How This Century-Old Family Business is Preparing for the Next Generation’s Leadership
Our family began farming in Lodi, California the late 1800s, when my great-great grandparents emigrated from Germany and began growing non-irrigated watermelons. From that humble beginning, the family grew their holdings and ultimately bought a vineyard in 1916. Each generation since has built on the efforts of the one that came before, continuing the legacy of stewardship of the land.
Our business, LangeTwins Family Winery and Vineyards, grew from that foundation, a partnership between my father and his twin brother, who bought land from their parents and launched their own viticultural company at the ripe old age of 25.
So, I’m a fifth-generation member of our farm family, but a second-generation operator in LangeTwins Family Winery and Vineyards. I’m the first of our three, but, really, the eldest of five. Let me explain. I have two brothers and two cousins on my uncle's side, and we were raised as a family of nine. Two sets of parents, five kids, living next door to one another in houses built 100 yards apart, in the middle of 200 acres of land without a neighbor to be seen.
Suffice it to say, my brothers and my cousins were my playmates and closest confidants as we grew up together—literally in the middle of our family business. Our bond began in the sandbox and was fostered through family dinners and days spent exploring the edge of the Mokelumne River, hiking, riding horses, and attending country schools together.
Our parents nurtured our connection further by taking us on backpacking adventures through the Sierra Nevada mountains and further afield. Our family travel, which included trekking trips in Nepal, Africa, and Patagonia, offered us experiences that deepened our love and respect for the natural world and for one another. “We are better together,” was our parents’ refrain.
Those experiences often put us in challenging situations together—climbing Kilimanjaro is no easy feat—and we learned how to support one another and how to communicate. We also learned one another’s strengths and weaknesses and how to navigate disagreements. Ultimately, we gained a shared passion and perspective, a family trove of insight and experience.
Our connection also grew through our shared daily experiences within the business. As the children of farmers, we lived the daily and seasonal rhythms of the family business together, very aware of the natural cycle of the growing season, the harvest season, and the celebration of the fruits of our labor. As a family, we were in the fields, in the office, and participating in the social and business development events related to the business. I distinctly remember sitting at the table in many discussions with Robert Mondavi and his team, talking about vineyards and grapes and wines. As cousins, we absorbed that essential informal education together.
After each leaving the area for college, all five of us came back to the family business with that foundation of shared experience and deep, inherent knowledge of one another and of our family’s values. We were very fortunate that, before we returned our parents had the foresight to assess what their perspective was on our generation’s role in the business. They understood that family businesses often capsize under the weight of misunderstandings and misalignment around the vision in the succession between generations, and they were determined to avoid that scenario.
They developed family governance, creating a family council and an advisory board and laid foundational groundwork to establish the rules of the road for our generation’s entry into the enterprise. Their goal was twofold: To maintain the integrity of the family relationships; and, to ensure that the contribution of the individual would be additive to the business. In other words, there would be no free rides.
With this foundation in place, there was a clear path for my generation to step into the company. Today, all five second-generation family members work in the business. People always ask us, “How did you decide who would be in charge? Who would have which role?” And for us, those questions never actually arose because we very naturally fell into a cadence of looking to expand on our individual expertise. There was never a wrangling for power because we had spent 30 years growing together, wrapped in the fabric of our family’s shared values and understanding what it takes to grow a business together.
In recent years, our generation has spent considerable time reflecting on our “why” and articulating our vision for the company, which is to cultivate a lasting impact, together. We know that one important aspect of cultivating that impact is to intentionally knit our children’s lives and experiences together, to strive to create the same bond and lasting connection we have in the next generation.
To that end, we’re continuing on many of the beloved traditions of our generation—backpacking, spending time on the land and in the business, sharing meals and family celebrations—but we’re also looking for new opportunities to grow and connect. We know that our kids will have different interests and passions, and we want to honor that curiosity and share experiences that allow us all to grow and learn together.
Just as our generation had freedom to explore and pursue our own path—we were never burdened by an obligation to return to the family business—we want to open the aperture on experience for this generation. I hope that if they choose to come back and work in the business, the work we’re doing now to sustain and deepen their bonds will provide a foundation of love and shared experience, the ability to collaborate, and a broad perspective that will foster the innovation that’s essential in an Evergreen® business.
Marissa Lange is President of LangeTwins Family Winery and Vineyards
A Risk Worth Taking: Building an Evergreen Business
In 1996, my wife—then my fiancé—and I were living in Vermont, where we had graduated college several years before. Originally from Columbus, Montana, I was looking for a way home. I had been raised on a ranch about 100 miles east of Bozeman, which my family had homesteaded and worked for five generations. My connection to Montana ran deep, and I felt a strong calling to come home.
The problem was, there were very few jobs available in Montana at that time. I was dissatisfied with my work selling institutional research to money managers and traders because I felt disconnected both from a tangible product and from the culture of the customers I served. A job in manufacturing and creating a company had always been a strong interest.
When I learned of an opportunity to purchase a small, homegrown business in Livingston, I said yes. The company’s founder, a seamstress, had built a business creating soft toys for dogs and cats, stitched by a network of home sewers, which were sold to about 200 independent retailers. It was at a scale where I could learn by doing the work, and the former owner had agreed to take my calls and discuss ideas and concerns through my first year.
All that to say, it was a risk—there was a real possibility that I could fail. But I jumped in with both feet anyway—not because I had a passion for pet toys, but because I had a vision to build and grow a company in Montana that would provide opportunity for people and positively impact the place I loved.
Having bought the business, I made a series of decisions in the first year that went against what the former owner and current business best practices advised. While I recognized the risk at each point, I felt strongly that every step was necessary for the sustained growth that would help ensure jobs and opportunity for people in our region. That was my north star.
