Gund Shows How Family-Owned Businesses Can Succeed

In St. Louis, Missouri, fourth-generation, family-owned manufacturer Gund Co. has averaged an 18% annual growth rate over the past decade. It also hasn’t had a single layoff in 75 years (The Wall Street Journal, subscription).

The company: The manufacturer of engineered materials solutions counts Rockwell Automation and General Electric among its customers and is approaching $400 million in sales.

• The key to its success: “a leadership model that puts The Gund Co.’s 1,300 employees’ well-being over short-term profits,” according to CEO Steve Gund, whose grandfather started the business in 1951.

How it works: The model requires trade-offs and significant discipline; for example, the company staffs “sparingly” so that it can withstand leaner times.

• Workers are encouraged to voice concerns on publicly posted cards, and all team members must create career-development plans.
• This year, Gund spent tens of millions of dollars to buy back shares in its existing employee stock ownership plan so it could relaunch the program in all the countries where it operates.

Why it matters: Gund offers an example of how investing in employees can become part of a company’s long-term business strategy as manufacturers work to recruit and retain skilled workers.

An influential model: Gund’s approach has attracted hundreds of executives from other companies who have visited to learn from its experience.

• “Many … want to see if the Gund way could future-proof their own businesses,” many of which were founded by their parents or grandparents.
• “The sustainable way” to maintain a family business, Steve Gund said, is to build it “around a larger sense of mission, both for its workers and future generations of family owners.”

People first: Gund began implementing its people-first strategy in 2015, following a conversation with Bob Chapman, CEO of another family-owned St. Louis business.

• Gund told Chapman that he found it more fulfilling to help people in need than to run a company, and Chapman suggested that he could help people by employing them.
• Gund has since developed a 12-step management playbook involving a “parental level of care” for his workforce.
• The company also posts its financial details in all facilities, while supervisors regularly walk the floors, asking workers what aspects of their jobs are going well and what could be improved.

From the MI: “Attracting talent is only part of the equation. Manufacturers also need to create workplaces where employees can develop their skills, see opportunities for advancement and build lasting careers,” said Lexi Champion, national director of STEP Ahead at the Manufacturing Institute, the workforce development and education affiliate of the NAM.

• “Workers stay where they feel seen, heard and invested in, and Gund Co. has done an excellent job creating that culture.”