Generation Next

Outside experience benefits family business leaders

Kringle is the signature treat of Racine, where several bakeries specialize in the Danish pastry, which was also named Wisconsin’s official pastry in 2013.

One of the best-known Racine kringle-makers is O&H Danish Bakery, which is well-known not only for its kringle, but also for its other baked goods. The company has five stores, one bakery and 180 employees. The largest portion of its business is mail order.

Matt Horton, Eric Olesen and Peter Olesen of O&H Danish Bakery.
Matt Horton, Eric Olesen and Peter Olesen of O&H Danish Bakery.

The key to making the best baked goods, including kringle, is “a commitment to do all of the things it takes to make a good baked product,” including great ingredients, the process, time and dedication, said Eric Olesen, president of O&H.

Olesen and his wife, Lisa, own O&H Danish Bakery, which has a proud family history. Eric will be a panelist at the Family & Closely Held Business Summit, hosted by BizTimes Media, on Thursday, June 2 from 7 to 11:30 a.m. at the Italian Conference Center in Milwaukee.

O&H Danish Bakery is one of the best-known makers of kringle in Racine, a community synonymous with the Danish pastry.
O&H Danish Bakery is one of the best-known makers of kringle in Racine, a community synonymous with the Danish pastry.

O&H Danish Bakery was founded in 1949 by Eric’s grandfather, Christian Olesen, and Harvey Holtz. Christian, who immigrated to the U.S. as a boy from Denmark, was an experienced baker and Holtz was an accountant by trade.

Holtz died in 1959, and Ray and Myrna Olesen, Eric’s parents, purchased the Holtz share of the business in 1963. Ten years later, Ray and Myrna bought Christian’s share of the business.

Eric and his brothers, Dale and Michael, all worked in the business beginning as teenagers. In 1994, the three of them purchased the business from their parents and each held an equal share.

O&H Danish Bakery is one of the best-known makers of kringle in Racine, a community synonymous with the Danish pastry.
O&H Danish Bakery is one of the best-known makers of kringle in Racine, a community synonymous with the Danish pastry.

In 2009, Dale died unexpectedly.

“It was difficult,” Eric said. “But I believe we were prepared for that with agreements that we executed.”

In 2011, Michael decided to exit the business and move to Florida. That left Eric and Lisa as the sole owners.

Today, two members of the fourth generation of the Olesen family are involved in running the business. Eric and Lisa’s son, Peter, is a vice president who oversees the financial side of the business. Their son-in-law, Matt Horton, who married their daughter, Alyson, is vice president of marketing. Eric remains the president of the company.

Peter and Horton bring significant outside experience to the company. Horton worked for Racine-based S.C. Johnson from 2005 to 2014 before coming to O&H. Peter worked for Blue Stone International, a financial consulting firm in Chicago, for three years before joining the family business.

Eric said he and Lisa never planned for or pressured their children to get involved in the family business. They only insisted that their children work hard in school to get a good education, which would open up opportunities for them.

“My wife and I did not think our children would be interested in coming back,” Eric said. “Not once did we invite them. They asked. Quite frankly, we questioned them (when they asked to join the family business). We wanted to make sure they really wanted to do this. I just kept asking. We did everything we could, not to dissuade them, but to encourage them to think about what they want and to acknowledge this is not a frivolous decision.”

The approach O&H has taken with its fourth generation of family business leaders is not unusual for mature family-owned businesses, according to Dean Fowler, Ph.D., owner of Brookfield-based family business advisory firm Dean Fowler Associates Inc. Fowler is the author of four family business books including, “Successful Habits of Family Business Successors.” He will lead a roundtable presentation at the Family & Closely Held Business Summit, which will have a total of 20 roundtable discussions on different family business themes. Attendees will be able to attend up to four of the roundtable discussions.

Panel discussion featuring: Scott Larson of Gustave A. Larson Company, Deborah Anguil of Anguil Environmental Systems, Eric Olesen of O&H Danish Bakery and Theodore (T.J.) Perlick Molinari of Perlick Corp.
Panel discussion featuring: Scott Larson of Gustave A. Larson Company, Deborah Anguil of Anguil Environmental Systems, Eric Olesen of O&H Danish Bakery and Theodore (T.J.) Perlick Molinari of Perlick Corp.

The Family & Closely Held Business Summit will also feature a keynote address from Thomas Deans, author of “Every Family’s Business.” Each attendee will receive a copy of the book.

“The pattern of family business owners encouraging their children to go out and discover the world is extremely common in third, fourth and fifth generation family businesses,” Fowler said.

COV-BookIn younger family businesses transitioning from the first generation of family ownership to the second, there is often more pressure on the next generation to be involved in the business because the younger, smaller company needs them, Fowler said.

“In later generations (of family business ownership) there is more of a pattern to encourage children to work outside of the family business and (first) pursue other interests,” Fowler said.