Those early decisions included renaming and rebranding the company—Pet Pals became West Paw, Inc.; attending an industry trade show, something the former owner had never done, to introduce our brand to a new audience; and, committing to maintaining a direct-to-retail model to keep us close to our retail partners and avoid being beholden to any one large customer. I also decided to double down on domestic manufacturing at a time when people were offshoring left and right. I knew that to honor my purpose of bringing good jobs to Montana, I needed to make our products here.
I think all of those decisions made in the early years of ownership were pivotal and represented what I recognize now as the first significant phase of growth in the life cycle of our company. In retrospect, they seem courageous, but at the time, they just felt right. I was willing to take big risks, and I think those big risks paid off because they were aligned with my core values and with where I wanted to take the company.
But if you were to chart our growth story onward from those early years, the graph would not reflect a straight upward trajectory to the right. We’ve navigated several periods of challenge, each ultimately an opportunity to recommit to sustainable growth and our purpose.
In 2008, the momentum and excitement of those early years had transitioned to what felt to me at the time like a slogging pace. I was burned out, and I found myself at an uncomfortable moment: I didn’t like my business anymore. I was ready to sell. I thought that if I could find the right local person who would keep the jobs here—or tell me they would—I was ready to get out.
Just about that time, my wife, Kerry, who from the early years had been a valuable advisor and was watching me struggle, shared an article with me about the National Center For Employee Ownership (NCEO). She encouraged me to attend an upcoming NCEO conference, and I went. It was the right decision. I came home both inspired by the idea of working toward employee ownership and with the realization that I needed to hire a management layer. If I was going to continue to grow the business, I needed a team around me.
Investing in my management team was a strategic and financial decision that allowed me to step away from the intensity of managing so many aspects of the business and get inspired again to grow the company. By 2012, with the support of the new hires and new products that continued to focus on environmentally friendly materials, we were in fact growing quickly and trying new things. But we found that we had grown into a problem, as well: one of those new things we tried was to change our production systems, which was a failure. By the end of 2012, we had a negative book value. We were not bankable.
It was that crisis—as it is for so many businesses—that really inspired us to open our books and implement the Great Game of Business (GGOB) operating system. I launched GGOB with a simple five-line P&L and conversations with the team about how we were growing and why we were bleeding cash. Then, we invited GGOB’s Rich Armstrong to Bozeman to help us implement the financial literacy portion of the operating system and the huddle rhythms. There’s no doubt that the crisis was painful, but implementing GGOB helped us come roaring back in 2013 with profitable growth. The entire team was able to see the impact of financial literacy and open-book management.
Over the next several years, we maintained profitability, but I started to recognize, again, a sense of stagnation. We were all getting a little too comfortable, and our growth was slowing—we seemed to have lost our hunger. It was clear that we needed to innovate to push into the next phase of growth. We did two things in response that provided the renewed momentum we needed: we brought in new product designers to launch new product lines and we began intentional training around growth mindset.
Through our in-house training curriculum, we focused on first asking the question: How can we show up in our work—across all positions from manufacturing to accounting—with a growth mindset, as opposed to a fixed mindset? We created related themes in the next couple of years to rally the team behind this approach. The first, in 2019, “Beat Your Commit,” was focused on stepping out of complacency and driving accountability; the second, in 2020, was “I Drive Growth,” honing in on how each individual can drive growth in their personal lives, the life of the company, and in our community. In 2021, we are once again on a high growth trajectory, and we’re embracing the theme of “Sustainable Growth”—a theme I hope will guide our Evergreen® company for many years to come.
When I started to grow our business in 1996, I don’t think I really understood that we could have a company of nearly 100 people, attracting employees from communities all around our region to work here every day over three shifts. While I had a vision of creating good jobs, I didn’t imagine the extent to which we could impact people’s lives. By providing careers and training, financial literacy, healthcare, and other benefits, West Paw is making a difference in families and communities, which brings me great joy. I’m grateful for the perseverance of our team to work through each challenge and continue to grow in our purpose.
Spencer Williams is CEO of West Paw.
People of All Faiths Are at the Heart of What We Do
My mom and dad, Paul and Carol Kuck, founded our family company, Regal Marine Industries, in 1969. From the beginning, my dad used to say, “We’re in the people business, and we build great boats.”
We still believe that today. We strive to put People First, embracing policies that many Evergreen® businesses support—competitive pay and benefits, professional development and training opportunities, and an employee hardship fund, among them. Another powerful way we have found to support our team for over 20 years now is by providing workplace chaplains.
We know that our 750 team members come to work each day with a wide variety of goals, concerns, and challenges, and we want them to have a resource to address not only professional issues but to support their spiritual and emotional wellbeing. We want our team to know that we will walk with them when life is good and help them when they struggle—because we all do.
The chaplains we employ through Marketplace Chaplains, a third-party service, are integrated into the company as caregivers. We consider them part of the Regal family, and they support team members in a variety of ways. Throughout the work week, male and female chaplains spend time at the company, visiting and checking in with the team. Currently, we have six different chaplains who rotate through the company any given week and who, as a group, reflect the diversity of our team. They are charged with supporting team members of all faiths, without any agenda or bias.
The interaction between chaplains and team members is often very casual—they are connecting as caring friends, asking after people’s families, and building trusted relationships. As those relationships develop, the chaplains often have a deep knowledge of an employee’s family and personal life and are able to step in to provide comfort and counseling when a challenge arises and share in the joy of positive life events. Our chaplains have officiated at Regal employees’ weddings and funerals, provided marital counseling, and shared in many other milestone events among our team.
While some companies do employ full-time chaplains as members of their team, we appreciate the separation of working through a third-party provider because of the confidence it offers team members around confidentiality. We don’t receive any information about any interactions between the chaplains and team members, which we think allows for more authentic sharing around potentially sensitive topics. That’s the approach we have taken, but there are certainly a variety of ways to provide this benefit for your team.
