The Ties that Bind: How One Family Business Defied the Odds

Audio Description

Which “money messages” have helped this 102-year-old family maintain cohesion where other family-owned businesses have frayed? How have they used open communication to pass down values and keep the family on track? Kim Duchossois, who chairs her family’s foundation, reflects on humble beginnings, transformational giving—and how they’ve passed down wisdom and perspective from older generations.

Transcript

00:03 - 00:37

Welcome to Women & Wealth, I'm Beata Kirr, the Co-head of Investment Strategies at Bernstein, and this show aims to educate and inspire women to make the right choices for their wealth. As the COVID-19 outbreak unfolded, we pivoted to focus on the immediate impact to your wealth and well-being, but as time has gone on, we're also seeing the importance of nurturing strong family bonds and passing down the wisdom and perspective of older generations.

00:38 - 00:48

That's why I'm delighted to share our heartfelt conversation I had recorded with Kim Duchossois prior to the crisis. In fact, that conversation has become even more relevant today.

00:48 - 01:06

She talked about the role that philanthropy and communication in particular have played in helping her pass down values in a family with the successful 100-year-old business. So let's start with the business. First, let's hear your story.

01:06 - 01:25

You told me you published a centennial book on the story of your family, so maybe you could give us some sense of what's gone on over the last hundred years in the Dutcheswa. I'm happy to. But I want to first disclose that I am not a member of the family that has been in the operations aspect at all.

01:25 - 01:47

My first real dive in was being literally handed, the role of president of the foundation, and I had no formal training. But with that I was also concurrently welcome to the board of directors with my sister and another brother who is now passed so that we could learn by observing and by participating on that level.

01:48 - 02:02

So I take no credit for this Centennial book. 100 years is a lot to talk about. I think 10 years is a lot to talk about. How many generations so does your family represent? Well, right now, living we have four.

02:02 - 02:37

OK, so this included, however, because it began with my mother's father, my grandfather and her brother, we had in all reflected five generations in the story. So Grandpa Thrall had a repair shop and it was in Chicago Heights, Illinois. And it was a very small operation. And my father also, I was so proud of the fact he took the picture of the very first shop. It's a shed, literally a little shed, and we all have it in our offices to reflect upon the humble beginnings.

02:37 - 03:09

And so from there, fast forward to post-war, when my father and my uncle, his brother-in-law, got out of the service, they were welcomed into the family business in a capacity of leadership. And my father hadn't been to business school, nor had Uncle Terry, but they had an opportunity before them to come in and grow the business. And my father is an entrepreneur in his blood and bones, and he's also a strong leader and determined.

03:09 - 03:41

And he just grabbed hold of it. And from there, the business continued to evolve and they became a prominent railcar manufacturing company. So fascinating. When we first met, what really struck me about your family is the great lengths that you have gone to to document and pass down information. And that's why I'm so excited to talk to you, because it's not an easy thing to do. And documentation, I think, is a large part of how sometimes the values can get passed down.

03:41 - 04:04

And so that's just one example at the very outset to really help us think through that. I mean, the stats on family owned businesses really show that it's not likely to get to even the third generation, let alone the number of generations that you've had represented and to continue to have the means to give. So your family has really defied the odds.

04:05 - 04:37

And in addition to of the documentation aspects, do you think there's other things that have been the driving force behind that success? It always makes me smile when people talk about the statistics because my father will repeat them over and over and over to the other generations, meaning just his growing siblings who are now aged and and his adult grandchildren. And without really recognizing that we get it and we have gotten it from day one. And so I find it comedic sometimes that he goes through it because that's where his head is always.

04:37 - 05:12

And he and my brother Craig, who became the CEO under him when dad moved over to the focus on Arlington Park. Craig and Dad's work ethics were always visible to the next generation, to the third generation, as little people. But then as they got mature enough to really observe it in a different perspective, knowing what it meant. And my brother reminded me recently, too, of how often we were taken to the office. We had stepped up from that shed I referred to before and had an actual small office, and he'd take us out there even on Sundays because he was working.

