Family businesses often run dry of entrepreneurial nouse. Indeed, it’s probably the biggest reason why they fail. To try to compensate for this, they often spend a lot of time and effort on trying to ensure the next generation is driven by the same entrepreneurial spirit as the proceeding generation. Of course, these efforts often fail. Nevertheless, family businesses have one thing going for them when it comes to entrepreneurship - time. Those that have reinvented themselves often cite the ability to pursue a long-term strategy as one of the main reasons behind their successful adaptation.
Here’s five family businesses that have reinvented themselves, which is testament to the entrepreneurial skills of later generations.
Bibby Line Group
The 200-plus years old Liverpool business is best known for its exploits in global shipping, but today makes most of its money from other sectors. That’s down to the entrepreneurial talents of the 5th and 6th generation that moved the business into a whole host of other sectors to perpetuate its success. Sixth generation Michael Bibby, the current managing director, says the current business is now a “mini-conglomerate”. Building on the diversification efforts of his father, under Michael’s leadership Bibby has bought a supermarket chain, expanded into financial services and moved into construction. As Michael once said: “My priority is to make sure there is a sound and growing business for the seventh generation to take over.” It would appear that how revenues are generated is of secondary importance.
The Marseille-based family business has shown an incredible ability to adapt to changing times by seeking out opportunities to grow the business in new sectors. More than 150 years old, Daher is now led by the fourth generation Patrick Daher, who, shortly after becoming CEO in the early 1990s, decided to change the model of the company by selecting those sectors where the European economy was very strong at the time - nuclear and aviation. Consequently, Daher moved to being a service company to a manufacturing one. Interviewed last year, Patrick said the transition wouldn’t have been possible without being a privately-controlled family business. “You don’t have to explain to independent shareholders that your next quarter isn’t going to be very good. This is patience capital working at its best.”
Starting out in the late 19th century as a maker of cast iron and steel implements, Kohler moved into making sanitaryware and today increasingly makes its money from the manufacturing of power generators, as well as hospitality and real estate. A living testament of the the third generation’s entrepreneurial savviness, Herbert Kohler Jr. successfully moved the business into the hospitality sector, despite opposition from board members. An avid player and fan of golf, Herbert built courses in his home state Wisconsin, including the famous Whistling Straits course that recently hosted the PGA Championship. He also build a five star hotel alongside the Old Course in St Andrews, Scotland. Although sanitaryware still comprises a considerable amount to the bottom line at Kohler, Herbert’s efforts to diversify revenue streams have underpinned the success of the business today. Recently stepping down as CEO and appointing his son David as the new boss, Herbert’s influence will remain at Kohler for some years yet in his post as chairman.
Today famous for its entertainment console, Nintendo was in fact founded as a playing card company in 1889 by Fusajiro Yamauchi. But it was the third generation led by Hiroshi that transformed Nintendo into one of the world’s most successful gaming companies. Hiroshi, one of Japan’s most revered entrepreneurs, tried lots of things before striking it rich with the Nintendo console and the famous “Super Mario Bros” game, including a taxi company, instant rice and toys. Hiroshi died in 2013, but his legacy of reviving a struggling company lives on at Nintendo.
The Paris investment group evolved out of a family-controlled steel business and today is one of the most respected investment offices in France. However, it wasn’t the sale of the core business that saw the creation of Wendel, but rather the nationalization of the steel industry that saw the family business morph into the investment firm Wendel. As family member Ernest-Antoine Seilliere, the person responsible for much of Wendel’s success, once said, Wendel came out of a liquidity event that resulted in no liquidity. Seilliere retired some years ago and Wendel is now under stewardship of family member François de Wendel and non-family CEO Frédéric Lemoine. Wendel’s investment strategy is very much direct purchases of stakes in business. One of its early success stories was buying a stake in French management consultancy Capgemini.
Known today as a hugely successful IT services business, Wipro started life in 1945 as a manufacturer and seller of vegetable oil. Typical of many successful Indian family businesses, Wipro soon diversified into consumer goods. But it was under the second generation leadership of Azim Premji, who took over the company in 1966, that Wipro’s reinvention really began in earnest. He went about transforming the company into one of the world’s biggest and most successful IT services companies.