Centuries-Old Family Businesses Share Their Secrets

Other enterprises can benefit by borrowing strategies from these companies that have prospered generation after generation

by Stacy Perman

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Third-Generation Young Electric Sign Company Credit: YESCO

Eighth-Generation Lyman Orchards Credit: Lyman Orchards

Third-Generation T. Anthony Credit: T. Anthony

Eighth- and Ninth-Generation Villeroy & Boch Credit: Villeroy & Boch

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In 2000, a few members of the Lyman family moved out of its capacious ancestral home. Though the house, set on a sprawling farm in Middlefield, Conn., had been inhabited by Lymans since its construction in 1785, it was feeling too big for them. Two years later, the 180-member family decided to turn the homestead into an event space for weddings and other occasions. It was the latest in a series of business decisions that have kept the family business thriving for over 200 years.

Today, the event space is one of multiple businesses spun out of Lyman Orchards, including two golf courses, a line of baked goods, and Connecticut's largest indoor farm market. The farm, operated by eight generations of Lymans, sits on 1,100 acres and earned $10 million in revenue in 2007. "I think obviously it's unusual for a family business to last as long as us," says John Lyman, Orchards' executive vice-president.

Indeed, according to the Family Firm Institute, a research group in Boston, only 30% of family-owned businesses make it to the second generation, 10% to the third generation, and 3% to the fourth. While all enterprises are susceptible to failure, regardless of ownership, family businesses contend with some unique issues (BusinessWeek.com, 9/26/07), such as managing succession, going public, bringing in outside board members and other executives, and keeping products or services relevant through the generations.

The Importance of Looking Ahead

While the odds are indeed stacked against family-owned businesses being operated by continuous generations of family members, there are examples of companies that have remained family-controlled and successful through time. Kongo Gumi (BusinessWeek.com, 4/16/07), a Japanese construction company that began in the year 578 lasted for 14 generations until 2006. The Marinelli family of Agnone, Italy, has been making bells in its foundry since around the year 1000. The Loane Bros. started in 1815 as a maker of canvas sails on Baltimore's Bowley's Wharf for the famous Baltimore clipper ships in 1815. When the steamship made sails obsolete, Loane shifted the company's focus to manufacturing awnings. Today's sixth generation continues to produce awnings and also makes event tents.

While the statistics don't favor family ownership over the long haul, those companies that have beaten the odds describe a host of things that have contributed to their success. According to William O'Hara, the executive director of the Institute for Family Enterprise at Bryant University in Rhode Island, the biggest mistake that most family businesses make is not planning for the future. "The companies that have trouble are those that don't look ahead, whether about succession or future products," he says. Regarding the happy few that do make it, O'Hara says, "Those that have been around for centuries deal in products that respond to human needs."

According to John Lyman, the key to his family's 265 years of success has been remaining tied to the land as well as continuously diversifying offerings. The head of the family's third generation, Charles Elihu Lyman, introduced non-agricultural products such as spring lambs and dairy cattle, and began selling hay for local livestock. He is also credited with introducing peaches as a major crop in Connecticut.

Luggage Maker to the Stars

In the 1930s, the family began promoting Lyman Orchards as a recreational family destination, with the launch of the Apple Blossom Festival. "To stay relevant in the market you have to change," says John Lyman. "We are constantly looking for new opportunities. We've tried to be open to new ideas. We are not heavy risk-takers, but we try not to be afraid of taking risks, too."