The leadership at Gustave A. Larson Co., a Pewaukee-based distributor of heating, ventilation, air conditioning and refrigeration products, had a similar experience. The company was founded in 1936 by Gustave Larson, the grandfather of Scott Larson, the company’s current president, and Andrew Larson, the company’s current chief executive officer.

Scott and Andrew’s father, Karl Larson, ran the business for nearly 40 years before the brothers took over. They have run the business together since 1998.

Scott, who also will be a panelist at the Family & Closely Held Business Summit, said his dad never pressured them to get involved in the family business. Scott and Andrew both got undergraduate business degrees, and both worked in investment banking before getting their MBAs. They were working for different businesses before they decided to join their family’s business.

“(Karl) had not pressured us to come back into the business, but he held it open,” Scott said. “My dad felt it was important for us to get outside experience before joining the family business. But he never told us that. He was kind of wise about it in terms of not setting a strict expectation. I think it would have been a different story if (joining the family business) was the expectation early on. I would have resisted at a young age with a rebellious attitude that a young son would have.”

Under Scott and Andrew’s leadership, Gustave A. Larson has grown from 14 locations and 150 employees in 1998 to 53 locations and 430 employees today. They have grown the company’s service area from five states to 20 states. Much of the company’s growth has come through acquisitions. Scott and Andrew used the experience they gained in investment banking to grow Gustave A. Larson by acquiring others.

“Both of us having a background in investment banking and M&A, we have been able to find our own deals,” Scott said.

(from left) Scott Larson, Karl Larson and Andrew Larson.
(from left) Scott Larson, Karl Larson and Andrew Larson.

Fowler says it is a good idea for family members to work outside the family business before joining the family company.

Children will benefit from establishing themselves with their own career outside of their family’s business.

“The development of that independence is very important psychologically,” Fowler said. “Establish yourself as an adult, as opposed to a child in the family that owns the company.”

Also, working outside the family business exposes young professionals to how other successful companies do things and gives them ideas they can bring back to their family’s business.

“If they’ve always just been in the family business, they only see how things are done there,” Fowler said.

Sometimes, unexpected events bring children back into their family’s business.

Deborah Anguil, the chief operating officer of Brown Deer-based Anguil Environmental Systems Inc., never planned on working for the family business, a provider of industrial air pollution control, emission abatement and energy recovery systems.

Her father, Gene, started the company in 1978. Deb joined the company in 1990. She was pursuing her master’s degree in exercise physiology at the University of Wisconsin-Milwaukee and was working because she needed to make some money. She had received her undergraduate degree in exercise physiology from Indiana University.

Deborah Anguil, Gene Anguil and Chris Anguil.
Deborah Anguil, Gene Anguil and Chris Anguil.

Her dad and her older brother, Jeff, were running the company, and they were thinking about selling it. In 1992, the company had an offer to purchase the business.

But in late 1992, Jeff was diagnosed with cancer. He died in the summer of 1993. The deal to sell the company was pulled off the table.

The Anguil family regrouped and circled the wagons.

Deb’s younger brother, Chris, joined the company to work on inside sales and marketing.

“There was never any pressure at all (to join the family business),” said Deb, who also will be a panelist at the Family & Closely Held Business Summit.

But after Jeff’s death, she decided to stay aboard and never completed her master’s degree in exercise physiology.

Deb dabbled in different aspects of the business, including international sales, human resources and marketing. Prior to joining the company, she had worked for a couple of years in corporate wellness and cardiac rehabilitation.

Deb said she realized, “I don’t know the first thing about business.” So she entered Marquette University’s accelerated MBA program.

“I never worked so hard in my life,” she said.

In 2008, Gene announced the company would begin its transition to the second generation. He became CEO and handed many of his responsibilities over to Chris and Deb. Chris became president, focusing on sales and marketing, and Deb became chief operating officer, focusing on operations.

“(Gene is) clearly very proud of us,” Deb said. “We are running this place.”

Family members who work outside a small family business for a while might find it hard to later join the family business without displacing another employee.

“If the business is growing and you leave for five years, they will have to hire somebody else to fill slots,” Fowler said. “But my recommendation is to do it anyway. Leave and get outside experience, because as the business grows opportunities will increase and you will eventually be able to get into the family business.”

Another challenge for small family businesses is that the best and brightest of the next generation may leave to work elsewhere, while the less talented of the next generation will stick around and try to make a go of it in the family company, Fowler said. That presents a risk to the family business, but the benefits of having the next generation gain outside experience still outweigh the downside, he said.

Milwaukee-based Perlick Corp. is a 99-year-old family-owned business that manufactures bar and beverage systems. T.J. Perlick Molinari is the only family member working in the business full time. He is a component assembly, refrigeration and brewery fittings supervisor.

