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How a Board Helped One Family Find Its Niche

For third-generation Variety Food Services, having an unbiased, seasoned board of directors in place for the past 15 years has been one of the key elements in a smooth succession plan over the past few years. This has helped the 76-year-old Warren, Mich. vending, food service, and catering company weather the recession of the past few years. The largest independent provider of its kind in the state also has succeeded due to the teamwork and long-time experience of its family- and non-family-based management team.

“When we have had questions and issues to deal with relating to succession and management, our board has been particularly helpful and insightful,” says President and Chief Executive Officer John Nowak, 43. He is one of four Nowak siblings currently employed by Variety.

The seven-person board has three family and four non-family members and was formed to help with succession issues, John says. It was started by his father and uncle, who both had children in the business and wanted to have an outside group to turn to for advice and guidance. The non-family members have included other business owners with similar sized companies and professors, and finance specialists. In the late 1980s, the board decided to have an outside psychologist do a series of personality tests to determine who would be the best sibling to run Variety as the third generation was getting ready to take over the company from their father, John says. The board also offers recommendations on compensation issues, John notes.

The decision was to bring in an outside CEO for a few years in the early 1990s, who had experience in the field on a national level. “The board provided the outside objectivity and perspective that were needed, and this outside CEO helped decide that it would be me who would run the company,” John says.

Another key to Variety’s success also has been its family dynamics. The company officers meet regularly—about once a month--to discuss any issues that arise, says sibling Larry Nowak, 35, who is in charge of customer relations.

“Sometimes we butt heads, but we always put the business first,” Larry says. “If we didn’t disagree sometimes, then we wouldn’t really be communicating too well—and that could be a much bigger problem.”

Eldest sibling Jeanne Nowak, 46, director of human resources, adds: “As a family member, you are particularly able to know everyone’s strengths and weaknesses just because you know each other so well,” says “That can be a real plus when you’re managing a company and different issues come up. You sort of know how the other person is going to react.”

This legacy of strong family values has been present at the business since it began. Variety was originally called the Tasty Snack Co., when grandfather Norman Nowak, an accountant, started the venture in 1928. He was attracted to this sales-for-cash business concept that began with family members packaging peanuts to be distributed at local bars. The company’s first vending machines were introduced during the Depression, when Norman and his new partner, cousin William Emig, purchased single product machines that were placed on Detroit street cars. By the late 1930s, the business grew and Norman’s brother, Vincent came aboard. Norman’s sons, Ken and Don, started working in the family business after school during World War II. Variety, as it was then known, added more vending machine food and candy products. By the late 1940s, hot coffee and chocolate were added. Ken and Don joined the company full-time and continued to expand its offerings. In the 1960s, Ken was eventually named president and Don was vice president of operations. By the 1970s, the brothers added cafeteria service and special event catering.

Third generation family members also began joining and expanding the company to one of the largest vending/food service businesses in the nation. Ken’s son, John, started working in Variety’s warehouse at age 12 and had performed just about every kind of job at the company. He assumed leadership in 1997. In addition to John, three of the four younger Nowak siblings, five cousins, and one brother-in-law currently are employed at the company. All of the five Nowak siblings worked at Variety at one point. “We were never actually told that we had to work here. We all wanted to work here, since the business was a big part of our lives growing up; it was just the natural thing to do,” John says.

However, as the only female sibling, Jeanne had some particular challenges. “I was always given clerical tasks because I was a woman,” she says.” So, I left the business from 17 to 25 and then came back and found my niche here.”

She adds: “In one way or another, we have all been able to find our niche here.”

“We want to keep being a quality company. We are among the biggest in the nation, but don’t have to be the biggest to be the best,” John says.

 

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