Outsider will lead Carlson Companies

One of the last of Minnesota's iconic business families to still have a family member directly in control of the firm it built is passing that responsibility to an outsider.

Marilyn Carlson Nelson, who for 10 years ran the company founded by her legendary father, Curt Carlson, announced Tuesday that she is being succeeded by Hubert Joly, a French executive who currently runs Carlson Wagonlit Travel.

In making the move, the Carlsons join the ranks of the Pillsburys, Cargills and other families who over time ceded operational control of their companies to outside managers.

Joly, 48, will become CEO at Carlson Companies, the 70-year-old Minnetonka-based travel, hospitality and marketing conglomerate, on March 1. Carlson Nelson, 68, will remain chairman of the board.

Joly's selection caps a sometimes rocky 1½ years of succession planning and executive search for the multibillion-dollar business. The search began after Carlson Nelson's son, Curtis, the onetime heir apparent, angrily left the family business when it became apparent that he would not be given the top job.

He eventually sued for a share of the organization, asking for 14 percent of a company that has annual revenues in excess of $5 billion a year. The lawsuit is pending.

The inter-familial discord was invisible Tuesday, however, as Carlson Nelson introduced her successor to several hundred applauding employees in the rotunda of the Carlson Towers.

Joly, a former Vivendi Universal executive, will face challenges. The struggling U.S. economy has made for fewer families willing or able to spend money for a night out at Carlson restaurants like TGIFridays. Rising fuel costs also mean fewer road trips and fewer expensive airline tickets. And the credit crunch could affect corporate marketing decisions.

But, Joly said, economies elsewhere in the world are strong.

"The rest of the world is operating in a robust way. Carlson, being a global company, has opportunities outside the U.S.," he said.

Before joining Carlson Wagonlit as CEO in 2004, Joly worked as an executive at Vivendi, Electronic Data Systems in Europe and as a consultant in the high-tech sector for McKinsey & Co. While he has been at Carlson Wagonlit, sales more than doubled.

"You not only have someone with a great-looking résumé but a proven track record as well," said David Meyer, editor of the travel industry publication Business Travel News.

Born and raised in France, Joly (his name is pronounced Hue-BARE Joe-LEE) currently lives in Paris with his wife but has previously lived in San Francisco, New York and Los Angeles. He has one child in college and another preparing to enter college in the fall.

Joly comes to Carlson as both an insider and an outsider. He's part of a company subsidiary but an outsider of sorts since Carlson Wagonlit is not a wholly owned subsidiary.

Joly was selected as the next CEO before the Christmas holidays and officially approved by the board of directors last week.

"It takes two to tango," he said about the selection process. "Marilyn and the board knew me. I was very attracted by the size and scope of the company."

Carlson Nelson won accolades

"She's been very successful. She's a philanthropist, a leader in the community. And she's demonstrated that over and over again," said Tom Hubler, a Minneapolis consultant who advises family-owned businesses on governance and executive succession. "It's too bad Curt didn't select her [as CEO] sooner."

Curt Carlson, who founded the company in 1938 with a loyalty program called Gold Bond Stamps, built it into a global firm with hotels and restaurants, travel agencies and marketing programs. As he grew older, he resisted giving up control of his firm.

Son-in-law Edwin (Skip) Gage became CEO in the late 1980s but left to start his own business, Gage Marketing, when Curt wouldn't relinquish the top job. Carlson Nelson became CEO in 1998, the year before Curt died.

For several years, Curtis Carlson Nelson was presumed to be headed for the CEO job, but performance and character issues caused his mother and the board to look elsewhere.

"That was an enormously difficult thing to do," Hubler said. "She had the tenacity to say that was not in the best interest of the company, the family and Curtis."

In a nearly 30-minute speech to employees, Carlson Nelson was effective, characteristically upbeat and a little emotional. Her voice cracked as she talked about the Carlson legacy.

"I remain as optimistic about the future of this company as I was in my late teens when I went to work for the Gold Bond Stamp Company," she said.

Carlson Nelson warmly embraced Joly after giving him a steamer trunk that is a replica of the one her Swedish immigrant great-grandfather brought to America. It had been given to Carlson Nelson by her father 10 years earlier.

"I ask you to keep this in your office to remind you of the legacy," she said.

David Phelps • 612-673-7269