Richest Man in Minnesota Reflects on 50 Years of Business
LONG LAKE, Minn. (AP) _ After 50 years of building Carlson Companies Inc. into the nation’s 14th largest private company, the richest man in Minnesota is patting his pockets and contemplating the future of his empire.
″My biggest concern now is to make sure the earnings are there so that it doesn’t make bums out of my grandchildren,″ said Curt Carlson, a 74-year-old entrepreneur who is in the process of changing the guard at his $4 billion travel, restaurant, hotel and business incentive company.
The heir apparent to the sanctum that controls Radisson Hotels, Ask Mr. Foster travel agencies, and TGI Friday’s and Country Kitchen restaurants is Edwin ″Skip″ Gage, who is married to Carlson’s daughter Barbara.
The choice was between Gage, who is president and chief operating officer, and Marilyn Nelson, Carlson’s other daughter, who serves on the board and is director of community affairs for the company.
″The time will come when they’ll be vying against each other,″ Carlson predicted.
″But I’m telling them, ’Don’t let the company come down to nothing. Sell it before that happens.‴
For Carlson, it’s a problem he never dreamed of confronting when he quit a comfortable sales job with Procter & Gamble Co. in 1938 to start the Gold Bond Stamp Co. in Minneapolis.
Fifty years later, Carlson is celebrating his enormous success by hosting a sit-down dinner Saturday for 4,000 people. He even hired Bob Hope to entertain.
The first banker he approached half a century ago called the idea of selling trading stamps to grocery stores a ″damn fool scheme,″ but it proved to be a stroke of genius that earned Carlson his first million dollars by age 39.
Since then he has accumulated a net worth of at least $640 million by building the trading stamp operation - the first to go nationwide - into a conglomerate of 75 businesses employing more than 50,000 people.
″I enjoy my status,″ Carlson said from his mansion on Lake Minnetonka west of Minneapolis. ″I’m in with the crowd and I kind of like that.″
Impressive stuff for a former ‘C’ student at the University of Minnesota who came from ordinary means and worked his way through school by delivering newspapers and driving a soda pop truck.
Early in his career he shared the company 50-50 with a partner, but Carlson bought him out because their work ethics clashed.
″Each year he’d say, ’... let’s not work this hard,‴ Carlson recalled. ″He liked to go to the club.″
Arleen Carlson said her husband of 50 years has been considering retiring for the past 10 to 15 years. He hasn’t because he loves to work, she said.
″It’s his brainchild,″ Mrs. Carlson said of the company. ″He’s a leader and it’s difficult to make the break.″
But Carlson said he is finally prepared to step down as chief executive officer to become a long-range strategic adviser.
″I’m not going to be the kind of chairman who still stays in there and runs it,″ he said.
That’s hard to believe from a man who has been known to call his grandchildren on Sundays when he’s out of town to make sure they’ve gone to church. Carlson is still the undisputed leader of the company and his decisions are final.
For example, an executive of the company recently approached him about going into the gaming business with one of the company’s hotels.
″As long as I’m alive there’ll never be any gaming,″ said Carlson, who said he once sat on the board of directors of a company that lost money in an apparent skimming operation at a Las Vegas hotel.
What Carlson said he dreads most about the future is the inevitable family friction that will follow his death. It’s not his two daughters and seven grandchildren he worries about, it’s the descendants who haven’t been born yet.
″I haven’t been able to influence them,″ he said.
So Carlson wants to forestall as long as possible the era of a rich and idle Carlson clan by keeping family members employed. But to land a job at the company, they’ll be required to work for at least three years on the outside.
″I think you have to be gainfully employed to be really happy,″ he said.
Gainful employment in Carlson’s company means working at least six days a week if you want to climb the ladder, said Dick Adrian, a former Carlson Companies vice president who quit in 1982 after seeing many a middle manager depart for jobs with equal pay and fewer demands at other companies.
″He doesn’t pay any more than he has to,″ Adrian said. ″And at Curt’s establishment it’s business first, everything else second.″
But Adrian said most Carlson alumni respect the founder for his drive and business cunning. Even though Carlson considers himself an entrepreneur, he managed the company tightly and as recently as the late 1970s demanded to make the final decision on any expense larger than $50,000, Adrian said.
″It’s amazing how much he knew about all the divisions,″ Adrian said. ″He and Skip have a real close relationship with the numbers in all those divisions.″
Adrian said he once saw Carlson ″pacing and yelling″ after being notified that one of his aquisitions contained a surprise liability.
″I’m not exactly positive, but I think they went back to check the structure of the ceiling in his office,″ Adrian said.
Gage said his father-in-law is an expert deal maker. When trading stamps faded in 1968, Carlson went on a diversification binge by adding to his acquisition of the Radisson Hotel in Minneapolis with investments in business incentive companies, travel agencies, more hotels, other real estate and restaurants.
The largest profit center in the conglomerate, Carlson said, is E.F. MacDonald Motivation Co., an incentive company he purchased in 1981 that counts General Motors, Goodrich Tires, and Chrysler Corp. as its customers.
Although he is not well known nationally, Carlson is a legend in Minnesota and a dignitary in Sweden, where his grandfather was a farmer. Carlson and his wife are friends with the king and queen of Sweden and Carlson was named Swedish-American of the year in Stockholm in 1981.
Among his celebrated causes in Minnesota, Carlson was one of seven businessmen who put up a total of $10 million to help develop the Metrodome. He also contributed $400,000 to the 1984 buyout of Twins tickets that kept former owner Calvin Griffith from moving the team to Florida. In 1986, Carlson put up $25 million for the University of Minnesota to spark a fund drive that raised $350 million.
″He lives his commitments,″ said Carl Platou, president of Fairview Hospitals and Health Systems, where Carlson has been a board member for 25 years.
″He helps people understand what the future is going to be.″