Family Businesses Find Success Generation to Generation

Member Firms Have Thrived, Survived for Generations

By Charles McChesney

Like superheroes, family businesses have origin stories. Their narratives often involve a single founder who overcomes a lack of money with determination and a steely, near-superhuman work ethic.

But not always. In the welding and gases industry, some companies got their start when an industry veteran was given an opportunity to own his own distributorship. It meant leaving a comfortable position, moving the family someplace far away and working very hard; but it also meant the beginnings of an enterprise that could last for generations.

A number of GAWDA members who are among the numerous multigenerational operations within the welding and gases industry spoke to Welding & Gases Today for this article. They spoke with pride about the founders of their family businesses, some of which go back four generations in their families. Decades later, today’s family-business owners say they draw strength knowing that those who came before them managed a multitude of challenges in order to sustain
businesses that continue to serve the household and business needs in their communities. They also express satisfaction that those businesses continue to involve their families and provide them not only with professional careers and a way to make a living, but also with a great deal of family pride.

It’s also plain, in hearing them relate their experiences, that there is no one way to have a successful family business. While experts lay out processes and guidelines to ensure a family business is run properly and profitably, the family business people we spoke with say they have succeeded by operating in the specific ways that happen to work for them.

Shared Decision Making, Consensus Style

For the Winkle brothers at Weldstar in Aurora, Ill., control of the business is equally split three ways. “Like a lot of us, my dad was a conflict avoider,” Matthew Winkle recalls. Rather than choose a successor, he says, his father’s attitude was, “you boys will fight it out.”

But the brothers haven’t done that. More than six years after John Winkle passed away, his three sons continue to make decisions through consensus. Matthew, Joseph and JB gather twice a year for official meetings. It turns out that they’ve found themselves in agreement on every business question they’ve faced. There have been no two-to-one votes, Matthew Winkle says. In fact, they haven’t needed to vote even once.

Brothers Joseph and Matthew Winkle note that they weren’t always so harmonious. As boys, they and JB used to beat the daylights out of each other, they admit. But as adults running a business, they find themselves in harmony about the right things to do. “We don’t have a lot of conflict,” Joseph Winkle says. “We try to do what’s best for everybody.”

Cavagna Group is a global company with more than a thousand employees in Europe, Asia, South America and Africa, as well as a 25-person operation in North America. Miriam Cavagna, director of marketing and communication, explains that like Weldstar, decisions at the family-owned company are reached by consensus.

Founded in 1949 by Paolo Cavagna and his children, the company has grown through the decades, often through acquisitions. Miriam Cavagna says the company is in a transition phase now, as the founder’s children pass along decision making to the third generation. On a day-to-day basis, only some members of the Cavagna family who work at the company make decisions. “Strategic roles are still in the hands of family members,” she says. The “family council,” made up of shareholders, gathers twice a year. There’s a consistency in running the company based on unwritten family principles that stress reinvesting in the company, Miriam says. “In bad times or crisis, keep investing” is the guidepost.

Arc3 Gases, with regional offices in Dunn, N.C. and in Richmond, Va., is a combination of two family-run companies, one by the Arledge family of North Carolina and the other by the Dillards and the Ellens of Virginia. The merger of equals, as leaders refer to the combination that was completed in 2013, works because the two companies had very similar cultures, they say.

The merger “has been a tremendous amount of work,” says Paul Dillard, regional manager at Arc3. However, because the two companies had such a similar focus, the merger was able to be undertaken, and operations continue, with little conflict. It comes down to, “what is your idea of customer service and taking care of customers?” Dillard asks. “That right there is very similar, if not the same.” Now, the joined management knows, “we’ve got to make a decision for better or worse and move forward, and that’s what we are going to do,” Dillard says.

Deciding Different Paths of Ownership

Nicole Kissler, director of medical reimbursement at Norco, in Boise, Idaho, says control of her family-run company has been closely held for two generations. Her father, Norco CEO James Kissler, is the only member of his generation who
chose a career in the business. Over time, he acquired shares of the company held by his three sisters.

In 2015, James Kissler diverted a bit from a strictly family-operated enterprise. He created an employee stock ownership plan and gave ownership of 35 percent of the company to its 1,200 employees. A trustee represents the employees in
business decisions, Nicole Kissler explains. She and her two younger sisters now own 33 percent of the company.

Brian Dawes, president and owner at James C. Dawes Company in Martins Ferry, Ohio, was 22 when his father died suddenly. He found himself running a family business that his
grandfather had started and that still bears his grandfather’s name.

