Lansberg·Gersick & Associates
Advising the world's leading family enterprises
lga_banner_circles_rightsideB.png

Writing

Articles & Analysis

 

We hope you enjoy this commentary from the firm's consultants on a variety of topical issues facing family enterprises. Many of the articles include PDF versions which are available for download. Please feel free to share!

 

The Reluctant Successor

download pdf

Dan Gerber appeared headed for the role that fate had carved out for him at the Gerber baby food company. But at age 21 he decided to pursue a different dream.

By Howard Muson in Family Business Magazine

At one point in Dan Gerber's new novel, A Voice from the River, Nick Wheeler recalls getting up his courage to tell his father, Russell, he is leaving the family company. Nick sees his job in the cardboard container division of Wheeler Industries as that of a “glorified errand boy”. He wants to quit and open an art gallery. But he is unable to refuse his father's simple plea that “it would mean an awful lot to me if you would stay on.” By the time he reaches home, Nick is “burning with self-disgust.”

Before his death in 1974, Daniel Gerber Sr. made a similar request of his son. But the circumstances—and Dan's reaction—were quite different. Dan had been appointed to the board of directors of the Gerber Products Co. at age 27. But after five years of somnolent meetings with a bunch of older businessmen, he told his father he wanted to resign. “Well, I wish you'd stay on, because it would mean a lot to me if you did,” his father said.

Dan agreed, and today is not sorry. He knew that his decision soon after college to “take the vows” as a writer had disappointed his father, who wanted him to carry on the family tradition at the $1 billion baby food company in Fremont, Michigan. He loved and respected his father; staying on the board was a small concession. “I didn't want to hurt his feelings,” Dan says. “I didn't want to say to him that I disregarded what he had devoted his life to.”

In Fremont, where Dan Gerber grew up, most people in the company and the community expected him to succeed his father one day. Years ago he wrestled with those pressures and tried to find a way to break free and follow his own path. Gerber, who turned 50 in August, has become the artist he set out to be. He has written four volumes of poetry, two other novels besides A Voice, a collection of short stories, and numerous magazine articles.

But in mid-life, Gerber discovered he also has a talent for business. In recent years, the company has come through a roller coaster series of crises, growth and slumps, shaky leadership, a takeover battle, and a restructuring. The directors have been deeply involved in turning the company around, and Dan Gerber has become as familiar with a P&L statement as he is with Proust. Through it all he has been guided by his father's business instincts.

“I guess I still want to make him proud of me, even though he's been gone for 16 years,” Dan Gerber says. “I still get a lot of advice from him, in the sense that the spirit of those people we care about and are very close to stays with us. A lot of times when faced with a board decision, I can almost hear him clearing his throat, and I think, ‘Now how would he look at this.’”

Dan Gerber is hardly one's picture of the literary esthete. He’s an outdoorsman who has been hunting, fishing, and climbing mountains ever since he was a boy. Tanned , blond- haired, jaunty, he appeared at the Carlyle in Manhattan, where I interviewed him, in a white sport jacket, open-neck shirt, and slacks. The previous evening he had been on a Circle Line cruise on the Hudson River, watching fireworks at a party given by writer George Plimpton.

We talked about his father, who was, in a way, the Henry Ford of baby food in America, and about Dan's current work as a director of the company. And, of course, we talked about A Voice from the River (Clark City Press, Livingston, Montana) which echoes many of his experiences.

In the book, Gerber Products has become Wheeler Industries, a manufacturer of finished paper products located in Five Oaks, Michigan, a barely disguised version of Fremont.

Even though a company much like Gerber Products and a father-son succession are central to the novel's plot, however, don't be misled: This is a work of fiction with concerns that rise far above the specific business details.

Russell Wheeler, 65 and retired, realizes time is short. “All his life had been given to figuring things out, and in business it had worked well for him. But he couldn't figure out getting old; he couldn't figure out dying.”

Russell is struck by how little outside the business he has been able to control, how much in life has eluded him. He and his wife of many years are divorced, and she has wed a celebrated beautician. His son, Nick, seems to be suffering from post-Vietnam trauma as well as older feelings of inadequacy. Russell's daughter, Marlis, who admires her father and was a typical boy-crazy teenager, has taken a woman as a lover.

All this reminds him of Thoreau: “How few things a man can measure with the tape of his understanding.” The hardest development to measure in the book is Russell's love affair with his daughter-in-law, Lesley, after Nick deserts her to go to live with another woman in New York.