05:12 - 05:21

But we get to be exposed to it and and play with the typewriters and all. And we knew that dad's priority was his business.

05:22 - 05:53

Were there particular what we call money messages that your family passed down in addition to the statistics that you joked about, but in addition to the fact that there was this pressure of, well, most businesses don't make it this far. Were there other common phrases that you remember being said all the time? Yes, but this was relative to what I'd hear my dad say in a boardroom or it wasn't dinner table talk. And actually, I'm envious of families that did have so much of that because dad's generation, they may not of course, all be alike.

05:53 - 06:27

But he was not transparent in today's world of what we demand. Right. We want transparency in all environments. And he sort of kept his head down and didn't talk to us about philosophy and things. There were perhaps mottos. And he definitely would say, never chase the dollar. It's the customer and the market that you must be keen on and understand what their needs are first and deliver and provide excellent or exemplary customer service. And with that will come the dollar.

06:27 - 06:38

So that was one lesson I recall a lot. And then another one that he would say all the time is don't expect what you don't inspect. And now that would be table talk.

06:38 - 07:07

What does that mean? That is, I think what you don't it might have come from the military, frankly, and it's that... I've been caught in this, actually. I remember distinct times when I have had an experience of not thoroughly vetting something before I have recommended it. And it comes back to you and you say, boy, I didn't do my homework at all. So that even as much as, don't open up that gift that you ordered from Amazon, I mean, don't give it before you open it up and make sure it's what you ordered, right.

07:07 - 07:23

Don't regift it. Don't share it. It's never chase the dollar. Follow the customer and the client's needs. And that's sound wisdom from the corporate perspective. And then don't expect what you don't inspect, which applies everywhere.

07:24 - 07:57

I love those and I haven't heard those before. Thank you. So you mentioned a few times, obviously, your father, your brother, you talked about how you stepped into the role of the family business in the philanthropic arm. And that leads me to this question of obviously generational differences. But what's your observation on maybe gender differences and how gender differences played out, again in a different era maybe, years ago? But today, tell me about that. Did you notice anything?

07:57 - 08:09

I actually love talking about this because the evolution has been telling to me. Honestly, I felt, and so does my sister, who is seven years my senior, felt very patronized as we were growing up.

08:09 - 08:34

Relative to finding a professional role, education was taken for granted that we would go on to college, but a postgraduate degree wasn't even an expectation. But if I could follow up, you were not groomed while your brother was. My brother happened to by the time he grew up out of the college shenanigans, yes, he went on for his MBA and he did have his sights on coming into the company and did receive that opportunity.

08:34 - 08:36

Right. But he worked at the bottom and worked his way up.

08:36 - 08:40

Yeah, he was. But it left off there. Yeah.

08:40 - 09:14

So the next sibling is a girl, then another boy, and then myself, I'm the baby of them all. And the girls truly were just... different expectations. Didn't have any expectations. If any. Don't let Dad hear me say that. OK, is he going to listen to this episode? No, no. No professional aspirations were encouraged or talked about. Yeah. And how does that vary now with the next generation? Dad has had some enlightenment. He has seen the strengths. I'm so pleased that he's, so he's 98, and he's still alive and well, very cogent.

09:15 - 09:46

His forgetfulness is about on par with mine, which is pretty good, not good for me but good for him. But he has recognized that there had been some strong leadership skills that have been developed within the family, but he sees it also and he can't help but see that in other industries and other meetings and encounters he has, and he is well read and he can see that women have enormous capability and are really coming up in their leadership prevalence.

09:46 - 10:13

It's hard to blame them because for 100 years, right, he's 98? 98. And all the guests on our show have talked about, kind of regardless of their situation, even how different things were 10 years ago, 20 years ago, let alone 50 years ago. Sixty years ago. And there's been enormous change in the world and enormous change in the corporate environment, of course. So it's not that surprising to me. But I appreciate that. I appreciate your honesty.

