Eric Allyn grew up in a family with a legacy of entrepreneurship and innovation. His great-grandfather, William Noah Allyn and Francis A. Welch invented the ophthalmoscope in 1915. Countless other Welch Allyn medical devices have followed since then. Look around your physician’s office on your next visit and without a doubt you will see the Welch Allyn name.
As a member of the fourth generation of his family’s business, Eric dreamt of following in his granddad and dad’s footsteps to lead Welch Allyn. This changed around 2000, when Eric, his siblings and cousins began regularly meeting as a generation to address tensions between their parents that were threatening the business. The result of their work was a radically new governance structure that eliminated family dynamics from the business altogether. It removed power from the third generation and put a new board in charge of hiring a CEO. It was a personal sacrifice for Eric, but ultimately it was the best decision for Welch Allyn.
In this episode, Eric shares the history of his family’s business and their journey from being family managed, to professionally managed, to publicly traded.
Note: Eric’s story is being offered in two parts. This episode is about the family business up until its sale in 2015. In part two (episode 019) Eric shares how his family is managing their wealth and finding a new identity for themselves beyond the business.
Topics discussed in this episode:
- Meet Eric Allyn (2:49)
- About Welch Allyn (7:44)
- The evolution of governance at Welch Allyn (19:30)
- The fourth generation steps in (29:40)
- A radically new governance structure (33:30)
- The sale of the business (38:35)
- What was lost (50:00)
- Preview for part 2, episode 019 (53:14)
Guest Bio:
Eric Allyn is former Chairman of the Board of Directors of Welch Allyn, Inc, a company owned by the Allyn Family for 100 years. For four generations, Welch Allyn was a Medical Device manufacturer, employing some 2,800 people world-wide, and selling products into every hospital and physician office in the US. Welch Allyn was acquired by Hill-Rom, a larger public company, in 2015.
Eric Allyn began his Welch Allyn career as an employee in 1982, working in a variety of positions within the company, from sales, to marketing, to business development and country management. He left his role as employee in 2010 to join Welch Allyn’s Board of Directors, where he served as Chairman of the Board of Directors, and also Chairman of the family’s Voting Trust, through 2015.
Notable & Quotable:
Our devices literally saved lives during World War II, we’re very proud of that part of our heritage. —Eric Allyn #successfulgenerations
My dad says, “In the early days, we didn’t know that things couldn’t be done, so we went ahead and did them.” —Eric Allyn #successfulgenerations
Family business is the whole continuum from capitalism to socialism. You want to treat everyone equally and my grandparents felt that way about their three children. —Eric Allyn #successfulgenerations
Employees were getting caught in the crossfire of family dysfunction. We didn’t have a full fiduciary board. It was hard to tell who was the boss. —Eric Allyn #successfulgenerations
After meeting two or three times a year for five or six years, my generation came out with a radically new governance structure. We removed the third generation as employees of the company, removed them from board of directors, and took away their voting shares and put them in a voting trust. —Eric Allyn #successfulgenerations
We decided to no longer have a family member CEO. For a guy like me who had been running around this building dreaming of being like my dad and granddad, it was a big personal sacrifice. But it was putting what was best for the company in front of what was best for me. It was probably one of the easiest decisions of my life. —Eric Allyn #successfulgenerations
The fact that my generation locked arms on a new governance structure was the most important decision we made in our company’s history. We set the business up to make the best decisions without any baggage. —Eric Allyn #successfulgenerations
[After selling] Our family lost our identity of owning the business. It was a painful decision, but it was right for the business and our employees. —Eric Allyn #successfulgenerations
Resources mentioned in this episode:
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