISTS: COMMENTATORS: Harold James, Princeton University Daniel D. Bayston, Duff & Phelps, LLC Isabelle Le Breton-Miller, University of Alberta R. Hugh Magill, Northern Trust Corporation Susan E. Tifft, Duke University Jan von Haeften, Franz Haniel & Cie SPEAKERS: Ken Lehman, KKP Group, Winning Workplaces Decision-Making and Succession Planning 55 Paul Lehman, Winning Workplaces, New Prospect HOST: David C. Blowers, Northern Trust Corporation Foundation PRESENTER: Fel-Pro Case A 107 Victoria H. Medvec, Kellogg School of Management A Five-Generation Winning Workplace Fel-Pro Case B 119 After the Sale—The Lehman Family Transition Appreciation 126 Welcome Dear Friends, We are delighted to present the proceedings from Kellogg’s 2005 Family Business Invitational Conference of May 17 and 18. This book documents the many significant and varied Conference presentations and shares it with a wider family business audience. Our Conference gathers members of the family business community together for two days of lecture, discussion, interaction, experience and celebration. Conference attendees are introduced to new studies and best practices from exemplary family businesses as well as leading university researchers. This year’s Conference was both national and global in scope with 230 par- ticipants representing 90 companies from 18 U.S. states and 10 countries. 2005 KELLOGG FAMILY BUSINESS CONFERENCE 5 We added a new feature with a field trip to the headquarters We are extremely appreciative of our corporate co-sponsor of SC Johnson in Racine, Wisconsin, one of the companies partners, Northern Trust Corporation and Duff & Phelps, owned by the Johnson family, our 2005 recipient of the LLC, whose consistent commitment to this Conference Kellogg Award for Special Contributions to Family and to our Center greatly benefits our research, case writ- Business. We also increased the amount of time participants ing, and publishing. We look forward to a continuing, had to meet one another and strengthen networks with mutually-successful collaboration. other family business attendees from around the globe. We celebrate and salute the enterprising families who We are proud that many have told us that this year’s continue to be preeminent players in the field of business. Conference was our best ever. We are already planning our Their unrivaled contributions to a healthy free market are 2006 Conference and welcome your input and suggestions. finally being recognized by the wider business community In this fourth annual Conference proceedings report —to which we can only exclaim, “It’s about time!” you will find information on some of the most pressing, timely and sensitive challenges facing families in business Best Wishes, today. Additionally, you will find dialogue on topics pre- sented exclusively at Kellogg. Lloyd E. Shefsky Included in this year’s book: Discussions on core family/business values and what makes them a strategic advantage in the marketplace An examination of the decisions that are made to ensure the perpetuation of a family business A historical and social look at nepotism and how it fits into American culture John L. Ward The 2005 Kellogg Award for extraordinary contributions to the field of family business A new case study written specifically for the Conference documenting the difficult decisions that surround the sale of a family business, the subsequent hard work to carry those core values into new business endeavors, and the establish- ment of a family office 6 2005 KELLOGG FAMILY BUSINESS CONFERENCE 8 2005 KELLOGG FAMILY BUSINESS CONFERENCE 2005 KELLOGG FAMILY BUSINESS CONFERENCE 9 10 2005 KELLOGG FAMILY BUSINESS CONFERENCE 2005 KELLOGG FAMILY BUSINESS CONFERENCE 11 12 2005 KELLOGG FAMILY BUSINESS CONFERENCE 2005 KELLOGG FAMILY BUSINESS CONFERENCE 13 Issues and Answers During this opening session, Conference participants used confidential voting technology to answer a series of questions about themselves and their family business experiences. The responses were instantly tabulated and projected on screen for the audience to see. The results helped to determine audience demo- graphics, and reveal any preconceived notions surrounding Conference topics. As a new feature for the book this year, we are able to compare our results to those of attendees of a similar family business conference held June 1 and 2, 2005 in Barcelona, Spain. That conference was sponsored by IESE Business School of the University of Navarra, Barcelona. IESE and Kellogg have collab- orative relationships in family business education and research. PRESENTER: John L. Ward Clinical Professor and Co-Director Center for Family Enterprises Kellogg School of Management 2005 KELLOGG FAMILY BUSINESS CONFERENCE 17 ISSUES AND ANSWERS character. It is our hope that this will encourage you to Who Are You? share experiences and build contacts with other family businesses from around the country and the world. Non-family Manager / 16% Advisor / Director We want to create an opportunity and Senior Generation 29% an environment for attendees to meet one Family Member another and exchange ideas. Next Generation 40% IN the Business Second, we hope to stimulate you with some ideas. As you may know, our Conference does not have a single theme. Next Generation 15% We are not trying to promote a particular topic but offer a NOT in the Business variety of topics for you to consider. 0% 10% 20% 30% 40% Some of the ideas we will explore: • Nepotism • Enduring family business values • Selling the family business • Establishing a family office • Leadership transition • Decision-making
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