It won’t stop at softwood

It won’t stop at softwood

Mary Janigan April 22 2002
It won’t stop at softwood

It won’t stop at softwood

Mary Janigan April 22 2002


New bosses are emerging at key Atlantic firms-but the names are familiar



How do you make the world notice a 130-year-old company that’s never really left small-town New Brunswick? For Canada’s oldest independent fine chocolate-maker, the secret is a fresh, 29-year-old face with a familiar last name. Meet Bryana Ganong, the great-greatgranddaughter of Ganong Bros. Ltd. cofounder James Ganong. She grew up in St. Stephen, within sight of the family’s factory. After high school, she left to attend a series of universities and see some of the world, then, four years ago, returned to join Ganong’s marketing department. Now she smiles out from the company’s print and television ads, her well-scrubbed features serving as the public face of the firm’s plan to penetrate bigger markets beyond Atlantic Canada. “This new public role takes some getting used to,” she concedes. “But I’m the fifth generation of our family in the business and this feels very natural.”

Good thing she feels comfortable. There’s no free ride for the scions of Atlantic Canada’s rich corporate clans. If your last name is Irving or McCain, Sobey or Jodrey, Ganong or Oland, you can forget about kicking back and working on your short game at Pebble Beach. Your birthright, along with untold millions in the bank, is an awesome responsibility: to keep the family empire running smoothly for the generations to follow. Bryana may well insist she’s just a mid-level manager. But Down East they like to keep business in the family; with the exception of the provincial telecommunications and power utilities, virtually all of the region’s big corporate entities are family-owned firms that haven’t surrendered control or profits to outsiders. “It’s the Maritime culture,” says Larry Armstrong, director of the University of New Brunswick’s Centre for Entrepreneurial Leadership and once head of the Irving family’s Saint John, N.B., shipyard. “Elsewhere, it’s more about

building companies and selling them off.

Here, most entrepreneurs want to control their own destiny.”

And the new generations bearing those old names seem as

determined as ever to keep it that way.

That’s always a challenge, even if the big Maritime business clans have generally managed to refute the normal pattern for North American family-owned firms: one generation makes the money, the second generation manages it, the third blows it. But the sixth generation of the Olands— who trace their business roots to 1867 when Susannah Oland began brewing ale in her backyard—now works at Moose-

head Breweries Ltd., the family-owned business in Saint John. That’s one generation better than the multi-billion dollar Irving family empire, which got its start when Kenneth Colin (K.C.) Irving’s father James opened his first sawmill and general store in Buctouche, N.B., in the 1880s. The fourth generation of the secretive Jodrey family—which controls a

$300-million conglomerate from tiny Hantsport, N.S.—shows no sign of slowing down. The same goes for the third generation of the Sobey family of Stellarton, N.S. Although they’ve taken their companies public, the Sobeys still exert boardroom control over $ 11-billion Empire Co. Ltd., which holds sprawling grocery, real estate and investment interests throughout Canada. “The real test for any familyowned business,” says Robert Blunden,

who teaches management at Halifax’s Dalhousie University, “is handling intergenerational change.”

Most of the big Adantic family firms have passed that test with flying colours. Bryana Ganong, for instance, can follow her lineage straight back to James and Gilbert Ganong, who opened a small retail and grocery store in 1873 and tried selling oysters and soap

before they turned to chocolates. The confectioner’s next president, Arthur Ganong, by family legend used to eat two pounds of the firm’s candy a day. His successor, Bryana’s great-uncle Whidden, only scarfed down a pound a day. He still managed to show up for work in St. Stephen for 73 years. That kind of longevity bodes well for the current president, Bryana’s dad David, an energetic 58-year-old.

And consider the Irving empire, which K.C. technically handed over to his three sons in 1972 when he moved to Bermuda to avoid the Canadian taxman. In his will, K.C. stipulated that his boys, J.K. (James), Arthur and Jack, also had to live out of the country if they ever wanted to inherit the family businesses. So far there’s no sign that the boys, all in their seventies now, are going anywhere: eldest J.K. is still chairman of J.D. Irving Ltd., which holds most of the

family’s mammoth pulp and paper operations in eastern Canada; despite a recent bout of prostate cancer, Arthur remains president of Irving Oil, which recendy underwent a $1-billion expansion of its Saint John refinery; Jack, the youngest of the trio, is said to play less of a role in the company businesses but still lives in Saint John.