At that time, he recounts, some employees left the two branch distributorship, lacking confidence in his ability to lead the company forward. The family was left with another challenge: he owned just a fraction of the shares of the company,
and his mother owned the rest. The mother and son found they had different ideas about what needed to be done to continue operations.

Specifically, they disagreed about the issue of buying cylinders. For two generations, the company had rented cylinders and then leased them out. He remembers being told how his father “didn’t want to own all that iron.” But Dawes saw the
company passing along all its revenues, and wanted to bring that system to an end. So, he went behind his mother’s back and ordered cylinders without authorization.

“She almost fired me,” he recalls decades later. Since his mother kept the company’s books, though, it didn’t take long for her to see the wisdom in the change. When his mother passed away, Dawes bought the remaining shares from the estate, giving him sole control of the business.

WestAirGases & Equipment, the San Diego-headquartered distributor, is owned by the Castiglione family. Andy Castiglione is director of marketing and ecommerce, and the third generation in the family business. He shares his name with his
grandfather, the company founder.

The family has been fortunate in that successions have so far been fairly straightforward, Castiglione says. His father, Steve Castiglione, has a sister who was not interested in working in the business. Andy and his brother Christopher have a sister who likewise is not involved in business operations.

Join the Family Business, or Take a Different Path?

Joshua Haun was teaching special-education students at a middle school in North Carolina, far from his hometown of Syracuse, N.Y., and several states’ distance from the family-owned Haun Welding Supply, Inc., when he and his wife found out they had another child on the way. Concurrently, a role became open at Haun that would permit him to return to the family business. It was a bit of good fortune that meant his wife would be able to stay home with the children.

Joshua came back. Seven years later, he still works with his father, Mark Haun, and his brothers, Kyle and Erich Haun. Three of them work from the Syracuse headquarters, while Erich works in the eastern center, about a two-hour drive away.

Mark Haun, the third generation in the company, never made a conscious decision to join the family business; it seems it was in his blood and his brain all along. “All I ever wanted to do was be like my father in business and own it someday,” he says.

Randy Squibb was the third generation of his family to run Welders Supply in Dallas, Texas. He and his brother worked together there for years, but he says, “we were never pushed into it.”

That wasn’t the case for his father, Charles “Charlie” Squibb. When Charlie Squibb told his father, Carl Squibb, he might have different plans for his life, the elder Squibb exclaimed, “what do you mean don’t want to come into the business? I’m building this for you.”

Matt Winkle had a career going in a large corporation after graduating from Michigan State University with a degree in materials logistics management. But during a visit home, his brothers bluntly told him he was missing out on a better opportunity at Weldstar. “My brothers talked me into coming back to the family business,” he says.

Walter “Wally” Brant, CEO of Indiana Oxygen in Indianapolis, Ind., shared how his father, Robert “Bob” Brant, “literally grew up in the business.” Because Bob’s mother died during the birthing process, Bob often ended up going to work with his dad.

Despite that environment, Wally Brant says with some embarrassment that, when it came his time to choose a career path, he thought the family business wasn’t good enough for him. Instead, he had planned on going to law school. After a detour into the Air Force, Wally faced a decision. He was stationed in Guam when his father called him long-distance to report that he’d had a good offer for the company. He told his son that he would sell — unless Wally wanted to return to the family business. Wally took leave, flew home and within days was ready to help his father keep the company going.

When it came to running the family business, FIBA President John “Jack” Finn believes, “I was destined for it.” The eldest of five, he went to school expecting to be the second generation to run the company, a manufacturer with roots in the gas distribution business.

“When I started out of college, we had 30-40 employees, today we have more than 300,” he says. After graduating from Northeastern University with a degree in business finance, Jack worked at the company as a cost analyst and quickly moved on to manufacturing production. His arrival at FIBA coincided closely with the death of Al Bamford, his father’s business partner. Bamford was focused on operations, while Jack’s father, Frank Finn, managed sales and business development. “Before long, I took over the day-to-day affairs. We were a small company then,” Jack Finn recalls.

Evan D. Bennear worked at his family’s business, Dale Oxygen, in Johnstown, Pa., as a teen-ager. “Each year I learned more and more about it, worked in different departments and grew a genuine interest for it,” he recalls.

But during college, Evan did internships at other places, “high-end technical companies.” He also worked for one of them for two-and-half years following graduation. “These experiences just reaffirmed how much interest I really did
have in the family business,” he says. “It was reassuring. I eventually left employment in Pittsburgh, moved home and rejoined my dad and brother.”