10:13 - 10:44

And I'm also excited to hear that there's been an evolution and you're, the next generation that follows you is in a completely different place. And may I add, what I didn't want to forget is that I was over the moon when I found out that one of the top candidates for the new CEO position in LiftMaster, Chamberlain,   was a female and they thoroughly vetted. It was a very important role, as you can imagine. And this woman rose to the top, but she was also a former Navy officer.

10:44 - 11:10

Wow. And that alignment for my father was definitely part of, I think, his enticement into giving her the opportunity. So that's been about six years, maybe longer. And for him to embrace a female in a leadership role in his baby was, I think, very positive. That was sort of like, OK, we've made it. Yeah. Yeah, I love it. I love it.

11:10 - 11:43

OK, so your family has done so many interesting things. One of the things you mentioned to me that you do as a family is something you call a family council weekend. So the family council sort of bubbled up from our participation at Northwestern Kellogg Center for Family Enterprises. That's a fabulous resource for anybody who hasn't jumped in to explore that, because that was sort of the base of all of us getting started. So Family Council is an entity that my father will continually remind us does not tell us what to do. It does not manage the business.

11:44 - 12:12

It is an informational, educational, and social opportunity. We usually have a two and a half day weekend together. It can be local or we choose a place to go. And we have a president of the family council and they develop the agenda with an executive committee. It is in one way very casual and informal, but in another very organized. And oftentimes it's an opportunity for, again, another resource to come in.

12:13 - 12:23

What excites me so much is that the next generation below my children, which is the fourth generation, the oldest is now, I think she just turned 14, and then our youngest is five.

12:24 - 12:53

So many resources out there now that help with succession and training of the little guys and they develop fabulous programs. They are a lot of fun for the kids. And while we are doing other types of adult meeting or education, they are handled completely by other resources that develop beautiful things that eventually segway into learning about fiscal responsibility, school responsibility, civic, all of those kinds of good things that you want your children to learn.

12:53 - 13:11

So the age ranges from five to 95 from your family. Yeah. And then how many family members is that? I think they're 32 of us. OK, yeah. And so it's just your family that attends but then you're leveraging outside resources to present on the topic of the moment. How do you choose the topics?

13:11 - 13:44

It's you know, it's a collaborative discussion beforehand and it also includes an update because two of the family members, actually three, are involved actively in the company now. Everybody in the first, second and third generations are shareholders. So it's time to inform beyond our annual shareholders meeting where we hear from different execs and such. This is a time where family can have intimate discussions, talk about issues including philanthropy. The Family Foundation does not have the entire family.

13:44 - 13:48

It's an option to participate and you have to qualify for it.

13:48 - 14:03

But we could still talk about things we don't as a company want to invest in, you know, social and moral things. It's really a fabulous opportunity that I think everybody pretty much looks forward to participating in. It sounds amazing.

14:03 - 14:25

And I was actually going to ask you if there were some common themes in terms of the topics and you just hit on one that is very common from families that we hear about, which is the notion of socially responsible investing and whether that's corporate social responsibility or actually how you're investing the dollars and the assets of the family. Has that been a theme that has surfaced recently?

14:25 - 14:47

Big time and last family council meeting actually took place locally and we were in the offices. And what really excites me is the awareness that our investors, the capital side of the house, want to know from the family. Where our priorities lie and what constitutes socially responsible investing or behaviors

14:47 - 15:07

It's not a black and white. So that is an ongoing discussion and we're all really excited about it. And that is a major generational shift. And what we see a lot is the millennial generation, and frankly, women are the driving force behind many of the questions. And it's becoming so pervasive on both sides.

15:07 - 15:24

Let's pivot to talking about the family foundation, as the chair. So first, tell me about the foundation. Tell me about your mission. OK, I want to hear about some of your recent giving, some real transformational grants you've made, but first tell me how you think about the foundation and its objectives.