After 20 years of offering Regal team members this resource, workplace chaplains remain a core pillar of our benefits. But the benefit is one tile of the larger mosaic of our People First picture. It’s one more way we can support the whole person as they come to work each day at our company, which is what this is really all about. We love to build boats, and it’s awesome that we get to do that, but at the end of the day, it’s people that are at the heart of what we do.
Duane Kuck is CEO of Regal Boats.
Tugboat Institute Summit 2021: Connected and Curious
Every Tugboat Institute Summit is special. Its uniqueness reveals itself as two-and-a-half days of experiences unfold in the idyllic setting of Sun Valley, Idaho—a safe place to take off the armor, reflect, and be fully present. It was particularly meaningful to bring together Evergreen® leaders for this summit after a year of being apart.
As such, we were certain that the spirit of reconnection would be the unofficial theme of this ninth annual celebration. Tugboat Institute® members and event speakers were finally able to detach from Zoom screens and reacquaint themselves on a socially safe and human level. However, as we came together it was clear that the drive to gather was more than reconnection. It was a resurgence. A determined display of strength in numbers. Over 135 attendees, from 133 companies, in 27 industries, based in 33 states showed up and shared. The highest in-person summit attendance thus far.
The energy began to build with pre-program meetings. First Year Orientation provided 47 new members a warm introduction to the Tugboat Institute Summit experience thanks to the guidance of Tugboat Chairman, Jeff Snipes and Tugboat Institute’s Maria Hilton. Veteran attendees Elizabeth Glasbrenner, Mac Harman, Don MacAskill, and Lester Thornhill balanced the practical with the personal by sharing their insight and lessons learned. A workshop for large, multi-generational companies rounded out the half-day schedule and was led by Jennifer Pendergast, John L. Ward Clinical Professor of Family Enterprise and Executive Director of the John L. Ward Center for Family Enterprises at Kellogg School of Management, Northwestern University. The ideas formed during this meeting became part of the conversation for Jennifer’s presentation to all the attendees later in the week.
Mindfully curated TED-style talks comprised the next two days of programming—a mix of thought-provoking business ideas, post pandemic best practices, Evergreen principles in action, and personal journeys to inspire change beyond the boardroom.
Dave Whorton, CEO and Founder of Tugboat Institute, kicked off the experience with a brief history of venture capital, the development of the “Get Big Fast” playbook, and how Evergreen businesses prove there is an alternative path to growing leading and lasting companies. Gary Kunkle, PhD, Sr. Research Associate of University of Wisconsin, and David Eichhorn, President and Head of investments at NISA continued this thread by sharing insights around sustainable growth and how to manage the challenges that accompany a long horizon strategy. Jennifer Pendergast and Steve Shifman, CEO of Michelman, spoke to the crucial role of planning a healthy transition of leadership in family-owned businesses along with navigating the emotional element of this professional and personal process.
Best practices and innovative methods of building healthy and productive work environments while balancing business with creativity were topics addressed by Lisa Picard, CEO of EQ Office, and Leslie Jackson Chihuly, President and CEO of Chihuly Studio. Going back to the basics and the critical importance of instilling character in our youth and educational systems was the theme presented by David Holmes, Director of Character Collaborative. Steve Preston, CEO of Goodwill Industries International, asked attendees to reconsider their current hiring filter and apply a more enlightened approach to finding talent outside of the halls of academics.
People making an impact was at the center of the following talks. Dave Petersen, President and CEO of O.C. Tanner Company, and Susie Quesada, President of Ramar Foods International, focused on the abundance of professional satisfaction and innovation that comes from a People First workplace. Evergreen business leaders Tom Rosztoczy, Michael Spraggins, and Lester Thornhill presented tangible ways to create real change in your own community and beyond. Melvin Gravely, CEO of TriVersity Construction, and Conni Reed, Founder and CEO of Consuela, vulnerably shared deeply personal stories that profoundly shifted the thinking and perspective of the audience.
Following the talks, the attendees were given the opportunity to reflect and further discuss during afternoon adventures and evening celebrations at iconic Sun Valley locations. Whether on a bicycle, the golf course, or around an intimate conversation at dinner, attendees noted the depth and ease of connection with their peers despite the year gap at in-person events.
There is no doubt that the commitment to the Evergreen movement remains strong despite a global pandemic—an intact community of purpose-driven leaders united by the Evergreen 7Ps® principles and the common ground on which they build companies that last and make a difference. We look forward to continuing the conversations in our upcoming Tugboat Seminars, Tugboat Institute Fall Exemplar visit to Edward Jones, and again at Tugboat Institute Summit 2022.
Until then…be curious.
Susanne Lally is Director of Marketing, Trademarks, and Partnerships at Tugboat Institute.
A Century-Old Family Business Comes of Age
In 1993, when I joined our Evergreen® family business, Haws, the company was being operated by two grandsons of the founder—my father-in-law and one of his cousins. The company, which manufactures hydration and emergency response equipment, was founded in 1906, and the cousins represented third generation family leadership in the business.
When I stepped in, there was an unspoken understanding that the two cousins ran the business, and no other family members really asked questions. My wife has no recollection of any conversations around the business while she was growing up; family shareholder involvement was really non-existent.
Having spent my early career in the military—I had attended the Naval Academy and was still serving as an officer when my father-in-law approached me about joining the company—I entered into that landscape without expectations or awareness of best practices around governance. I didn’t have a roadmap.
In 2005, the potential for significant damage to the company in the absence of clear governance was highlighted when our family went through a challenging internal conflict that revealed the lack of hygiene in this area. As difficult as that period was, the outcome was positive: A commitment, as family stewards of our business, to do the governance work necessary to protect the business. Our efforts since that time have been transformative, and, we believe, will help ensure the long-term sustainability of our private, family ownership.