In Russell's attempt to “figure things out,” another, more exotic place looms in his memory as polar opposite to Five Oaks. While serving with the Red Arrow Division in the Pacific during World War 11, he was aboard a C-4 plane that crashed in the jungle of New Guinea. The only survivor, he was received as a friend of the gods by a tribe of cannibals. The Minarri (The People) nursed him back to health, and their chief, Kopa ki, became his friend. Decades later, his experiences among The People seem to represent for Russell the simpler, instinctual life—the rebirth of innocence and pure spirit he is seeking.

Dan Gerber is a skilled storyteller, with a keen appreciation of the sinuous ways of the soul—the guilts, the small hurts, the misunderstood motives that shape psyches and human behavior. His characters seem real, their conversations are finely tuned.

Yet, of course, the characters are not real. “I don't think anyone is taken whole hog from real life,” Gerber says. “But, in retrospect, I realize that bits and pieces of actual People have gone into the characters. The relationship between the father and son in the book is not like the relationship between my father and myself. Russell Wheeler's age is exactly halfway between my age and my father's. There are elements of both of us in him.”

To residents of Fremont, a town of about 4,000 in the Upper Midwest’s Farm Belt, the name Gerber has always had virtual seignorial status. Gerber Products, a Fortune 500 company with baby food plants in two other cities, is the town's chief employer. Three generations of family members have led the business, which grew out of the Fremont Canning Company along with family furniture and wholesale grocery businesses. Dan's grandfather, Frank Gerber, was president for 28 years, until Dan Gerber Sr. took over in 1945. Although his son points out that Gerber Products went public in the fifties and the Gerbers retain just 7 percent of the stock, people still think of it as a family company in Fremont if not on Wall Street.

“My father had a sense of it being like a big family,” Dan Gerber says. “He had started out in the pea vinery. When the pea pack was on, my mother and the other women would bring sandwiches to the workers at the plant. It was a very paternal company. If an employee had put in good service and his job outgrew him, my father would find something for him to do until he retired.”

The inspiration that turned a regional canning company into a nationwide business came from Dan's mother. In 1927, Dorothy Gerber, noting that her husband was having trouble helping her strain peas for their second-born daughter, Sally, asked if it could be done instead at the plant. It could, and the first batch was so good that the company was soon canning mashed peas, prunes, carrots, and spinach for babies. The senior Gerber's real coup, however, was selling his canned baby food through groceries instead of drugstores, where baby products—including some foods available by prescription—had always been sold.

It seems Dan had a normal, happy childhood, in a loving but competitive household. He had four older sisters who doted on him but also tormented him. When he was small, he gleefully remembers, “They used to tie me up, dress me in a white pinafore, put makeup on and throw me out on the street and lock the door. I was the toughest kid in the neighborhood in a white pinafore.”

His father was the kind of man who, when his son was 12, showed him where the booze and cigarettes were and told him to help himself if he wanted to try them—“Just don't share it with your friends or take it out of here.” His mother, whose maiden name was Scott, claimed the poet Sir Walter Scott as an ancestor and wrote poems, mostly about babies, for women's magazines.

In high school, Dan was praised for writing an occasional brilliant paragraph, but mostly was one of the guys; he played nose guard and wide receiver on the Fremont High football team. At Michigan State University, where he studied political science and economics, he thought about being a lawyer. He had also by then become a serious student of literature and was harboring writing ambitions. Nevertheless, after college he headed for the fate that appeared to be carved out for him at Gerber Products.

At 21, he says, it didn't occur to him that he had a real choice. The idea of a writing career seemed to him “a magical sort of thing,” he says. “It was too overwhelming to think of actually doing it, and I wasn't sure I had the ability.” He felt he was simply not strong enough to resist the accumulated weight of all those back in Fremont who were waiting for him to start on his silver baby-spoon future.

Because a writing career seemed too remote a goal, Dan wanted to go to graduate school and study to be a teacher. That kind of career was also easier to explain to the folks back home. “In Fremont, you had to have a job,” he says. “Everyone got up at 8:00 and went to work until 5:00. Writers don't get up and go to an office. I told my father that I wanted to be a teacher. He said the decision was up to me. But he was encouraging me to go into the company, to get my feet wet.”

In A Voice from the River, Nick Wheeler, the heir apparent at Wheeler Industries, complains, “Nobody wanted to let me do anything, because nobody wanted to be responsible if I screwed up.” Dan Gerber's two years at Gerber Products weren't precisely like that, but the young graduate's adjustment to life at the office was clearly just as rocky.

