The Third Most Exclusive Club in the World
The amazing, unbelievable story of the Henokiens
IN THE NEWS
NEW YORK -- Rupert Murdoch is becoming publisher of the New York Post, replacing his 33-year-old son Lachlan, who abruptly resigned last week.
Aug. 1, 2005
The bitter battle has all the hallmarks of a classic family drama. It pits the toddler children of Mr. Murdoch and Ms. Deng, a Chinese-born woman in her mid-30s, against Mr. Murdoch's children from his first two marriages. One of the key debates: Who should inherit the family's $6 billion fortune and Mr. Murdoch's control of News Corp.? Should it be just the media titan's adult children, as is now the arrangement, or also his two youngest children by Ms. Deng?
--Martin Peers, Julia Angwin and John Lippman
"At News Corp., a Bitter Battle over Inheritance Splits Family"
The Wall Street Journal, Aug.1, 2005
Lachlan Murdoch's sudden decision to tell his father to "take this job and shove it" is the latest in a seeming blitz of stories about family-controlled companies that are coming apart at the seams.
A nasty family feud among Chicago's richest family, the secretive Pritzkers--owners of the Hyatt hotel chain, cruise ships and tobacco interests worth $15 billion--erupted when two children claimed their trust fund had been looted.
Sumner Redstone, owner of 71 percent of Viacom, has just outed his daughter Shari, saying he believes in professional management.
In France, the Taittinger family agreed to sell its 70-year-old champagne and hotel business to Barry Sternlicht's Starwood Capital Group LLC.
Think of it; after 70 years a family busines comes apart.
In the world of the Henokiens, 70 years is peanuts.
How about 700 years?
I disagree, sir. I've used a Beretta for ten years--I've never missed with it yet!
"Dr. No," 1963
When President John F. Kennedy told a reporter that he was reading "From Russia With Love," the spy novels of Ian Fleming took off like a rocket. Young Bond wannabes sidled up to bars all over the world and ordered a "vodka martini, very cold, shaken not stirred, served straight up." Straightdope.com surmised, "James Bond has probably created more martini drinkers than all the gin joints in the world."
Bond's Beretta .25 automatic pistol also took on mythic status among firearms cognoscenti.
It is a terrific weapon. After all, Beretta has been making guns since 1526, so it should know what it is doing.
What is remarkable about Beretta is that it is not only a family-owned business, but has been in the same family since its founding nearly 500 years ago.
Beretta is one of the Henokiens.
Probably the most exclusive club in the world is made up of ex-presidents of the United States. At present, its membership is down to four--Ford, Carter, Bush 41 and Clinton.
My friend of 50 years, Floor Kist, was a member of what must be the second most exclusive club in the world--the eight men who run the palaces of the crowned heads of Europe. Kist worked his way up the Dutch diplomatic corps and recently retired with the splendid title of Grand Master of the Household of Her Majesty the Queen. He ran the show for Queen Beatrix at home and honchoed all her foreign travel. From Kist's Aug.5 e-mail to me:
The Grandmasters of the Courts of Europe have decided to meet even once a year, every year in a different capital.
The countries are: Sweden, Norway, Danmark, The Netherlands, Belgium, Luxemburg (the family of the Grand-Duke is considered a Royal Family), Great Britain and Spain.
Notes are compared every time. Maybe now they have even dared to embark on the question what the integration of Europe is going to do to the Royal Heads of State of the participating countries (the answer to this one is probably that the Royal Houses will be here for a long time to come). Why? Integration is slowing, the states are not likely to melt together and even if integration were more successful, would probably lead to more need of expressing the various national identities, which is exactly what Royal Houses do.
I have to believe the third most exclusive club is called the Henokiens--an association of family-owned businesses with 33 members in 2005. It has four requirements for membership:
* The company is managed by a descendant of the founder.
* The family still owns the company or is the majority shareholder.
* It must be in good financial health.
* The company has reached a minimum age of 200 years [sic!].
Where most family businesses seldom make it past three generations, you have to shake your head in wonderment at the achievement of the Henokiens.
The youngest member of the organization is Crespi, cotton and linen manufacturers in Ghemme, Italy, founded in 1797. These are toddlers in comparison to the Maurano glass makers of Barovier & Tosso, who have been around since 982, and the Hoshi Hotel in Ishikawa, Japan, which first opened its doors in 717.
Yep, they are still all in the family!
Henokiens are found in Italy (13), France (10), Germany (4), Japan (3), Holland (1), Spain (1) and Northern Ireland (1).
Apparently some American companies that fit the criteria have been identified, but have not sought admission to this elite organization.
For example, on Dec. 31, 2002, was Eric Pace's New York Times obituary of Armand Zildjian, 81, whose family company has been making cymbals in Massachusetts since 1623.
