In 2002, Jim, Fred, JoAnn and Susan attended a gathering run by the Aspen Family Business Group, where members from about a dozen families came together to share their experiences in family business succession. “After the gathering, we were so high,” Susan recalls. “I came away knowing that we weren’t alone; a lot of people face the same problems. We came away with a plan to take a next step, and began to involve the third generation by holding a family meeting.”

Members of several of the family’s branches did not know each other very well, so they decided to convene a family council to bring together the members of the first (Bob and his wife), second (the four siblings and their spouses) and third generations (a dozen young adults and a few spouses) to share information and explore these issues.

The family discussed its history, heard presentations about their business’s current structure and operations and had the opportunity to field many questions. They reminisced and shared memories, making them aware of their common heritage and love of the land. “People learned about the business and they got involved,” Susan says. “Now when decisions are made, everyone has a voice, whether or not that view is taken by the others.”

The family made several important decisions at that meeting. First, because ownership was already in the process of being passed to the third generation, that group wanted representation on the board that governed the businesses. It elected one representative from the third-generation cousins, and one from the third-generation spouses. It also decided that the board would establish a holding company to oversee the operating company’s strategy and approve major decisions, and to hold an annual gathering.

Over the course of that year, the council met monthly and made some important decisions. It created a charter to govern the operations of the board, and its relation to each individual business unit. It elected Paul Kelly, JoAnn’s son-in-law, to act as the chairman. Instead of operating individually, each unit (the vineyards, winery and real estate entities) would begin to report to the board at each meeting. Until then, the various business units acted on their own, without family oversight, which led to growing costs and dampened profits. The council therefore developed strategic and financial plans for each business entity.

It decided that its new winery needed an executive who was a seasoned marketer, and hired someone to help the fledgling operation become profitable. He had previously helped other family wineries, and agreed to stay on for about seven years, with the expectation that he would mentor the third generation into leadership. The council members also discussed how to involve the third-generation cousins as they emerged from school and honed business skills.

A year later, the family held a second retreat and examined how it was managing the shift between generations. While many of its initiatives strengthened the governance and operations of the businesses, its most important contribution was to foster a feeling of opportunity and connection among the third generation, and to clarify what they needed to do to become involved with the business. Since that time, Susan’s daughter, Kelly, a 30-year-old sommelier, has joined the staff of the winery. She is considering a career there, one that will begin to etch the third generation’s mark into the family legacy.

Illustrations by Jonathan Barkat.

Additional Information
Capital and Control
Learning Curve

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