Their children, though, have already taken up the family torch. “You have to admire the job the family has done passing on the same goals and values to whomever comes next,” marvels one close Irving associate. The generally acknowledged leader of the current wave is J.K.’s son James D., the oldest son of an oldest son in a family where seniority counts for a lot. At 51, he runs the day-to-day affairs of J.D. Irving as president. His younger brother Robert is also viewed as an up-and-comer; he runs Cavendish Foods, a frozen food line, and is president of Irving Tissue, which last year made a leap into the big leagues by buying Procter & Gamble’s Toronto tissue plant. J.K.’s daughters—Judith, who owns New Brunswick’s biggest public relations and marketing firm, and Mary-Jean, who runs packaging plants in Prince Edward Island and New Brunswick—are also in the family business.

But in this male-dominated clan, they’re unlikely ever to carry as much clout as their cousins, who are equally well-represented throughout the Irving ranks: Arthur’s sons, Arthur Leigh and Kenneth, both work for the oil arm; Jack’s oldest son John, who holds a Harvard MBA, helps Jim Jr. run the publishing division. Even the first member of the newest generation has joined the empire—Jim Jr.’s oldest son, Jamie, 24, who holds a masters in journalism from New York’s Columbia University, was recently appointed a publisher of a new chain of weekly newspapers the family has bought to go with their existing media holdings, which include all of New Brunswick’s dailies.

So far, the Irvings have managed to avoid the internecine rivalries that can occur as families become larger and more tangled with each passing generation. They don’t have to look far to see an example. Their super-rich neighbours, the McCains of Florenceville, have never fully recovered from the Shakespearean clash of wills between brothers Harrison and Wallace McCain over who should eventually run McCain Foods Ltd., the multinational food processing giant they founded. In theory, the momentous family feud ended

when Wallace was ousted as co-CEO in 1994 and decamped to Toronto with his sons Scott and Michael (the latter his candidate to be the next head of McCains). That left Harrison, now 74, free to appoint his nephew Allison McCain—son of his late brother Andrew—as deputy chairman, making him the heir apparent. But Allison has a hard job: Wallace, 72, now chairman and majority shareholder of Maple Leaf Foods Inc., still owns 33 per cent of McCain Foods’ shares. And the wounds from the breakup are still painful.

No wonder the succession issue preoccupies so many of the region’s business families. The good of the company—not

who ultimately runs things—is what really counts, says Derek Oland, 62, chairman and CEO of Moosehead, Canada’s oldest independent brewery. So he recruits the best management expertise he can find, no matter what their last name is. The president is Bruce McCubbin, an engineer who joined the company in 1997. And Oland leans heavily on a high-powered board of outside directors that includes former Noranda Inc. president Courtney Pratt and Sir Graham Day, a Nova Scotian who ran some of Britain’s biggest enterprises and is now chairman of Torontobased Hydro One Inc.

For now, Derek’s two sons—Andrew,

34, sales manager for New Brunswick, and Patrick, 32, manager of financial planning and projects—are just young, up-and-coming Moosehead execs trying to make their mark. “I hope one of my sons will succeed me,” he says. “But no one should take a job knowing they are going to be the president.” The way his sons tell it, that takes the pressure off bearing the Oland name. “We can have successes and failures like other employees,” says Andrew, who has a Harvard MBA and started out working in the company’s bottling plant. “Bruce has set a precedent for the future: the family can still be the majority shareholders but they don’t have to be the managers.”

That doesn’t mean the Olands intend to relinquish any control—far from it. On this subject their thinking is the same as the region’s other business clans: going public, besides diluting family control, means the most important corporate goal becomes maximizing short-term shareholder return. And families that have owned and operated businesses for generations are, most of all, long-term thinkers. It is hard to imagine, for example, a CEO of a $ 100-million company standing up at a shareholders meeting and saying, as Derek Oland did in a recent interview, “We don’t want to be the biggest—we want to be around the longest.”

Perhaps only in the Maritimes, moreover, might you find a company like Ganong. In trying to expand their markets, the family know full well they should probably relocate somewhere closer to the action than far-off St. Stephen. But they stay there anyway. “We’ve made a commitment to this community and they’ve made a commitment to us,” stresses Bryana Ganong, who may some day run the company. “Maybe it hasn’t always made the best sense. But staying here is what we’re about. It makes us special.” And it may help explain why the family firm still reigns supreme in Atlantic Canada. El