Firms Get Family Business Awards

September 24, 2004
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GRAND RAPIDS — A pair of second-generation businesses that are very familiar to West Michigan residents are the recipients of this year’s Family Owned Business of the Year awards.

The Grand Rapids Area Chamber of Commerce honored Alticor Inc. and Nicholas Plastics Group as part of the 2004 Family Owned Business Forum last Wednesday at the Amway Grand Plaza Hotel.

The Nicholas Plastics Group was founded 26 years ago by James Nicholas and is today run by his son Terry, now president and CEO. Nicholas Plastics specializes in profile extrusions and N-K Manufacturing Inc. is a producer of injection molding components for automotive, appliance and office furniture industries.

“My father came here from Greece after World War II with many hopes and dreams,” Nicholas said. “He left behind family and friends in hopes of starting a new and better life in pursuit of the American dream. When he started the business in the 1950s, he established a culture that valued a commitment to family, the community and the business.

“It is my challenge to take his business to the next level,” Nicholas added. “It is quite an honor to be acknowledged as a family business — this country was made great by businesses just like mine.”

A nominee several times but never before a winner; Alticor was founded in 1959 as Amway Corp. by Jay Van Andel and Richard DeVos. It has 11,000 employees worldwide and is parent company to Amway, Quixtar Inc. and Access Business Group Inc.

This month marks the 10th anniversary of the founding partners’ decision to hand over management responsibilities, with chairman Steve Van Andel and president Doug DeVos now leading the firm.

“My father retired at that time from management and moved into governance,” Steve Van Andel said. “We weren’t sure what the difference was at first. It took awhile for him to exit. We tried to figure out ways to get him involved in other things, and there was this boat the company had that he really liked. We figured if we gave him that, it would occupy him.”

Van Andel explained that family business is especially meaningful for Alticor, as the company was founded on the basis of providing opportunities for others to start their own family businesses.

“This is truly humbling and we’re very proud to be able to receive this award,” Van Andel said. “What (Terry Nicholas) said reminded me of the values my father had when forming this company. We’ve continued that commitment to the entire West Michigan community. It’s a commitment you can see when you drive down the streets of Grand Rapids.”

Van Andel added that it is an especially exciting time for Alticor, as he believes that this will prove to be Alticor’s most successful year in 45 years.

Other finalists this year included Noto’s Restaurant, Falcon Printing, ITS Communication and School Zone Publishing. The nominees were judged on the company’s business success, strategic planning for development, governance, succession planning and community involvement.

Famed baked bean pitchman Jay Bush of Bush Brothers and Co. delivered the forum’s keynote address, “Ten Ways to Know You’re a Family-Owned Business,” a message focused on how best to balance the responsibilities of family and business.

“The family and business are two completely different institutions,” Bush explained. “They both have a completely different set of priorities. One can’t do another.”

For instance, as Bush said, mowing Aunt Tillie’s lawn should not appear on a to-do list for an employee.

Situations such as this helped prompt a reorganization of Bush Brothers in the early ’90s. An examination of the company at that time revealed that there were no less than 67 different family members with a stake in the company, each raised with the belief that the company was rightfully theirs.

Through the formation of a family council, Bush Brothers began work to limit some of the family’s influence on the company, a difficult but necessary process.

“Keep in mind that we’re from Tennessee,” Bush explained. “We honestly heard people say things like, ‘Why do I have to wear shoes at work?’ and ‘This is the only place I can work where I can make a one o’ clock tee-time,’ and my favorite, ‘Sure it was sexual, but I wouldn’t call it harassment.’

“We worked our way through problems that could have been on Jerry Springer, all the way to estate planning and finally developing a meaningful succession plan.”

It was quickly realized that the long-term survival of the company would be found in its ability to seamlessly pass along leadership and its ability to attract talent from outside of the family.

“You want to make sure you have the best family members working for the company,” Bush said. “But you also want to work to attract the best non-family talent as well.”

As a succession plan was being written, the vegetable market began to change. The “new guard” realized that their diverse product line could not compete with those offered by much larger producers like Del Monte and Green Giant. They believed that the company’s survival would be found in creating a powerful and recognizable brand around their core product, baked beans.

Many others disagreed.

This was only one of many arguments between ruling family members, even after the weeding out of the less qualified Bush descendants.

A board of directors was established to not only solve these problems, but to prevent other threats to the company in generations to come.

“That saved our company in the ’90s,” Bush said. “It would give us a guidance and direction that would help the company survive through the generations.”

One of the most important responsibilities of the board became succession of leadership.

“These are decisions that are hard to make as both a father and a business leader,” Bush said. “This is about the future success of your company. You have to choose leadership based on qualifications, not on birthright or birth order or favorites.”

In 1992, Bush Brothers launched an extensive marketing and advertising campaign to promote its brand. At that time, the company sold 6 million cases of baked beans annually. Since then, the Bush Brothers brand has grown recognizable enough to give the company some leverage over its customers, as huge companies like Wal-Mart and Meijer discovered a need to have the brand represented on their shelves.

In 2004, Bush Brothers held an 85 percent market share and sold 22 million cases of baked beans.

Founded in 1906 by A.J. Bush as a tomato cannery, Bush is in its third generation of family leadership. Jim Ehier, Jay Bush’s uncle, became CEO and chairman in 2003. Jay Bush, fourth generation, is a plant manager and has served as spokesperson along with his talking dog Duke (no relation) since 1992.

Bush’s presentation fit well into the theme of the program, “The World Through a Trifocal Lens: Owner, Manager, Family Member.”    

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