Cylinder Painting and Other Leadership Preparation

No report on family-owned GAWDA-member businesses would be complete without noting that many of those who are running their family’s operations today got their start in the industry painting cylinders. Time and again, members proudly report how they started at the base level, often as youths. Still, they enjoyed going to work because it gave them a chance to spend time with their family and create memories, they report.

Christopher Aldredge, vice president of business development at Arc3, tells a family narrative about his grandfather and father. Emmett Aldredge was pleased with the work the teen-aged Emmett Jr. was doing painting cylinders. The elder Emmett told him so, then announced that he was promoting Emmett Jr. to vice president in charge of cylinder painting. “It didn’t take long before my father realized his job responsibilities hadn’t changed much, and neither had his pay,” Christopher Aldredge recalls with humor.

Preparing the next generation for leadership is a process that varies widely among GAWDA member companies. For some, tragedy thrusts them into a leadership role. For others, there is a path laid out to get them ready for what may be their future.

Nicole Kissler has spent years preparing for her role at Norco. She studied business administration at Oregon State University. She worked more than four years as part of an executive team at Target stores in Washington state. She worked for another welding and gases business, Central Welding Supply, for two years before returning to Norco in 2014.

The route was planned, she says, and the goal of working in the family business was something she long desired. “I knew since I was 4 years old,” she states. Nicole remembers the first work she did at her family’s company, cleaning the
microwave in the break room. (Payment was a bag of Cheetos from the vending machine.) Other times in her youth, “I practiced signing checks and that sort of thing, even pretended answering the phone. I thought that’s what my dad did,” she remembers.

Formalizing Qualifications and Establishing Roles

At Cavagna, the business role for future family members recently has been codified. “Last year, each family member signed a family employment policy, a document that addresses how to include members of the third generation in the business, establishing guidelines for all and prerequisite qualifications,” says Miriam Cavagna. If family members qualify to join the company, they are assigned mentors, another family member plus someone working within the organization who helps them understand their role and guides their way, she says.

Andy and Chris Castiglione joined WestAir in different ways. Chris Castiglione affiliated with the business right out of high school. Andy Castiglione earned a degree in regional development at the University of Arizona, then pursued a real
estate development career before deciding to join WestAir.

In the years since, the family has adopted new rules requiring the next generation to meet certain qualifications in order to work at the family business, Andy Castiglione says.

“My sons are better educated and smarter than me,” says Jack Finn. The sons, John Finn Jr. and Chris Finn, have key roles in the company, Jack Finn notes, “one in sales and one in operations.”

Specialization in company roles is a common theme when new members join the family business.

At Haun, the three sons of current President Mark Haun all have distinct roles in the company. Kyle Haun, service manager, has been in the department for years. He was mentored by the previous service manager. Joshua Haun, director of operations and marketing, recognized early on that he had a propensity for certain areas and that he was “more of a corporate guy, for marketing, I.T. and operations.” Youngest brother, Erich Haun runs the company’s eastern territory from Albany, N.Y. The territory reaches into neighboring Vermont.

“The three of them have specific talents and abilities that fit well into the company’s needs,” Mark Haun observes. “I kind of watch the puzzle pieces fall together.” Because of his sons’ diversity of abilities, Mark Haun has been able to delegate many of the tasks that had been all his since his father appointed him president in the 1980s, he says. Having those skills at hand means that, “I don’t run anything on a daily basis,” he reports.

Similarly, the Winkle brothers have self-defined roles. Stressing that the three brothers reach consensus on important matters, Matt Winkle says, “JB has strength in personal relationships and gets involved in sales, operational and branch-level strategies. Joe focuses on financial, administrative, legal and other high-level matters.”

Joe Winkle says Matt Winkle has become “the more analytical of the three of us.” That means Matt focuses on studies regarding everything from the cost of shipping a cylinder to the cost of servicing individual customers, Joe says. “We concentrate where our natural strengths lead us,” observes Matt Winkle.

Communicating Like Business Associates

Given the dynamics inherent in families, and how those can have a tendency to run over into the family-operated business, communication is an essential issue for family-operated companies.

Matt Winkle says he and his brothers have a strictly-business call about once each month. Plus, he and Joe Winkle have places on a lake near each other where they and their children spend time together. Nevertheless, “Like a lot of family businesses, we don’t talk a lot,” Matt observes.

Other companies have formal business meetings where family members who are shareholders gather to discuss the business. For some, the meetings are a chance to do more than review the latest quarterly reports and sales projections.