15:24 - 15:50

OK, well, first I want to give a nod to my niece because under her leadership, there has been tremendous evolution. Finally, when dad was ready to relinquish the control, we immediately, I mean, immediately put in our implemented governance and leadership and we revoted for those who were interested and went through qualifications.

15:50 - 16:10

And from there, she and the former executive director who stayed on, thankfully and had worked with me for a lot of time, did a lot of housekeeping and did a lot of research and cleaned up shop and made it a much more formal structure. And we went to task. And you've gone to task in a big way, from what I can see.

16:10 - 16:37

And what is most visible in the Chicago community certainly is your recent transformational gift to the University of Chicago Cancer Center and the founding of the Duchossois Family Institute. I think it was 100 million dollar gift. So tell me about that process of coalescing around such a transformational gift. Thank you. Because I welcome the opportunity to explain how that evolved. I thought the process was a remarkable one.

16:37 - 17:05

And I am so grateful to the University of Chicago because we developed a more solid mission once Ashley was in her role as president. And health and wellness are two of the areas that really are a focus for us. And several members on the board were able to articulate to the powers that be in development and also the leaders in the sciences division at University of Chicago,

17:06 - 17:13

she was able to articulate for them what was of interest to us in that great big world of wellness.

17:13 - 17:45

And concurrent with that, we had a yearlong series of meetings with them where we got the whiteboards out and we did a lot of diagramming and a lot of brainstorming to actually try and frame it. And they have superior people working in development who were able to, I think, help us translate even further what would work for both parties. That was really significant. And you mentioned transformational.

17:45 - 18:02

We had considered transformational gifts in the past and one of our first transformational gifts was to the University of Chicago early on to build the Duchossois Center for Advanced Medicine. So that started our big foray into gifts that can transform versus transactional gifts.

18:03 - 18:31

And so they were very respectful and very earnest about what kinds of things were already in the pipeline for them that would fit our goals of really researching not just cancer, but immunology and genetics and all of the things that their beautiful data system was already building to great heights, that all of that could work together in some way, shape or form to truly advance the ball.

18:31 - 19:01

And so it was one of the most beautiful, I think, opportunities and experiences with the foundation directors. Remember, that's all family members, three generations sitting around the table in consecutive sessions to get to this gift. And I want to importantly say that the foundation's contribution was 50 million. But my brother Craig and his wife Janet, who have also been tremendous supporters, and he's also been on the board of trustees for some time at University of Chicago.

19:01 - 19:08

They also contributed, they matched the 50. But I'm also thinking about what you said about the three generations in the foundation.

19:08 - 19:25

And I'm referencing prior conversations we've had about how philanthropy can often be the best bridge to pass down values and to educate that next generation. And it sounds like this is really a story in many ways that coalesces around that. It does coalesce around that.

19:25 - 20:00

But at the same time, as you were repeating what we have talked about before, there can be a lot of diversion within the family, within the generation, within the multi generations, within the genders, just even where they live, whether or not it's of import to them and may not be of import to someone else. So, again, it's not a new idea that family foundations can bring families together, but in our situation, it truly has. It sounds like there's a lot of hope that you have for the next generation and the continuity of your family legacy.

20:00 - 20:22

And why wouldn't you, you both in the operating business and in your philanthropy, is that a fair assertion? Well, thank you for that, because I think that to the credit, again, of the third generation, those that are upcoming and, but they're all mature adults, they're all, the youngest is 34, and the oldest, I believe, is probably 46, 47.

20:23 - 20:57

They really understand how important it is for their kids. Everybody but one has a family, has children, two or more. What parent isn't thinking of their child as a priority to have really, really good value system and a good, strong work ethic and appreciation for if you have privilege, financial privilege, it's your responsibility to give back, and to uplift, or to help, or to learn, or to teach, whatever it is that you choose to do. It's a responsibility and privilege.