Extraordinary Corporate Culture
* Over the centures, how in the world did these families deal with quirky family members who wanted to cash out or who made made trouble or who were just plain untalented dolts or drunks or gamblers or who wanted nothing to do with the business?
* They had to continually change their business model to keep up with the times. Some, such as the vintners, did not have to make radical changes over the years. On the other hand, Viellard Migenon & Cie of France started out as iron mongers in the 17th century and morphed into making fish hooks and chains. According to the Henokiens Web site: "Today the products manufactured range from refracting steel screws for airplane engines, titanium rivets to vanadium fish hooks, cosmetics packaging and specific welding products."
* One bad actor across the years can bring a fine, old and respected company to its knees. In 1995, the 233-year-old investment bank that had helped finance the Napoleonic wars, Barings Plc, went broke when a rogue trader in Singapore named Nick Leeson lost £1 billion.
* The Henokiens are diverse--vintners; distillers; a cooper; a confectioner; a publisher; a paper maker; wool, yarn and linen manufacturers; trading companies; a hotelier; a firearms maker; and manufacturers of industrial parts for aerospace and steel.
* The Henokiens Web site is not about a business model; rather, it is about the most successful succession model the world has ever seen.
* These remarkable families not only wrestled with creating and marketing products but also with the philosophy and rules of succession. They must have come to the same conclusions and rules completely independently. After all, this was long before business management became a pop quasi-science promulgated by Peter Drucker, Tom Peters or the late Edward Deming, who traveled the world preaching the doctrine and collecting fat consulting fees. No books on the subject existed.
* Very likely Drucker, Peters and Deming could have learned a lot more from the Henokiens than the Henokiens could learn from them.
* These families did not subscribe to Business 2.0 or FastCompany or Family Business. They did not call each other on the telephone, because no telephones existed until the 20th century.
* It is highly unlikely these business families even knew each other, let alone got together at business conferences at a flashy hotel in Capri or Cannes to compare notes.
* As the Henokiens Web site explains:
In 1981, the idea of creating an association of bicentenary family companies came from the Chairman of Marie Brizard, a descendant of the creator (in 1755) of the first anisette. He decided to place it under the aegis of Henok (or Enoch) a name coming from the Bible.
Henok (or Enoch) was one of the greatest patriarchs. Caïn's son and Methuselah's father, he lived before the flood, and was 365 years old when he ascended to Heaven without having died. After a year of research, Gérard Glotin, Chairman of Marie Brizard (with the help of 164 Chambers of Commerce and 25 embassy attachés) was able to identify 74 companies and among them made a selection of about thirty.
The first meeting took place in 1981 in Bordeaux. Since then, the Henokiens (there are 32 members in 2003) meet each year in a different country for their general meeting. For the year 2000 it was in Holland, 2001 in Italy, 2002 in Germany and 2003 in France.
In short, these families operated in relative isolation for more than two centuries, making their achievements nothing short of miraculous!
With all their theory and book learning, could the hotshot MBAs out of Harvard or Stanford or Wharton--and their descendants--pull off miracles such as these?
We'll never know. But I would not bet on it.
My Failed Dream …
The story of the Henokiens is a book I have desperately wanted to write for years. The problem is I would need four months and a $100,000 advance to cover travel and expenses through Europe and Japan. I hit 70 next week. With clients and crazy deadlines, that just ain't in the cards.
But this is a book crying to be written. If done right, it would be right up there with "In Search of Excellence"--an international best-seller for decades and required reading for everyone who is in a family business or thinking about starting one.
To some author and publisher out there, I offer the World War II submariners' toast: "Good hunting."