In reflecting on the key learnings of our family’s experience, there are steps we have taken and practices we have implemented that have been essential in creating the roadmap we now have to help grow the company for another 100 years:
Professional Facilitation for Effective Communication
It’s no secret that families don't always do a great job communicating in general, even in the best of circumstances. In a family business, wherein family members are also shareholders, the situation can be ripe for miscommunication and heightened emotions.
We found that inviting a family facilitator to help us was incredibly helpful. This professional created a safe space in which we could have productive conversations that focused on the issues of the business, not personal history, and led to productive conclusions.
In seeking this help, we were lucky to find a professional who was a great fit for our family in tone, style, and expertise. This allowed our shareholders—who at the time ranged in age from 35 to 80—to feel comfortable in what is a potentially vulnerable situation and contribute to the conversation.
Family Council
The precedent of non-communication among family shareholders was initially a cultural barrier, harder to overcome than we had anticipated. But the formation of the family council and a regular cadence of family meetings allowed us to move forward. Very quickly, when we brought in our outside facilitators at our first meeting, everybody saw the walls come crumbling down. The collective reaction was, “Wow, this is actually really good work. I'm glad we're doing it.”
The family council, which included G3 through G4 shareholders, became the vehicle that we used to discuss and implement governance. Two first critical steps in this process were the drafting of our family creed and guiding principles, which took several months for twelve members to agree upon. This was later followed by the crafting of a buy-sell agreement, which would come to serve us later.
Values and Guiding Principles
The development of our guiding principles through the family council forced us to ask, as a family, “What is important to us? What are our values?”
In our case, those conversations transformed our company in a way we didn’t expect. It became very clear as we discussed the business as an extended family, that in spite of the fact that my father-in-law and his cousin ran the business together for decades, they had very different values.
The two families were not aligned around the purpose of the business. Our side of the family was interested in investing in the business on a very long-term horizon; the other side was interested in extracting money out of the business and using it to support their lifestyle. We weren’t on the same page.
Our disparate views could have meant the end to our family business had we not engaged the family facilitator to help us through these challenging conversations. Through facilitation, we were able to avoid personal conflict and focus on the issues. One thing we agreed upon was increasing family accountability in the business, which resulted in a decision to establish a board that would include independent directors.
Board of Directors
As family owners working in the business, we wanted to be held accountable to what the larger group of family shareholders wanted us to deliver. If any one of us who held operating roles was not the best-qualified person for that position, we wanted that feedback from an objective board. And we got it. It was this board that within a year had decided that the family member running the business should be replaced. By now, G4 was running the business, and that decision ultimately led to my wife and her sister buying out their cousins for full control of the enterprise. In our case, we had to break the family apart to make the business stronger for the long term. We simply could not share business ownership and not share the same values.
Growing Together Today for a Healthy Future
We know that our work around governance is not over. In fact, it’s an ongoing practice. While we’ve established helpful foundational processes and guidelines, those are really just scaffolding for the many actions and decisions we make daily as a family in the business and as shareholders. We are continually reiterating our values, especially to the G5 shareholders, to ensure we remain aligned: “This is who we are. This is how we behave.” And, because we now have guidelines and established practices as family shareholders, if anyone has a question or says, “Hey, there's a better way to do this,” we can get together and have a productive conversation.
Finally, the time and effort we have expended and continue to devote to this work has another, incredibly fulfilling upside: It brings us closer as a family. Serving the business together, sharing that responsibility and continually articulating what that means, connects us to one another and the long-term success of the gift we share.
Tom White is Chairman and CEO of Haws Corporation.
A Wall Street 'Numbers Guy' Learns a Better Way: Build an Evergreen Company
I founded our Evergreen® laundromat business, SuperSuds, in 1996. Having come from a career on Wall Street, I launched the company as a numbers guy. I saw opportunity in a $6 billion fragmented industry, consisting mostly of mom-and-pop stores, to grow a regional business through paced acquisitions over time. The metrics were all promising for developing professionally run stores, and I jumped in.
I quickly realized what I had known theoretically in my finance career—there’s a big difference between being an investor and being an operator. I had never managed people, and I was learning as I went.
Fast forward ten years, and I was loving the entrepreneurial journey and the fulfillment of owning and operating the business. I recognized what a great opportunity our SuperSuds model represented if we continued to grow. But I also realized that to grow as I envisioned, I needed to focus on operational excellence—to really dig in and create processes to move us forward. It was at that point that I re-read Jack Stack’s The Great Game of Business (GGOB). It was an eye-opening re-introduction to the principles of open book management.
The implementation of GGOB in 2016 transformed SuperSuds into an open-book, values-driven organization and has propelled us to disrupt our industry. Values-based customer service carried out by team members via intentional, right actions stemming from a shared vision has become our secret sauce.
Our vision is to create an environment where our customers actually look forward to doing their laundry. We do that through our unique customer service experience, which makes a lasting and positive impact on our employees, our customers, and the communities we serve every day.
We have developed our approach to customer service over the years through key learnings from leaders across other industries who have cracked the code—think Ritz-Carlton and Chick-fil-A—but also from ideas generated from our own team. Together, these practices and holistic orientation toward serving or customers drive us toward our vision.
And while we’re incredibly proud to tout that vision on our website, we understand that achieving that goal is only possible when our team lives it every day through consistent actions aligned with our values. We call these right actions “The SuperSuds Way”—specific steps that are each tied to one of our six core values and which, together, create a better customer experience. Because at the end of the day, if our customers aren't getting a good experience, they're not going to come back. Any one of our approximately 20,000 competitors can put in new equipment; what truly moves the needle forward, and creates a lasting competitive advantage, is the way our team engages with our customers.
