The Success Gene

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"In addition to retail and mail order, we used to do a small wholesale business selling to bars and restaurants around town, but that all ended January 1, when a no-smoking ordinance in Illinois went into effect. I think the ordinance will improve our in-store business, because we're one of the only places left where people can actually go and smoke. We just finished building a 1,200-square-foot members-only lounge. If you can't roll and change and adapt, you're going to be dead.

"My dad told me, 'We only own two things. We own our inventory, and we own our reputation.' Our employees hear it all the time. When people come to work on our sales floor, we tell them flat out: Don't ever take anything personally, but we're going to watch you. Even though you didn't do anything wrong, we're going to tell you there's a way that we do things -- there's an Iwan Reis way. And a lot of times we're schmucks. We bend over backwards for customers when we probably shouldn't, and a lot of times we lose money because we replace things we shouldn't replace. So we might lose $100, but especially nowadays, with blogs and websites and newsgroups, if that guy goes out there and writes that he had a great experience and we took care of him, that's worth a hundred bucks."

Harden Furniture Company
Founded: 1844
McConnellsville, New York

Greg Harden, 51, CEO, fifth generation

"I was the least likely member of my generation to join the business. I graduated from Colgate in 1978 with little direction or interest in the business. I was a good golfer in college, and that was my primary focus. I eventually recognized that very few ever make it to the tour. I guess furniture was in my blood -- or at least, other than hitting a golf ball, I didn't have any other talents to rely on.

"We make better-quality solid-wood and upholstered furniture. Very few family members are active in the business today. The furniture business is not particularly exciting, and that may have been influential in family members choosing other careers. My father, who ran the company before me, and his sister are still modestly involved, and they lend a lot to the culture of our organization. Just that they are active and visible after more than 60 years here means a lot to our employees and customers.

"The business has changed radically since our founding 164 years ago, perhaps more in the past five years than at any time except the Great Depression and World War II. It is a daunting challenge for a family business to adjust to extreme changes in markets, consumer behavior, globalization, industry consolidation, and an economy that has no mercy on those who cannot adapt. Lower-priced products have flooded our industry -- and their quality has improved dramatically. Durham, a Canadian company that was our No. 1 competition in the solid-wood-bedroom category, has fallen on hard times.

"The most important thing I've learned from the fourth generation is that their almost fanatical commitment to financial conservatism is very valuable when the business and industry are faced with challenges. We have virtually no debt, and a big cushion of cash is a tremendous advantage.

"The sixth generation has yet to reach the age where they would enter the business. Some of them will have an interest in the business, but they will need to convince the more senior generations that they have the ability, energy, and commitment to grow the business. The younger generation's ability to innovate is what will allow Harden to extend the legacy of the brand.

"I honestly feel that our best opportunity is to continue producing domestically. We have to be able to differentiate the brand, and if we abandon our core strengths, then we have nothing left to offer. In addition to being stubborn, I am intensely competitive -- in the business, as a father, as an athlete -- and perhaps my commitment is based more on a determination to win. We are going to survive, and we are going to win. We will never be the biggest, but we will be the best, and we will be one of the few domestic producers who survive."

A.E. Schmidt Company
POOL TABLE MANUFACTURER
Founded: 1850
St. Louis

Kurt Schmidt, 49, president, fifth generation

"My great-great-great-grandfather Ernst Schmidt emigrated from Germany and set up shop with just one lathe. Today, we sell virtually everything you could want for a game room, and we make just about any kind of pool table. I have never had another job. This is all I ever wanted to do. You better love the business that you are in if you want to stick around, because like that ill-tempered dog up the street, sometimes it's not so lovable. We have stuck around because no matter how bad things get -- and they have been rotten from time to time -- the passion is still there.

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Adam Bluestein

A former editor at Real Simple, Adam Bluestein writes frequently about innovation and new technology. He lives with his wife and two children in Burlington, Vermont.

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