“I remember the controller of the company calling me in one day, saying he wanted to talk to me about some things that my father might not tell me,” Dan recalls. “He was one of the old celluloid-cuff, green-eyeshade, accountant types, and he told me it was important that I arrive early in the morning at the office and that I be one of the last people to leave at night. I should wear suits and not sport coats, slacks, or loafers, and never put my feet on the desk. I remember at the time having a fantasy of standing up and tipping the desk over on top of him. I thought, ‘I've got to get out of here.’”

He started off in industrial engineering, then was given a job processing insurance claims (he hid the Camus novels he was reading inside large tomes with insurance tables and other arcanae). He also spent time in industrial relations, joining in talks with the Teamsters Union as an assistant to the negotiator. ("We were going to 'get' Jimmy Hoffa.") His last job was as a sales service supervisor, writing letters to customers—which may have left him as frustrated as Nick Wheeler, who has the same title in the novel.

While his motor was on idle at the company, he was indulging his taste for adventure, racing sports cars. On Friday nights, after a sedentary week at the office, his wife, Virginia, would pick him up, with his Shelby-American Cobra or Austin-Healey on a trailer, and off they went to races in distant cities.

Finally, Dan quit Gerber Products to continue his racing and set up a Ford dealership in Fremont. His decision brought letters and face-to-face appeals from people in the company who wanted him to stay. Dan now admits he was simply "playing for time," doing something respectable until he felt ready to pursue writing full time. At least at the Ford dealership, he was going to the office each morning and putting in long hours. To his family and others, it was honorable, productive work, even if he sometimes locked himself in his office and wrote.

His father was upset by his son's death-defying idea of sport. Dan Gerber Sr. didn't go to a race or talk to him about it for two years; his mother saw one of his races on television and told Dan she was proud of him because he hadn't scraped his tires. Their attitudes reversed when they finally saw a race: “My father thought it was something more than a daredevil activity; he got interested and met some of the people involved. My mother was horrified.”

The risks caught up with Dan Gerber one day in 1966 at a race in Riverside, California. While passing another car on a turn, Dan's Mustang was nudged and ran head on into a pit wall; it spun around, was hit by three other cars, and caught fire. “I set a record, decelerating from 110 miles an hour to 0 in 10 seconds flat, and broke every bone in my body.”

During his recovery, Dan taught college-prep English, in a wheelchair, at Fremont High. Later he became a poet in residence at Grand Valley State and at Michigan State. In collaboration with two friends he had met in college who were also novelists, Jim Harrison and Tom McGuane, he launched a literary review called Sumac and a company in Fremont that published serious fiction and poetry by talented young writers.

Dan Gerber Sr. told his son that although he was not a literary man himself, he was very proud of Dan's accomplishments as a writer. The father had never graduated from high school but after World War I had been in the first class at the Babson Institute, a business school in Wellesley, Massachusetts. Although Dan describes his father as “a very matter- of-fact guy,” the elder Gerber seems to have had many of the qualities of Russell Wheeler, who is described in the novel as “quiet and wise and unassuming.” Dan Gerber Sr., who served with the Red Arrow Division in World War I, won the Croix de Guerre for his part in a raid by French forces on a German-held village; but the family did not find out until months later when he mentioned it, as an afterthought, in a letter.

After Dan Gerber Sr. stepped down as president of the company, his successor suggested that young Dan be asked to join the board. To some conservative businessmen on the board, that must have been like inviting a bomb thrower into their deliberations. In those years the long-haired young scion was active in the peace movement on campus; at one point, he sued Michigan State to get a look at the dossier on him in the college's “subversives file.”

His mother was “disappointed” by his antiwar views, but Dan says his father, who was patriotic but no flag-waver, was sympathetic. Dan Gerber Sr. had himself suffered feelings of disillusionment after fighting in World War 1. “He was not sure we were doing the right thing in Vietnam,” his son says. “He thought the real heroes in this war were in jail.”

Dan recalls that it was a tumultuous time in his life, and that because of his anti- establishment views, he often clashed with other board members. “They may have lived to regret that they asked me to join. I found that they were making some decisions on the basis of old-boy friendships, and that wasn't in the interests of the business. I wouldn't go along.”

Initially, he joined the board out of a sense of obligation, and decided not to quit a few years later for the same reason. After a while, however, he started to get interested.

