Our guests on today’s show are Michael Ottenweller and Terry Hanson, of Ottenweller Company, a medium-sized fabrication and machining company headquartered in Fort Wayne, Indiana. Ottenweller is a 108-year-old fourth generation family business. I spoke with Michael and Terry about how a family business can grow and thrive for over a century and continue to find new quality talent.

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Ottenweller Company was started as a blacksmith and iron repair shop in 1916 in Fort Wayne, Indiana, by Michael’s grandfather, Ed Ottenweller. During World War II, the company made truck parts for General Harvester, which had a truck plant in Fort Wayne. They also made components for General Electric, which was making specialty motors for military applications. After the war ended, Michael’s father, who was a General Electric Engineer, came on to run the family company. Over the years, components for the construction industry became one of its most significant businesses. During the RV boom in the 1950s, Ottenweller got into putting trailer hitches on cars and trucks, a job that Michael participated in as a teenager. Today the company has a diversified customer base in markets such as construction, energy, life sciences, forestry, and defense. 

Michael was the sixth child of 11, with five brothers and five sisters, but he was the first of his generation to join the business. Most of his siblings went on to have successful careers in professions such as medicine, law, and academics. Growing up, Michael was less interested in school than his siblings, instead gravitating to the family’s blacksmith shop and mechanical applications. Though he was a mediocre student in high school and college, he majored in mechanical engineering at Purdue, finishing with an associate’s degree at the Fort Wayne campus. He says he can relate to young people today who prefer to work in the trades rather than “book learning,” which they are pressured into by today’s typical school curriculums. 

When Michael started at the company he gravitated to managing the shop floor. Nancy, his younger sister, after getting a degree from Indiana University, took on the responsibility of managing the company’s finances. Gary, Michael’s youngest brother, is the only other sibling to join the company. He heads sales and marketing. 

As the oldest, most experienced sibling, Michael eventually assumed the role of President when his father exited the business in the 1985. He and his brother and sister, eventually bought their father out. Michael describes the buyout process as a “handshake agreement.” He said the process was more or less an agreement that after his father retired he would continue to receive a paycheck until he no longer needed it. 

Michael says trust is a vital factor for a family business to sustain itself through generations. He says, unless a company is making significant returns, it is hard to manage succession solely based on financial compensation. In the ‘80s and ‘90s Ottenweller grew rapidly, modernizing its equipment, expanding its geographic reach, and doubling its workforce from 75 to 150 employees. Michael says that by delaying compensation for the older generation that was selling out, it enabled the company to have capital to invest in modern equipment and grow.

In 2005, the fourth generation of the Ottenweller family entered the business, using a similar type of transition as its predecessor. Though Michael is still involved in the company, his son David is now President, and his sister’s son Kevin Dwire is Vice President. They have overseen the company grow to 250 employees, 50 of whom are in a new satellite location in North Carolina.

Michael’s brief summary of the transition makes it seem like an easy process, but he admits that succession has important nuances to take into account. The company did employ a business succession consultant for guidance. 

Michael first reached out to me after reading Lloyd Graff’s blog, “Where have all the Men Gone?” The blog had explored the difficulty for many young men in the United States to find a good career fit. He suggested we have Terry Hanson, Ottenweller’s head of Human Resources, join the interview to talk about the company’s efforts to recruit talent.

Terry is a worldly charismatic guy, who cut his teeth in HR, being charged with recruiting staff for Obama’s 2008 Presidential campaign and later leading other staffing roles for the Obama administration. He lived in Australia for a time and started a small bar in his hometown of Chicago with some family members. His wife, who hales from Fort Wayne, lured him there to raise their family. Terry says when he visited Ottenweller Company he immediately loved the company’s energy and connected with the people working there.

Terry has spent a lot of time involved in Fort Wayne’s Ivy Tech Community College. He puts effort into exposing the area’s young people to opportunities in the trades. He hopes his efforts will attract smart young people to come to work at Ottenweller. He also says the company has found some great employees who were unsatisfied in other industries such as food service or retail. Ottenweller has a paid internship program to grow its own talent in-house.

Both Terry and Michael stressed to me that to maintain a committed and happy workforce, management has show employees that they care about them. Ottenweller’s management regularly spends time on the shop floor. They take time to get to know individual people and recognize their successes in front of their peers.

Family businesses fail for a myriad of reasons when new generations take over. I think one cause for failure is when a new generation of management coasts on the success of the previous one, rather than asserting itself to grow and evolve the company in their own right. From the interview, it seems like Ottenweller Company is on a positive trajectory. Talking to Terry and Michael I could see that they both genuinely care that Ottenweller has a positive company culture and a plan for healthy growth. It would be interesting to talk to the fourth generation to get an impression of how they view the company’s path.

Questions: What is the best thing and most difficult thing about working in a family business?