Lisa Ingram, president and CEO of White Castle, is leading the business her great grandfather started in 1921. From the little shack with only five stools he opened in Wichita, Kansas, the company grew over the course of the next several decades to 340 locations in most major metropolitans in the Midwest and East Coast. It also now includes a thriving retail business, and vertical integration with meat plants and bakeries.
The now-more-than-100-year-old company has a family employment policy, which the family drafted and the corporation accepted. It contains the rules, requirements and expectations of a family member in the family business — that the person has to be a good worker, have a great attitude, etc.
For a family member to take a position in the company, there has to be a job open. The family member will then be paid the same as anybody else who would be in that job. There’s also a requirement that the family member works someplace else for three years before they join the business.
“That's something that we feel is really important. When I went out and worked someplace else, I made a lot of mistakes, and I got to make those someplace else, which was good," Ingram said during the Columbus Smart Business Dealmakers Conference. "I got to learn from some of them. I got to learn about different cultures. I got to learn about different managers. And I was able to bring that knowledge back to the business. And I think that benefits the business.”
While they believe that family members should go work someplace else, she says they also want to encourage them to work in the business. The company has an internship program for the fifth generation that they can do in the summer. They’ll have a project in business intelligence, marketing or some area of the company, and also will go with other family members as one cohort and spend a day working in the restaurants and then in the plants, and then spend a few hours with the CFO learning about the financial impacts, inflows and outflows, of the business.
“We try to give them a good opportunity to learn about the business so that when they go out and work someplace else, they can compare and contrast," she says. "Our hope is that when they come back to work in the business, that they are doing it because they want to, because they believe they add value, and because they're excited about the brand and the opportunity.
The company has had the same family business consultant for more than 20 years. She says he helped them think about two big things that happened to the business. One is transitioning to a board and the other is the CEO transition. The company had a fiduciary board that, 13 or 14 years ago, were meeting monthly as a board of insiders and advisors. The third and fourth generation had discussed the idea that if they really want to grow the business, they need to have people who are skilled at that. While the advisers had been wonderful partners, they felt that if they brought in outsiders, it would help the business more.
So, they created a separate group called the Executive Council to run the business and moved to a quarterly board of directors. Today, their board of directors is five independent directors and two family members, one of them being her. One seat on the board is a family seat that any family member, whether they work in the business or not, can apply for. They go through an interview process and are selected for two, three-year terms. After six years they are not eligible to run again.
“The two things that I cannot stress enough are, one, hiring a family business consultant to help you deal with all these issues in family businesses because it's hard to have those kinds of conversations with people that you're related to. And you want that relationship with your relatives to be pleasant and wonderful and long-lasting and all the great things that family is. And so having someone to help you navigate that is really beneficial," she says. "And then the other thing that has been really beneficial for the business is having a board, whether it's a board of advisers or a board of directors, to help you think about how can you grow the business to challenge your assumptions.”
Any direct descendant of Billy Ingram, the company’s founder, is eligible to get shares of the business, which are usually gifted from the prior generation. Those share yield dividends and the family member has the option of selling those shares back to the company, but that is all they can do with it.
“I sort of joke about we're not selling," she says. "We certainly have gotten approached to sell many, many times. And for us, it's not really about the financial transaction and the financial value of owning the shares, even though there are financial values in owning the shares. It is really the emotional connection to my great grandfather, my grandfather, my father, and all of the team members whose families have grown up and who really feel like they are part of the family. And they absolutely are."
When she visits the company's restaurants and manufacturing facilities, she says there are team members who started working for the company when they were 15 or 16, many of whom had a relative that worked for them previously.
"And that means a tremendous amount to me. During COVID, the amount of energy and enthusiasm and just sheer determination to make sure that our company survived — we have 10,000 team members and there's no way that the family can run the business without those 10,000 team members, and the dedication and the love that they have for the brand, and our customers," she says. "And so, we really feel a sense of obligation to the team members and to the legacy of the brand that is more important to us right now than the financial benefits of selling or going public.”