The Cavagna Family Council meetings run for an afternoon, notes Miriam Cavagna. The occasion presents an opportunity for the family members to be involved in financial and business discussions. They also dedicate a portion of the meeting to some cultural and historical grounding, allotting time for the founding generation, the children of Paolo Cavagna, to speak. “They always take time to talk about the company’s origins and our unwritten principles,” she says.

Norco has quarterly meetings where financials are discussed. These have become more important since the company created the ESOP, Nicole Kissler suggests. Additionally, the Kisslers brought in a family business consultant to help them formalize family-business communication. In June, the family members met with the consultant in Sunriver, Ore., to discuss the company and the family vision. Participants included Jim Kissler, his daughters and their significant others.
It was a wide-ranging discussion that Nicole Kissler expects will be repeated.

The Castigliones also are using a family-business consultant to help them communicate and plan for a growing family and the eventuality of expanded involvement in the family business. They have been working with the consultant twice a year during the past three years. As a result, the family business has created a family creed, a buy-sell agreement for ownership in the business and employment guidance for family members. The decision to bring in professional guidance was made by Andy Castiglione’s father, he notes. It was part of his father’s overarching plan to grow the business significantly, from one that was in the $35 million range, to one that is targeted to reach annual sales of $100 million, Andy reports.

A Blessed Situation, But One with Inherent Issues and Pressures

While outsiders may see family members who have the chance to be involved in a family business as particularly blessed, there can be pressure and worry tied to working at a place with your name on the front door.

Nicole Kissler vividly recalls an incident that occurred when she was working at Central Welding, a welding and gases business, but not one owned by her family. She happened to observe a job applicant coming in for an interview. She immediately recognized that the person was related to one of the top officials in the company. She reacted as many might: with the fleeting thought, “she only got this job interview because of who her dad is.”

Then, Nicole was hit by a revelation. “For that fifteen seconds, how I felt about her is exactly how everyone feels about me,” she recalls. That incident gave her great insight, and now, “I just try to keep that in mind with every initial interaction, so I never take that for granted,” she says. (And, as it turns out, she and the woman who was interviewing are now best friends.)

The special status of family in a family business can be isolating as well, notes Randy Squibb. When his brother decided government regulations were taking the fun out of the business, he quit. His brother’s departure left Randy Squibb
alone in running the business. “It’s lonely at the top,” he reports feeling.

Is This the Right Choice?

For others, there is a sense of anxiety about whether joining the family business is the right choice. Everyone has days when they question their career choice, many interviewed for this article say, even if they believe deeply in the business.
However, for some, those doubts may persist.

Christopher Aldredge says he could not be happier than he is working in his family business. But he does remember some moments in a younger age when he had doubts. As he has matured, he is more certain he made the right choice, however.

He offers a bit of advice to the unsure. “It probably would be beneficial for someone who had significant questions about their life’s purpose or their life’s work to pursue work outside the family business for a year or a couple of years,” he advises. “It’ll either reaffirm that those doubts were valid and they need to go in another direction, or it will open their eyes to the real world for a little bit and make them appreciate the opportunity back on the homefront.”

Those taking up a business run by grandparents and parents sometimes labor under another concern that might sensitively be called the “third-generation curse.” The saying, “shirtsleeves to shirtsleeves in three generations,” reflects the idea that a founding generation is followed by a building generation and then, as Arc3’s Dillard puts it, “the third generation usually screws it up.”

While that potential may weigh on some, Craig E. Aronoff, co-founder and primary consultant with the Family Business Consulting Group, notes that the statistics on the issue may be misleadingly pessimistic. Family businesses have a longer
average lifespan than non-family businesses, he reports. Besides, “most of the time the statistics don’t make any difference,” Aronoff says. “Family businesses work against the odds all the time.”

Ultimate Advantage: Stewardship for the Generations

Asked how their family business succeeds generation after generation, many GAWDA member business executives cite the business’s commitment to treat customers well. “It comes down to the way that we service,” says Andy Castiglione, in
words nearly identical to those used by others.

That commitment to customers is mirrored by a commitment to provide a living to employees. “That motivates us to grow and get bigger,” says Nicole Kissler.

“I guess we each feel an obligation to improve the business,” says Miriam Cavagna. “It doesn’t matter what our titles are. If your name is Cavagna, you give just a little bit more.” For some, the commitment to a family business rises to stewardship. They feel they have been entrusted with an enterprise that reflects generations of family members, and they feel a sense of duty to its success and continuance. “Stewardship” is a word Dillard and Christopher Aldredge bring up separately when they discuss Arc3 and why they have faith in the merger that created the company.

