At Carlson, the 3rd generation joins the board

The grandchildren of Minnesota business giant Curt Carlson are taking their seats at the top of the travel and hospitality conglomerate that Carlson started more than 70 years ago with a quirky little loyalty program called Gold Bond Stamps.

The number of third-generation heirs on the 11-member Carlson board of directors grew from two to four last week and will eventually get larger. In a year, one of those four will become chair of the board as current Chairwoman Marilyn Carlson Nelson steps down in 2013.

"We're being very planful," said Nelson in an interview on Friday. "We're hopeful they will be open to innovation and new ideas and will grow to be responsive. We will be near to support that transition."

Carlson, formerly known as Carlson Companies, cuts a high profile in the Minnetonka skyline where its headquarters sit on Carlson Parkway. It's the parent company for such well-known brands as Radisson and Country Inn & Suites hotels, T.G.I. Friday's restaurant chain and Carson Wagonlit Travel.

Privately held Carlson, which does not disclose profits, reported consolidated revenue of $4.5 billion last year.

Until 2008, it also was a family run company after Nelson succeeded her father as chief executive. The first nonfamily member to run the business is Hubert Joly, whom Nelson praises as a "global thinker."

Joly also is credited with leading the company through the recession, broadening the Carlson Rezidor Hotel Group while shedding the company's marketing division. He also brought more transparency to the company's financial picture.

The odds are often stacked against a family business making it past the first generation much less the third.

Consultant Tom Hubler, who runs Hubler for Business Families, said that less than one in four family businesses make it to the third generation without internal dissension over finances, vision and leadership.

"It's important to create a trusting family culture and build emotional equity," Hubler said. "You need to hold family meetings and establish family goals for the company and family expectations."

In the case of Carlson, the second generation of successors were daughters -- Nelson and Barbara Carlson Gage. The third-generation heirs are cousins, and that can be problematic.

"You've gone from siblings to cousins, and cousins are not as well-connected," Hubler said. "They have different parents."

"The family is involved in governance, not management," Nelson said, referring to an adage repeated by her late father called NIFO -- Nose In, Fingers Out. "The family asks questions and gives feedback."

Nelson noted that the third-generation members -- there are seven overall -- have both business as well as community service backgrounds.

"They appreciate what good corporate citizenship means," Nelson said of the third generation. "There is a lot of sensitivity to social and cultural issues in our community."

Geoffrey Gage is president of Geoffrey Carlson Gage Brand Communications and worked for the ad agency Campbell Mithun. Wendy Nelson is chairwoman of the board of the Guthrie Theater but also has experience in Carlson's restaurant and hotel divisions as well as a private equity firm. Scott Gage is president and chief operating officer of Gage Outdoor Expeditions and Diana Nelson is an overseer at Harvard University. Diana Nelson lives in San Francisco. All the others live in the Twin Cities.

The three family members not on the board are Richard Gage, 40, Christy Gage, 41, and Curtis Nelson, 48. Curtis Nelson had a falling-out with his family six years ago over succession planning.

"The most important thing is a solid family relationship," he said. "Building an esprit de corps is critical to weathering storms."