For instance, one of our six core values is “Go Above and Beyond to Create a Community of Loyal Customers.” The action, or “SuperSuds Way,” connected to this value is an approach we call LAST: Listen to the problem with empathy; Apologize with sincerity; Solve the problem; and Thank the customer for his or her business. Importantly, employees have monetary discretion to solve the problem, when required; they don't have to call a manager or promise to send a refund check. The customer receives a refund, sees their problem solved, and is thanked for their business. The team member is empowered by taking an action aligned with our values and helps us achieve our vision by adding one more satisfied customer to our loyal community.
Through this and other actions within the SuperSuds Way, we have created a road map of specific steps team members can follow. Rather than encouraging employees to abide by a generic value, which might be subject to interpretation from person to person, we are offering a clear, direct action to take today to help the team achieve success. Right actions repeated over time result in behavioral change in employees and across the organization, as these steps become second nature.
To ensure team members continue to take right actions, we’ve implemented systems to recognize and reward employees who are living our values. When a team member takes an action that leads to great customer experience, they get positive feedback, which then reinforces future actions. How do we learn about those actions? We gather feedback from customers through surveys, online reviews, questionnaire cards at our stores, website comments, and an 800-number. We also solicit direct feedback from other employees who notice when a colleague has done something to highlight.
Every week, we gather our key 60-plus employees for a virtual Huddle, during which we share financials and provide team members the opportunity to offer “shout-outs” to their colleagues. If an employee gets a shout out, he or she can spin a wheel right there for a prize. Anyone who gets a shout-out is also entered into a drawing at our monthly meeting, when we report our numbers and do a big spin for a much heftier prize.
In addition to these opportunities for peer- and customer-feedback, I personally send out value cards every week to recognize employees who are going above and beyond through actions they are taking.
While I appreciate the opportunity to recognize team members, I believe that long-term success in achieving our vision is the result of bottom-up support. We created these values as a team, and we will only thrive if every member of the team takes daily actions that reflect our shared commitment. I can’t dictate adherence to values. As Jack Stack says, “people support what they help create.”
As we continue to build the business together, our team takes pride in the financial impact of our shared vision. In a flat-line industry that does not show much growth over time, sales in our original stores have increased about 20 percent in the four years since we implemented GGOB, and our EBITDA is up 50 percent. I believe these results reflect all of the daily actions we take, the financial transparency we share, and the vision we strive toward to create a unique experience for our customers. I can’t wait to see where we go from here.
Bob Schwartz is Managing Member and President of SuperSuds.
More Than 80 Years Later, A Company Finds Its 'Why'
Our broadline food distribution company, Nicholas and Company is a third-generation family-owned and operated business headquartered in Salt Lake City, Utah. Founded by my husband’s grandfather, Nicholas Mouskondis, in 1939, the story of our company in many ways reflects a classic immigrant success story. Nicholas came to the U.S. from Crete, Greece with nothing but the clothes on his back. He didn’t speak a word of English. Today, the company he founded is the single largest independent food distribution service in the Intermountain West.
We’re incredibly proud of our founding story and of our current success. But about eight years ago, we were prompted to re-evaluate our mission statement, and we realized that the mission we were sharing, the words we were using to tell our story publicly, no longer reflected who we were.
The catalyst for our revision of the mission was a conversation with a woman we had come to know well as a representative of Best Companies to Work For. We had been honored by the organization repeatedly, and the same representative from the organization would visit us year-after-year to interview our employees and validate survey responses. After about 10 years of these annual visits, she pulled me aside and said, "Look, I've been watching your company grow. I've been personally interviewing you and your employees for the last decade. I've watched the way that you operate. And I just might offer a suggestion: You don't market yourself well. Your mission statement doesn’t say anything about who you are and what you do.”
At the time, our mission, created by my father-in-law, was the acronym P-R-I-D-E: Providing Responsive Innovative Distribution Excellence. “Yeah, it has a nice ring,” she said, “and it’s easy to remember, but it doesn't say who you are. Any distribution company in the world distributing any kind of product could have the same mission. You’re missing the boat because you're pretty special."
At the time, though my father-in-law was no longer running the business, he was still very involved as Chairman of the Board. As I absorbed the feedback, my first thought was, “I'm not touching this with a 10-foot pole. My father-in-law created the mission. It’s his baby; changing it would be sacrilege.”
But the conversation kept gnawing at me. I started researching established, long-lived successful companies, and I found many examples of mission statements that had been revised over the years. When you look at companies that have longevity, a significant factor in their enduring success is their ability to evolve and innovate to continue to grow. In many cases, it’s just good business to revise a mission to accurately reflect the change.
In the case of Nicholas ad Company, I realized, "We're no longer the little family company underneath the viaduct just scraping by. We're a force to be reckoned with, and we need to tell the world that. We need to be proud of that.”
Armed with my research, I took a deep breath and approached my father-in-law. I told him that I didn't want to do anything to disrespect him or his previous work, but that, due to the efforts of now three generations, the business had expanded and evolved, and our mission should reflect that. To my relief, he was incredibly excited. He understood the success that this step signified. By revising the mission, we were putting a stake in the ground to say, "We want this company to go forward. We want to continue to innovate. We are thinking about this long-term."
With my father-in-law’s blessing, we launched an initiative to develop a new, purpose-driven mission statement. We wanted to uncover our “why” and to share it with the world. We sought feedback from stakeholders—team members, customers, suppliers, and community members. We asked: "Tell us what sets us apart. What is it you feel when you do business with or interact with our company?”
We hung huge, five-foot sticky notes all over the break room and common areas in the company, and we asked people to jot down words that they felt described who we are. We asked for input from spouses and kids—we went wide and deep. And what we got, repeatedly, were words like “safety,” “security,” “family,” “caring,” “integrity,” and “honesty.” And what we felt behind those words from our team was a tremendous pride in the organization.