“Dad often used to talk about stewardship,” Christopher Aldredge says. In fact, his father never felt the business was his, he said. Instead, he thought of it as belonging to his father and those employees who rallied to his side when his father
died suddenly. That attitude has been a powerful theme in Emmett Aldredge Jr.’s life and has helped him get through tough times, he observes.

For Nicole Kissler, the legacy of her family’s generations is carried on through the ESOP that has made Norco’s employees part owners. It’s also carried out through the Kissler Family Foundation, a charitable foundation set up by the company leaders for charitable works.

When It’s Time to Loosen the Reins: How Families Make That Happen

The dedication to a family business and a commitment to its ongoing success also can make it difficult for one generation to cede control to the next. Some never hand off, but many fi nd that showing up for work less often is a help. Mark Haun’s father, Ken Haun, spent more and more time in Florida, allowing son Mark to take on more and more of the decision making. Mark Haun is doing the same thing now, and sometimes declines to intervene in business decisions, even if he is right in his office.

“I’ll come to him for some things,” says Kyle Haun, “and he’ll say, ‘I’m not going to advise you. Get other people involved.’”

Wally Brant says his grandfather hung onto the company until he was 87 years old. “We kind of skipped by dad’s generation” for that reason, he suggests. In contrast, Wally’s father handed the reins of the company to him after just eight years. “We got along really well, but occasionally would dig in our heels over an issue if we disagreed. Finally, he said to me, ‘Fine, do it your way.’ He was really willing to put the company in the hands of the next generation.”

After his brother announced he was leaving the business, Randy Squibb found himself wondering what to do next. A former president of GAWDA and the son of a former GAWDA president as well, he considered the legacy of his family business, talked with his father and decided to look into selling the company in the late 1990s.

At the time, his father owned 10 percent of the company. Randy Squibb went to see him to discuss the offer he’d been made. Charlie Squibb thought the offer was good, but not great. Then Randy Squibb explained that the number he had
shown his father wasn’t the whole offer, but just what his father would receive for his own 10 percent of the company. Upon understanding the numbers, the elder Squibb told Randy to get on the phone and tell the buyer he was accepting the offer “before they change their minds.”

In the 1990s, Brian Dawes and daughter posed for a photo in matching James C. Dawes Company T-shirts on the way to what was then called Take Our Daughters to Work Day. Two decades later, they took the picture again. The difference, Dawes says, is that this time, his daughter, now Rebecca Kinsey, drove herself to work.

After the younger Dawes went to college to become a teacher, she found herself helping out at the business when another employee fell ill. She continues to work there as office manager in the Cadiz, Ohio, branch. She enjoys the work, finding it less stressful than taking charge of a class full of elementary school students. Nevertheless, she says, she doesn’t have the knowledge or the interest to carry the family business into the next generation. She notes that fellow employees can answer complex questions about welding, the kind of things that would take her decades to learn. Kinsey says she’s talked to her father about succession, and her message to him is clear: “When you are ready to retire, if you want to sell, you go right ahead,” she notes.

“If he really wanted me to, I’d give it a shot,” Kinsey adds. “But I’m not sure how successful I’d be. I’d rather see the business go out on a high note as being successful than have me take it over and drive it into the ground.”

Keeping the Family Firm Going, and Growing

For others, there is no question that they want to keep the business going, and growing. “If you’re not growing your business, some people say, you’re dying,” Christopher Aldredge says. The merger of Arcet Equipment and Machine & Welding Supply Co. that created Arc3 Gases was an effort to ensure that, he says. Dillard agrees, saying “we relish our history but I look forward to the future even more.”

Mark Haun, who has grown the business from three branches when he became president, to 19 locations today, says he thinks about retiring, “but I never get past the thinking stage.” Prompted by his sons, he recalls a time when he was grousing about some work matter at the dinner table and his wife asked why he didn’t just sell the place. “Don’t ever say that again,” he replied — in a tone of finality that he and his sons recall nearly three decades later. “We’re not here
for the money,” he says. “If we were, we’d sell the place today and we’d all be pretty well off.”

Looking to what comes next, Miriam Cavagna says, “I think we’re on the right path and with strong corporate governance, rules, policies and structures in place, and some ‘cultural norms,’ we might be able to succeed. Of course, having a successful business will help a lot.”

When he looks to the future for Arc3, Dillard sees it involving the children of family members and the children of current employees. He expects that 20 years in the future, he’ll still be at his desk experiencing the same frustrations and pleasures that working in the family business gives him every day. And just like now, he says, “I’ll go home with a smile on my face.”