20:57 - 21:21

You actually preview the answer to my next question, which will usually close our episodes asking about funding your favorites and what that means to people. But I think your entire story is about finding your favorites, right? But tell me more. How do you translate that? How do you prioritize what's meaningful and really internalize that? It's a great question and I think every family would answer it uniquely.

21:21 - 21:49

But what we have that allows us to fund our favorites is independent gifts, just like anyone who would tithe at church or do whatever. Each family can choose, to the degree that they are capable, any of their favorites, they can bring the suggestion, if it fits within our guidelines, to the table or make the suggestion and the discussion is there. But they have opportunities to give independent of the foundation.

21:49 - 22:05

Well, it sounds like that's a very smart way to reconcile. One of the things we talked about, which is, like you said, generational differences and priorities and favorites, gender differences, but then coalescing around real transformation through your mission statement work and you've been able to bring people together in that way.

22:05 - 22:20

And so that's wonderful. It keeps you on track. Yeah. I know I said that would be my last question, but I've just got one more. I could talk to you the whole day, frankly, but it sounds like it's come through a lot in your responses to my questions.

22:21 - 22:48

You've really leveraged outside resources. Would you say that, you know, in terms of your family's success, whether it's in the business world or in the philanthropic realm, and just being able to further longevity, would you say those outside resources and council have been a large part of that? And in addition, what else would you want to reference? Honestly, I think that some of the outside resources have been, to use the word, again, transformational for us.

22:48 - 23:13

I am so grateful that my brother Craig recognized that early on in his leadership of family as well as leadership of the business, that we don't ever have all the answers. And it became, and when we sort of live in a wonderful era, because this education of family enterprise as well as family philanthropy and independent philanthropy, as you know, this is your line of work,

23:13 - 23:21

it has blossomed in a place that I didn't even recognize when I started in the 80s. It has grown so much.

23:21 - 23:52

So there are very qualified people externally that can help the internal dialogue and help you organize and help you become more informed and also introduce you to networks if you're starting. That's what's exciting, too. If you don't connect with somebody, if you really don't have another person that has a family foundation or has had some experience with it, you can reach out to a professional and they can help you get involved and engaged in the network. I can't say enough about outside resources.

23:52 - 24:26

Now, you have to be careful and you have to vet. But there are qualified, genuine people out there who truly feel wonderful about teaching you and connecting you and guiding you throughout. So I can't say enough about that. It's been very helpful to our family. Very. That's wonderful to hear. Well, thank you so much again, Kim, for joining me today on a foggy day here in Chicago. I really want to wrap up our discussion and say I've learned a lot just in the 30 minutes we've had together. I've been taking notes of some of the most interesting things you've said. And I'm going to go back to the quotes.

24:27 - 24:35

I love the "Never chase the dollar," and the customer and client is always first. And don't expect what you don't inspect.

24:35 - 25:03

Those are really good mantras to live by and the corporate or philanthropic world. And then the importance of communication across generations to keep 102-year-old family on track, whether it is your book commemorating your 100 years, whether it's your family newsletter, we didn't talk about it here, but I know you also have one, your family council weekend, or the process with which you pursued very important transformational giving in the foundation.

25:03 - 25:17

It's clear to me that that's what you said, that identifying your values and passing them on, you can't expect to think of them in your head and then they will persist. You've got to get them on paper, and you got to get people together and aligned on them.

25:17 - 25:45

And that is very valuable advice. So, again, I thank you for that. So for our listeners, please don't forget to subscribe to Women & Wealth, and if you want to reach out to us, you can reach us by e-mail at WomenAndWealth@Bernstein.com and on Twitter at BernsteinPWM. Bernstein: Making money meaningful for individuals, families, and foundations for over 50 years. Visit us at Bernstein.com.

Hosts
Beata Kirr
Co-Head—Investment Strategies

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