During the inflation of the early seventies, the company was in trouble. Wages along with the costs of ingredients and packaging had spiraled, but the Nixon price controls prevented the company from raising its own prices. In early 1974, the company had taken a LIFO accounting adjustment that cut into its revenues. The stock price plummeted from about $17 to $9.

At a board meeting, Dan Gerber recommended a cut in the quarterly dividend. The notion was unprecedented; Gerber Products had a consistent record of raising or maintaining the dividend. “I just looked at the numbers and concluded the money wasn't there. I told the board that we'd be kidding ourselves and other people if we didn't make this cut.”

The other directors agreed they had no choice: It would be easier to defend a cut than to declare a dividend when earnings were down. Afterward, Dan Gerber Sr. congratulated his son for thinking through the issues and recommending the cut. “I was always pleased that this had happened, that I had done something that made him proud in an arena he understood very well,” Dan says. A month later, his father was dead.

Dan's action in this situation was consistent with the way he saw his father's business philosophy. Many times executives in the company had told Dan that in meetings with his father, when everyone favored one course of action and all the evidence seemed to support them, Dan Gerber Sr. would say, “No, we're going to do it this way.” And, adds his son, “They said he usually turned out to be right.”

Once at a stockholders' meeting someone asked why the stock price wasn't higher. According to the son, Dan Gerber Sr. answered, “Well, I don't know, and frankly I don't give a damn. That's not our business. Our business is making good products and feeding babies, doing it at a profit and paying dividends to our stockholders. We're going to do that regardless of what the price of the stock is. That’s Wall Street's business, not ours.”

Dan Gerber admires that view, but now realizes times have changed and Wall Street will be served. In 1977, a Texas commodities firm, Anderson, Clayton & Co., made a tender offer for Gerber Products. What followed was a bruising battle that dragged on for months in the courts, during which, Dan Gerber says, “We had to learn a whole new nomenclature. God, when that happened, I didn't know what a tender offer was! I didn't know what an arbitrageur was!”

Arguing that any merger between the two food companies would be anticompetitive, Gerber lawyers filed an antitrust suit against the Texas company in U.S. District Court, Grand Rapids. They found a sympathetic judge in Noel P. Fox, who looked askance at the big out-of-state raider. But Gerber lawyers found something else: Anderson, Clayton had made $2.1 million in “sensitive payments” abroad that they charged were illegal.

Potentially even more embarrassing was the fact that while Anderson, Clayton was making those payments, Leon Jaworski, the former Watergate special prosecutor, was sitting on its board. At the time of the suit, Jaworski was leading a congressional investigation of illegal kickbacks paid by U.S. companies in Korea.

This bit of serendipity saved Gerber Products. Three days before the antitrust suit went to trial, Anderson, Clayton, perhaps in part to spare itself—and Jaworski—unnecessary embarrassment, withdrew its tender offer. Later, Forbes magazine, which had repeatedly criticized the Gerber board for resisting the bid, lauded the directors as “a group of flinty- eyed Midwesterners who didn't blink.”

There were more crises after that at Gerber Products. Through them all, Dan Gerber—whose occupation on the board roster is listed as “poet, novelist, journalist”—has grown into a seasoned director.

When some glass was allegedly found in jars of Gerber baby food in 1986, the scare drove the company's market share down from about 66 percent to around 53 percent. A more fundamental problem was that Gerber had diversified into related businesses—strollers, diaper pins, pacifiers, piggy banks, children's furniture—that turned out to have low profit margins. The company was hurting. It lacked leadership, and once again it was talked about as a takeover candidate.

Dan was a member of the board's search committee that found the man who came to the rescue. He was David Johnson, who as president of Entenmann's Biscuit Co., had taken that company from a regional to a national brand. Under Johnson, Gerber Products divested those businesses that weren't bringing a large enough return, or that management felt were distracting them from their core business. “We got our brand share back, and then some,” recalls Dan.

Earlier this year David Johnson was hired away to become CEO of Campbell Soup, a family-owned company that hopes he can lead them in a similar turnaround. He was replaced at Gerber Products by Alfred A. Piergallini, who had been president for only eight months. Dan Gerber feels that Johnson was a visionary who reignited the company and got it moving, but that the 43-year-old Piergallini, a solid manager who is good one on one, is the right man for the job now.