From our customers, we heard many of the same words, and other positive feedback, but often when we asked the question, there would be a pause, and the customer would say something along the lines of, “It’s just different doing business with you. I can’t describe it—it just feels right.”
Over the course of about a year, my husband, Peter, and I, who are co-CEOs, would come home at night and talk about the responses we had received. We were trying to find the through line in what we were hearing and reading, to create a coherent statement that would reflect the words but also the feeling that people told us they experienced when they engaged with our company. It was like trying to name a baby.
Ironically, what we kept coming back to in trying to create a shiny, new statement, was ancient history—a Greek word that took us right back to our founding story. Philotimo, loosely translated to English, basically means “the love of honor”—a sense of nobility and joyful hospitality; the obligation to make things better and to right the wrongs. It’s really an all-encompassing feeling, a way of being.
Peter and I realized that philotimo was the one word that really tells our story. It’s who we are and it's what makes us different—it’s our unique DNA. It captures the “it” that so many people told us was our differentiator but that they couldn’t articulate. With that as our inspiration, we drafted a mission: “Preserving our family recipe for success by securing the dreams of all future generations.” We say that philotimo is the secret ingredient in our recipe. The mission honors our heritage—the family and our story—and it articulates our purpose to steward the company so that we can help others fulfill their dreams, just as Nicholas saw his come true.
Today, our mission statement allows us to articulate who we are as a company, not just what we do. It communicates our “why.” And, it helps us share our Purpose with a new generation of prospective employees who are increasingly seeking out purpose-driven work. As a leader in the company, launching the initiative and seeing it through to the end reaffirmed my personal “why” and gave me a lot of confidence in our ability to continue to move the company forward for generations to come.
Nicole Mouskondis is Co-CEO of Nicholas and Company.
What a New Machine Unleashed Within Our Team
At our Evergreen® company, Kenmore Envelope, we print, cut, and fold envelopes. More specifically, to throw some fancy envelope jargon your way, we make “flat-sheet litho convert envelopes.” It's not a high-growth industry. It’s not sexy. But we get pretty excited about envelopes because we believe deeply in our product, in serving our customer, and, perhaps most important, in helping our people develop into the best versions of themselves.
In our industry—as in so many—providing team members with opportunities to learn and grow means investing in technology and making continual Pragmatic Innovations to drive our team forward. We have seen clearly the impact of this connection between innovation, team, and company growth over the last five years as we have invested in large-scale equipment upgrades.
About five years ago, I recognized that if we wanted Kenmore Envelope to be the market leader, we needed to invest in new technology. At that point, we were operating older envelope equipment that required very talented adjusters with extensive mechanical skill sets. I knew that if we wanted to bring on the next generation of adjusters and other talent, we had to transition into Winkler + Dünnebier (W+D) equipment, which is next-level technology from a folding equipment standpoint.
In my view, it was go-time. If we didn’t make a move to invest in this capability, we wouldn’t survive. At the end of the day, speed wins in our business, and without new equipment and top-tier talent, we wouldn't be able to compete long term.
But making those initial investments required a shift in thinking in our family-owned company. My father-in-law, who was CEO at the time, was worried about the financial risk of investing in new equipment. He felt the company was at a good size, and he didn’t want to take on debt. We had a lot of internal conversations around the decision, and, in the end, we agreed on one new machine as a healthy first step.
In 2015, we bought a W+D 627 folding machine. We put it on the floor, and after three-to-six months, we were hitting numbers that we could only dream of hitting on our older equipment.
That success led my father-in-law to feel comfortable with the purchase of a second machine. When we saw the returns on the second machine, we knew we were at a turning point. The new technology led to significant growth over the next two years, reaffirming the value of the investment and inspiring us to ultimately purchase two more machines. Within a five-year window, we had added five new pieces of W+D equipment, and it transformed our company.
The investment in technology changed our speed and volume, and it changed the talent we could hire and promote. It's a lot easier to hire people when you have new equipment and can say, "Hey, you're going to come in and run this brand-new machine." People want to be part of a winning team. They want to be in part of a culture that is moving forward and to work in a place where they can envision a future.
Not only did the new technology help us recruit new talent, it allowed us to develop and promote existing team members. We could take younger adjusters who maybe weren't quite as mechanically skilled as some of our more veteran guys but were more touchscreen-savvy, and they did really well on the new equipment. The new machines also gave some of our more talented operators who didn’t have the mechanical skill set to be an adjuster on the older equipment the opportunity to level up and operate the new machines. And, many of our older adjusters actually ended up wanting to work on the new equipment as well. Everyone was excited.
The growth in the wake of the purchase of the fifth new machine was explosive. We went from a $13 million shop to a $28 million shop. Bringing in the new folding machines also spurred us to invest in a new printing press because as we added all these pieces of W+D folding equipment, alleviating our constraint in that area of the business, we started to lack capacity on the printing side. We purchased a top-of-the-line Koenig & Bauer press and sent our four pressmen to the factory in Germany to be trained. If we were going to invest in the technology, I wanted to also invest in our people to ensure they were confident and skilled when the equipment hit the floor.
Today, we continue to look at new innovations and opportunities to develop our team. Every investment we're making today is about the future—about speed and attracting the best people. Introducing new technology means opening our talent pool to a new generation of operators and professionals in our industry. It changes who we can recruit and who we can hire and keeps us more relevant.
Looking back on the initial decision to buy that first new piece of equipment, I could not have imagined how it would transform our company. I knew that investing in technology would allow us to be progressive in our market and grow our business, but I didn’t realize how it would change our team’s perception about where the business can go and how we're going to get there.