The Henokiens--By Year (Ascending)
(Also noted: Those companies that have a museum)
1797 - Crespi, Ghemme (Novara) Italy, Cotton, Linen
1792 - Gruppo Falck, Milan, Italy, Re-lamination of High Carbon Intensity Steel Strips
1789 - Revol, Saint-Uze, France, Kitchen Porcelains
1783 - Confetti Mario Pelino, Sulmona (AQ) Italy, Confectionaries (Museum)
1779 - Ditta Bortolo Nardini, Bassano del Grappa, Italy, Grappa
1775 - Giobatta & Piero Garbellotto, Conegliano (Trévise), Italy, Coopers
1772 - Editions Henry Lemoine, Paris, France, Publishers of Music, CDs, CD-ROMs
1757 - Lanifeicio G.B. Conte SpA, Schio (VI) Italy, Wool
1745 - J.D. Neuhaus, Witten-Heven, Germany, Air Hoists, Cranes, Drilling Platforms (Museum)
1754 - Fonderia Campane Daciano Colbachini & Figli, Saccolongo (Padoue) Italy, Bells, Industrial Products
1733 - Piacenza, Biella, Italy, Wool
1700 - William Clark and Sonds, Ltd., Co Derry, Northern Ireland, Linens, Fusible and Non-Fusible
1690 - Delamare et Cie, Criquebeuf-sur-Seine, France, Wood, Plastics, Industrial Packaging
1685 - SFCO - Société Française pour le Commerce avec l'Outre-mer, formerly Maison Gradis, Pris, France, Wine
1679 - Viellard Migeon & Cie, Forges de Morvillars, France, Industrial Steel Products, Fish Hooks
1669 - Okaya, Nagoya, Japan, Trading Company
1664 - Friedr. Schwarze, Oelde, Germany, Alcoholic Beverages
1637 - Gekkeikan Sake Company, Ltd., Kyoto, Japan, Sake
1632 - Van Eeghen, Amsterdam, The Netherlands, Trading Company
1615 - Cartiera Mantovana, Mantova, Italy, Paper
1613 - Mellerio dits Meller, Paris, France, Jewelry, Sporting Trophies
1575 - Hugel & Fils a Riquewihr, Riquewihr, France, Wine
1568 - Von Poschinger Glasmanufaktur, Frauenau, Germany, Glass
1551 - Codorniu, Barcelona, Spain, Champagne Type and Still Wines (Museum)
1526 - Beretta, Brescia - Italy, Military and Sporting Guns
1500 - Marioboselli, Milan, Italy, Yarn
1470 - Jean Roze, Saint-Avertin, France, Silk
1469 - Amarelli, Rossano Scalo (CS), Italy, Liquorice (Museum)
1369 - Torrini, Fierenze, Italy, Jewelry Store (Museum)
1321 - Baronnie de Coussergues, Montblanc, France, Wine
982 - Barovier & Toso, Murano Venezia, Italy, Glass (Museum)
717 - Hoshi, Ishikawa 923 03, Japan, Hotel (Museum)
Takeaway Points to Consider
* Visit the Henokiens Web site (www.henokiens.com). It is fascinating and absolutely chock-a-block full of information and advice that could directly pertain to your business.
* On the Henokiens Web site, you will find interactive features and interviews with current Henokiens CEOs. Each company has its own Web page and, in addition, there are myriad links to the companies' own Web sites and those of their subsidiaries, plus a reading list.
* Be sure to click on "Becoming Henokien" and then download the "51 QUESTIONS TO PREPARE THE HANDING DOWN OF A FAMILY COMPANY." Maybe if Rupert Murdoch had downloaded this early on, News Corp. would not be in such sudden disarray today.
Letters to the Editor
In response to "Whispering Down the Lane at Harvard," which was published on Aug. 4, 2005:
Sadly, we're living in an era of PC-intimidation and relentless whining. Given that, I can't imagine the outcome and exaggerated outrage would have been any different had the speech been released earlier. After all, the same people who hear only what they want to, also see only what they want to see. How many comments appear in the news each day that are extracted completely out of context? Too many! Isn't it a shame that the individuals that vent the most and the loudest are the supposedly the well-educated among us? Those are the people who should, by virtue of their lofty education, possess the most objectivity. But that, unfortunately, is no longer the case in our current community of educators, politicians or media.
As a woman, I wasn't at all offended by Dr. Summers' remarks. I would have interpreted his comments as a challenge, as he states, to be proven or debunked on the basis of rational science, not personal opinion. And, if proven correct, to try to find a solution. We are sinking deeper and deeper into becoming simply a culture of finger-pointers, not problem-solvers.
--Diane Weaver, with AT&T
It's interesting that the phrase "innate differences" doesn't even appear in Summers' speech … in fact, even the word "innate" is absent. There's a fine line between political correctness and overweaning piety.
-John Friesen, with Blue Giant Media
I've been reading your thoughts for years. Recently you've addressed issues that seem disparate, but that all relate to the future of American business. I'm a small business owner with a degree in elementary education and a professional educator for a wife.
Your recent e-column quoting Bill Clinton's thoughts on job outsourcing and this one regarding Lawrence Summers' speech illustrate what I perceive to be one of America's biggest roadblocks.
The only real way to keep high-paying jobs in the U.S. is the constant development of new high-paying jobs. That requires innovation--which requires world-leading education. "No Child Left Behind" does not move us in that direction. So how do we once again lead the world in education--and thus innovation? I'm not sure that I know. But I've recently read and heard very intriguing thoughts from diverse sources--the "two Bills" (Bennett and Clinton), for example; and from Jonathon Kozol and David McCullough and George Will.
Here's my point and yours (?)--we are so politicized in America today that we selectively react to rational arguments. We can't even consider the reasoned thoughts of someone not aligned with our own political leanings. We hear what we want to hear and discard the rest. Please, Denny, tell me how we change this.
--Jim Brown, with Direct Marketing Solutions
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