Theodore (T.J.) Perlick Molinari with his grandfather Robert (left) and father Larry Molinari (right).
Theodore (T.J.) Perlick Molinari with his grandfather Robert (left) and father Larry Molinari (right).

Perlick Corp. was founded in 1917 by Robert Perlick and his son, Walter, Perlick Molinari’s great-great-grandfather and great-grandfather. Walter’s sons, Robert and Gordon, were the third generation leaders and ran the business for about 30 years. Robert had two daughters, Gail, Perlick Molinari’s mother, and Pam, his aunt.

Pam and Gail are the co-owners of the company today.

Perlick Molinari started his career as a trial lawyer, but he wasn’t happy practicing law.

“I thought I was misplaced in the legal field,” he said. “I felt like an imposter.”

He joined the family business in 2014, at the age of 35, with no formal business experience.

“I had always been in leadership positions and I’d always been successful at that,” he said. “(While practicing law) I felt that I wasn’t utilizing my best skills: organization, managing people, leading people. I thought I had the ability to add more (at Perlick Corp.).”

In joining the family business, Perlick Molinari is working for an executive leadership team of non-family members and has had to work to prove himself. He hopes to eventually advance to the top of the company ladder.

“If I am able to prove myself, my goal is to be given an opportunity to be the fifth generation of my family to run the business,” Perlick Molinari said. He will also be a panelist at the Family & Closely Held Business Summit.

Another common thread of family businesses is that leaders know they need a succession plan, and are working on it, but have not completed the process. Succession planning only becomes more difficult as the family business is passed on to later generations and the business and the family both continue to grow.

“(Succession) is a big part of our agenda when we talk about the future of the business,” said Scott Larson. His dad, Karl, remained the company’s chairman until he died in 2012.

“It took my dad’s passing to complete the estate plan for the company,” he said. “We know one of the biggest issues we have to address is the fourth generation.”

Gustave A. Larson Company’s Milwaukee location.
Gustave A. Larson Company’s Milwaukee location.

Gustave A. Larson Co. has a board of directors that is advisory and comprised of non-family members and non-shareholders. The board is helping work on the succession plan, Scott said.

Gene Anguil, now in his late 70s, remains active with his family’s company and is still in the CEO role but is phasing himself out, Deb Anguil said. About a year ago his grandson, Alex Anguil, joined the company as a site services project coordinator. He is the first third-generation family member to join the business.

Alex is one of 13 grandchildren in the family, which raises questions about how Anguil Environmental Systems will be passed on to that generation.

“We are talking about putting some parameters in place for coming into the business,” Deb said. “We would like them to have outside experience before coming into the company long-term.”

In recent years, a lot of paperwork has been drawn up for Gene’s estate planning. An agreement was reached that Deb and Chris would receive majority ownership of the business, since they have been running and growing the company. Other family members will get larger shares of Gene’s estate. Deb and Chris’ sisters will get non-voting shares of stock in the company.

Deborah Anguil, chief operating officer of Anguil Environmental Systems.
Deborah Anguil, chief operating officer of Anguil Environmental Systems.

“(Succession planning) is a challenge,” Deb said. “It’s not easy talking about the demise of my father.”

O&H Danish Bakery also needs to complete its succession plan.

“(Succession is) on our agenda to discuss,” said Eric Olesen, 55. “I don’t have a roadmap yet. I’m still in the process of developing it. Within the next 12 months, things will be much clearer. I enjoy what I do. The business is in a good place. We’ve got good leadership here. In the next five to 10 years, I’ll be ready for retirement.”

Working side-by-side with family members offers challenging relationship dynamics but also great rewards, the family business leaders say.

“I feel we’re very, very blessed,” Deb said. “I feel (Chris and I) are able to work well together. It’s not that we agree with everything by any stretch of the imagination, but we have a very close relationship. I think we complement each other well, with him on the sales and marketing side and me on operations. (Working in the family business) has totally changed my life. The ability to work with family, the people you love, and be successful is phenomenal.”

“It absolutely can be challenging,” Eric said. “It’s always good to repeat that our business is very important, but also our family is very important. It is very difficult to keep them separate. The best way to do it is to know you have a business and to respect what that gives you and can give you, and to respect each other. We are all contributors to the business and to the family.

“The single most important thing to achieve success in a business and in a family is trust. That word really resonates in my mind. I want to be worthy of trust. I try to be mindful of everything I say and do to be worthy of trust.”

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Andrew is the editor of BizTimes Milwaukee. He joined BizTimes in 2003, serving as managing editor and real estate reporter for 11 years. A University of Wisconsin-Madison graduate, he is a lifelong resident of the state. He lives in Muskego with his wife, Seng, their son, Zach, and their dog, Hokey. He is an avid sports fan and is a member of the Muskego Athletic Association board of directors.

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