People walk around with a little bit more pride today. They take care of the equipment a little better. They’ve realized, "Hey, there's a long-term play here. We're all in this together." So, while our leadership team may have made the decision to take that initial investment risk, it’s our people getting behind that decision and embracing the benefit to our customers that has really created this success. It has changed our team’s mindset about what Kenmore can become.
I truly believe that “all ships rise when the tide comes in.” When our people grow, our future grows.
Scott Evans is President and CEO of Kenmore Envelope.
How One Employee's Idea Changed the Way We Do Business
Our family-owned regional retail chain, Blain’s Farm & Fleet, was founded in Janesville, Wisconsin in 1955 by my father and my uncle. Since the beginning, as we’ve grown from one store to 43 stores in four states, we’ve been driven to serve our customers as though each one is a neighbor. That motivation has resulted in many iterations in our service over the years, as we meet and respond to changing needs and shopping behaviors.
Often, these innovations are made in response to suggestions from our associates who work the floors of our stores every day. We value their frontline feedback, and they generally don’t hesitate to share what they’re seeing and hearing for the benefit of our customers. This was the case about six years ago, when a young employee made a request for a Pragmatic Innovation.
As I was doing a construction walkthrough of a brand-new store with a whole team of people—about 20 of us—a new member of our operations team, who had come up through the stores as an associate, made a suggestion. We had just walked through the 125,000 square-foot building from the back, where we generally have a yard space for checking in freight and loading large products into customers’ vehicles, when she spoke up: “Jane, can I make a request?”
The entire team paused and turned toward her, some of the group looking at her a bit askance, wondering what this young employee was going to say. When I asked her to go on, she asked, “Can we put a cash register in the back of the store for the grand-opening weekend?”
When I prompted her to explain, she noted that the large number of people who come through during the store-opening events, which generally take place over a three-day weekend and can bring in 40,000 customers, leads to really long lines at the front registers. “With a register at the back, we could serve customers who purchase larger items right there and move them through more quickly. If we run into any issues with the larger purchases—if there’s damage, or if they decide they want another item right then—we could take care of them on the spot instead of asking them to go back through to the front, stand in line again, and come all the way back around.”
It was brilliant. In fact, I decided that not only were we going to make that happen for the grand opening, but that we would sell out of the back of the store year-round. It seems obvious now, but her voicing the idea was transformational and really just changed my whole way of thinking.
The seed of that idea set in motion a series of iterations and innovations around how we could service our customers through the back side of our store, meeting their needs along an entirely new path. I modified the design of that building—at that point at the end-stage of construction—to include an overhang and drive-through lane. And, over the next year, we implemented that design and new approach to service across all of our stores. In addition to the building modifications, we installed new registers and related technology (including headsets for the workers in the yard, mobile credit card processing technology, and adaptations to our app to facilitate the new process) and retrained our warehouse workers to process sales. Ultimately the decision led to an online ordering process that has become the norm now—order online and pick up in store—but was novel in our space at the time.
While I did experience some push back from team members who were worried that this new option would decrease in-store sales, I felt strongly that our customers would continue to shop in our stores. This was simply a new iteration of our service, a way to remove a barrier and create a new path for engagement. It was a convenience play, and it made sense.
Fast forward to 2020 and the COVID-19 pandemic, and we had been facilitating buying online and picking up in the store for five years. As everyone in retail was scrambling to navigate the new restrictions and continue to serve customers, we leveraged this earlier innovation and then improved upon it.
We implemented a two-hour guarantee for pick-up following online ordering, sent texts when orders were ready, and loaded purchases to customers’ cars and trucks with a no-touch service. As an “essential business,” we were able to serve those customers who weren’t comfortable shopping inside our stores initially and we gained additional market share because we had these systems and processes in place when some of our competitors did not. In addition to continuing to serve our agricultural customers looking for efficiency in buying and loading large items in the back, we attracted new customers who realized they could order smaller household items, PPE, pet food, snacks, and other products from us and conveniently pick them up without leaving their vehicles.
Little did any of us know during that walkthrough in 2016 that the idea raised by our young team member would be the impetus for such company-wide innovation. That suggestion launched wide-scale, permanent change and catapulted our business plan in a completely different direction.
In considering the impact of this change and the way it came about, I’m proud that it reflects our motto: “Our associates are like an extension of our family, and our customers are like our neighbors." We respect and appreciate the experiences and insights of our team members and recognize the vital role they play in interacting with customers every day, and we strive for an open-door policy for all who seek to share their ideas. All of that input is essential as we continue to iterate our service offerings for our customers, who are often literally our neighbors in the communities we serve. We look forward to continuing to listen and learn.
Why Our Company Is Tackling Pay Equity—and How We've Made It Work
In 2003, when my wife, Catherine, and I bought Heath Ceramics, a home goods company founded in Sausalito, California in 1948, we seized on the opportunity to embrace a different approach to business.
As designers, we were of course inspired by the chance to design and produce beautiful products and to be involved in that process from start to finish. But in what was an intentionally contrarian response to the Bay Area’s move toward tech, we also saw it as a unique opportunity to nurture a company that was an anomaly—a privately held manufacturing business with a holistic view of creating timeless products of value. Also core to our decision was the idea of setting an example of running a business not just as a vehicle for making money for its owners but as an organization that serves a purpose in the community by providing jobs and a sense of pride in craftsmanship.
It hasn’t been easy to push against the status quo in the years since. It was tough to compete for workers in 2003, and it’s even harder today, mostly because of how tech jobs pay and how pay for those white-collar office jobs has increased disproportionately through the years compared with pay increases in manufacturing.
To attract the quality team members we want and need to continue to grow Heath, we end up competing on values. Working at Heath means you’re involved in making tangible products with long-lasting value and investing in the community through the creation of manufacturing jobs that are at our core. With the right people, this has a real appeal over working for shareholder value.