Dan Gerber's father would have been proud. The son is now deeply involved in the company's new directions. One problem the baby-foods business has always had, the father used to say, is “We lose thousands of perfectly satisfied customers every day.” Babies, obviously, grow up. Dan Gerber says the company is now trying to keep them as customers a little longer by developing toddler foods and introducing products for older children such as microwave meals for school lunch buckets.

The work of directors has gotten a lot harder. Dan goes to five board meetings a year, each normally lasting two days. He attends several executive committee meetings and also serves on the management-development compensation committee. "On average, I'm involved with some aspect of the business every week," he says. “David Johnson and Al Piergallini have been very solicitous, often asking my opinion, maybe because I'm a kind of link with the past and the corporate culture.”

A brother-in-law, Harrington M. Cummings, also serves on the 12-member board. Cummings, a Harvard MBA, brings a more analytical approach to board discussions, Dan feels, while he relies more on “instincts.” Dan's 24-year-old son, Frank, is a salesman for Knight-Ridder Newspapers' VU/TEXT database in Philadelphia. Dan says Frank has his grandfather's good business instincts; he wouldn't be surprised if Frank eventually came back to work for the company. Dan is also proud of his two daughters, Wendy, 28, a graduate chef, and Tamara, 21, who wants to be a veterinarian.

Despite his involvement as a director, Dan Gerber, has stuck to his true vocation: writing. He has no secret yearning to run Gerber Products. “If I had not chosen to be an artist, maybe I would have been Russell Wheeler,” he admits. But while his work on the board has been fascinating, he says, it is also a distraction. “When business takes me away from my work, I have to go back and search for my characters. Because they're not interested in this, you know. They tend to wander off when I'm not writing. I've got to go and catch them.”

Seen through the lens of time, Dan's early struggle to assert his independence and pursue his ambition, while not alienating his family and friends, may now seem distant and far less painful. Nick Wheeler in Dan's novel has not yet handled his angry feelings or begun to appreciate the motives of those around them, least of all his father's. Dan Gerber, his creator, looks back on these battles with the equanimity of one who has reached the half- century mark.

His father never really pushed him too hard; Dan Gerber Sr. conveyed to his son that it was more important to love what he was doing than to achieve worldly success. He gave his son, in Dan's words, “plenty of space.” The pressures of the community were perhaps more intimidating. But Dan didn't want to live a preplanned life. If he had met everyone's expectations for him, he feels, “the whole outcome would have been, ‘So what? He did what was expected of him.’ It would not have given me a great sense of accomplishment.”

Clearly Dan continues on the Gerber board because he feels that the company and the human values it stands for are important to him. He was thrilled by the way people at Gerber Products pulled together during the battle against Anderson, Clayton. “I am proud of our people and the sense of caring in the company.” Recently, he noted, 30 employees in research volunteered to produce, on their own time, a meat-based formula for a severely handicapped teenager who would die without it. “I enjoy this spirit of people working together in a common endeavor that shows through in moments like this. I want to help make sure that Gerber Products remains independent, continues to be successful, and stays in Fremont.”

Dan Gerber seems to have made his peace with himself and with the Gerber business legacy. He has pursued his first love, while helping to assure the survival of an enterprise that still bears the family's strong imprint. In both the business and in his books, his father remains a strong presence.

The father's last words were fitting for a man who had spent his life feeding people, and whose family always enjoyed spicy foods and endless cups of black coffee. “The only thing I'll miss,” Daniel Gerber said as he lay dying, “is the spaghetti your mother is cooking today.” Says his son, the novelist and poet, “I hope I have an exit line that good.”

THE DILEMMA OF SONS

Russell, in the novel, lies awake of night thinking about the causes of Nick's failure:

Wasn't there some proverb, he wondered, about the son having to go out and seek something the father never found, and that if the father had found it, the son would be denied that possibility in his own life? Was that what it was to be born dead, to have the end given to you at the beginning? Or did it mean that the son had to seek in another direction? ▪

Howard Muson is a writer, editor and consultant, and former editor and co-publisher of Family Business Magazine.

Source:  Family Business Magazine, October 1990

Copyright © 1990. Family Business magazine. Subject to the provisions of the Terms and Conditions of the Family Business Web Site, subscribers to Family Business magazine may print and distribute copies of this article, electronically or otherwise, provided that (a) such printing and distribution is done only for your personal, informational, non-commercial purposes, and (b) you do not re-move or obscure the copyright notice or other notices. For other uses, including reprint permission for non-subscribers, contact Family Business magazine.