While we didn’t set out to change the world, we’re trying to make it better in small, tangible ways that count—to set an alternative example on a small scale. It turns out, this is appealing to the people we have working here as well.
Taking a Leap to Cover the Gap
In the wake of the racial and social justice discourse of the summer of 2020, we saw an opportunity to make change that we felt would reflect our ethos and our aspirations for Heath as an organization committed to prioritizing people and community. As we fielded questions from employees who wanted to know how we were going to respond to the social justice conversation and create change, I engaged our leadership team around potential action and responses. In the course of these meetings, our Finance Director, Roger, brought up the idea of focusing on pay equity and narrowing pay disparity as a potentially impactful response.
Over the last two decades in the Bay Area, pay in white collar office jobs has been increasing at a higher rate than manufacturing and retail jobs (another large employee group we have), so pay disparity has been growing. When we really did the research, we found an 88 percent increase for office jobs versus 65 and 49 percent increases for manufacturing and retail respectively.
In reviewing this and more in-depth analyses of pay disparity in general and in the Bay Area specifically, we felt that one of the most impactful actions we could take toward building more equity and reversing these systemic societal injustices would be in committing to provide a living wage for all Heath employees.
A living wage is defined as one that covers the basic needs of an employee (and sometimes his or her family), including food, housing, healthcare, education, and transportation, as well as some discretionary income. To understand what that meant for our employees, we set about conducting research and connecting with experts. Ultimately, we were able to determine that, in the Bay Area, the living wage is $20.
The premise of committing to a living wage as a response to social and racial injustice is that narrowing pay disparity can help to narrow disparity on many other levels. Socio-economic disparity is a big factor in systemic repression, including racial inequity, affecting access to better housing opportunities, quality education, and access to banking, among many other factors.
Given the appetite for change and action across the organization, we felt the time was right to take action. Our leadership team was immediately energized around this idea; it really spoke to us all clearly through the noise and frustration of this time. This was something that could create meaningful, lasting change for our employees and set an example in our community.
How Do We Pay for It?
Having decided that providing a living wage was really important, the inevitable follow-up question was, "How do we pay for it?"
Tackling this initiative when we did, as the company was still emerging from the impact of the pandemic, made us very aware of the need to find a sound, sustainable financial footing for the plan. It was our Finance Director, again, who pointed us toward what would become our solution.
Roger asked if we might consider rethinking our 401k plan, pointing out the potential inequity in that benefit. For years we’ve been proud of offering the same level of benefits to all our employees, but when we dug into the details of the 401k plan, we found that it did not provide equity for those on the lower end of the pay scale. Our matching program, through which we make employer contributions to match employee contributions, presents a particular problem because if you are on the lower end of the pay scale and can’t afford to put your money into a 401K account, you get nothing, whereas if you are a higher earner who can afford to contribute a lot of your pay into your account, you get free money from the company. It turns out its a benefit that builds disparity on top of existing economic disparity. If you’re looking to create equity, it’s not right.
By replacing our matching program with equal contributions for everyone, based on tenure and regardless of pay level, and taking half of the money we formerly put toward employer matching contributions to fund a large portion of the living wage increase, we were able to raise starting pay from $16 to no less than $20 an hour. The 28 percent of Heath’s employees who at the time earned less were brought up to at least that level.
Next Step: Communicating Change
Having developed what we felt was a workable, equitable plan, I was really concerned with how to roll out the initiative effectively. How could we share the intention, the data, and the details successfully across our broad range of employees? Should we share it with everyone? When and how? What language would be best for which audience?
Having created a dense background document, we had the core information to distribute, but we needed to make it accessible to our diverse team, which ranges from manufacturing workers whose first language is not always English to retail managers to white-collar office employees.
Ultimately, we decided the best approach would be to first share the plan with the leadership team, followed by the managers, through small group discussions, during which we would also share the background whitepaper. Then, we created a more-concise, summary document to share with team members more directly affected by the living wage increase and our people in retail, production, and shipping. We personally met with those groups as well. In each instance when the information was distributed, the document included questions and asked employees to engage and offer feedback.
These small discussions were a powerful tool in our process and helped ensure people really understood our intention and the details. I think the transparency and clear communication were essential. Our head of people, Allison, Roger, and I took the time to sit down with approximately 16 small groups of eight people or less, including every single person in the company. We answered every question.
As we led these small groups, I was struck with the difference in the dynamic of these meetings. So often in my experience leading big meetings, I feel as though I’m talking at people; when I ask for questions, nobody has anything to say. In the small meetings, we saw wonderful, thoughtful voices emerge and great ideas generated from people we had never heard from before.
Of course, it was inevitable that we would experience some friction. We anticipated push back, and we did get some from higher-paid workers who felt their benefit was being diminished and from some who questioned other aspects of the plan. We continue to work through those concerns and have made some modifications.
Lessons to Carry Forward
Overall, this initiative has strengthened our team and has been additive to our culture. We’ve learned and grown together, and I hope we will carry lessons from this experience forward. We already see that this work has had an impact that other efforts—including our ESOP—have not. In my view, that’s because this change will have a more direct, immediate impact on a large number of team members who can benefit from tangible help today. The reality is that while ESOPs and 401ks and similar benefits are created with the best of intentions, some people just need to get paid more today; they just need to get by.
We know we’re not done with this work. We will need to continually strive to reaffirm our position on this front, to work toward alignment across the entire team and ensure the intention behind it remains a firm pillar of our culture. We’ll need to continue to create policies around equity, around pay levels between the highest and lowest, and explain—in clear and accessible language—why those things are important.
It’s our hope that as we continue to learn and grow, we continue to make a difference in a meaningful way for our team and in our community.
Robin Petravic is Owner and Managing Director of Heath Ceramics.
