At her first annual meeting as CEO and chair of the largest company in the world run by a woman, Marilyn Carlson Nelson glided up to the podium on Rollerblades. In place of the usual, “Good day, ladies and gentlemen,” her entrance line was, “Here we go, go, go, go! Here we go, go, go, go!”
Leader of the privately held Carlson Companies, the world’s largest travel services business, Carlson Nelson calls herself a “mission-driven CEO.”
“I have labored to make our company culture an inclusive culture,” she says. “The mission-driven CEO has to serve all stakeholders: the shareholders, of course, but also the employees, the customers, the community and the nation.” Pausing, she adds: “And, in my case, the family.”
Since childhood, Carlson Nelson has been on a mission to increase her speed, capability and endurance at work, home and play. As a voluntary test of her own abilities, for example, she flew with the Air Force Thunderbirds in 1997, withstanding nine times the force of gravity power-diving an F-16. As she climbed out of the fighter jet at Nellis Air Force Base in Nevada, she removed her helmet and proudly held up her airsickness bag, empty and dry.
Her daring, carefree, yet businesslike attitude developed as a child, when Carlson Nelson learned that in a family business it’s hard to distinguish between family and business. Shortly after she was born, her father, Curt Carlson, quit his job and took a gamble. He became Minnesota’s first billionaire, through Gold Bond trading stamps, building his startup, the Carlson Cos., into a global powerhouse based in a suburb of Minneapolis. And he would not fully relinquish the reins to his oldest daughter, Marilyn, until he was 84 years old and she was nearly 60.
Travel industry savants called Carlson Nelson’s ascent “the longest-running succession saga in business history.” In 1991, when she was vice-chair of Carlson Holdings, Curt Carlson ordained her brother-in-law, Edwin “Skip” Gage, as CEO. He lasted less than a year; Curt stepped back in and Gage went off to set up a rival business of his own. (As is typical for a family operation, Gage, still married to Marilyn’s sister Barbara, remains on the Carlson board.)
Marilyn Carlson Nelson bided her time with, some say, unusual patience. “Doing the job is such a passion for me that I was honestly less concerned about the title,” she says. She had held virtually every other executive job, including COO, until March 23, 1998. That day, the 60th anniversary of the company, she became one of the most powerful women in the business world by taking official command of the worldwide Carlson enterprise.
“The press did criticize him for not turning over the reins sooner-it’s out of the paradigm that public companies expect,” says Carlson Nelson. “But he did a smooth transition and I think if you own your own company I guess you can make the rules.”
Carlson At a Glance
CARLSON COS., including franchise operations, employs about 190,000 people in 140 countries. Here is a breakdown of its $19.8 billion in annual sales:
65% Business and leisure travel: Carlson Wagonlit Travel, Cruise Holidays and Results Travel
5% Marketing: Carlson Marketing Group and Gold Points Reward Network, a consumer incentive service.
Source: Company reports
Like all classical Scandinavian epics, the Carlson family saga features the sea, the midnight sun and hard-working families with precocious children. It began in the Swedish village of Smaland. From there, Curt Carlson’s parents sailed to America in 1886. Young Curt became a sales wizard for Procter & Gamble. Just after the Depression he quit P&G and took a $55 loan from his landlord to start his trading stamp business.
There were ups and downs, but by the 1960s, Carlson’s Gold Bond trading stamps had 30 percent of the multi-million-dollar market. As the trading stamp market peaked, Carlson branched out, buying the landmark Radisson Hotel in Minneapolis, which became the flagship of a worldwide travel and leisure business. He made more acquisitions, including T.G.I. Friday’s restaurants, the Ask Mr. Foster chain of travel agencies, airlines and cruise lines. By 1977, Curt Carlson was a billionaire. Soon came the big vacation lodge in northern Wisconsin, the Swedish-style chalet in the mountains of Wyoming, the family compound on a lake near Minneapolis, the fine cars and the first yacht, the “Curt-C.”
“I learned the family business at the breakfast table, at the dinner table, on weekends,” Carlson Nelson recalls. In turn, she has been imbuing her 39-year-old son Curtis C. Nelson, who is now president and COO, with the lore of the multinational “family of families,” a reference to the many Carlson franchises that are also run by local family dynasties.
“I hear myself speaking in my father’s voice, but I hear my son speaking in mine and my father’s,” says Carlson Nelson. “We are so close, our aspirations for the corporation are so similar, I think we probably do take turns speaking the lines back and forth to each other. It’s a cultural dynamic that goes on.”
There is one crucial difference between Carlson Nelson’s background and her son’s. When she was born, they were still relatively poor. “In a sense, I was born a chauffeur’s daughter because I didn’t grow up wealthy. He started the company the year I was born. So we gave up dessert when I was in my formative years because we got a little speech about investing and return on investment. If we ate it, it’d be gone. If we put the money in the company, it would grow and we’d get a return.”
Investing the dessert money was Carlson Nelson’s first lesson in business. She continued her education with a degree in international economics from Smith, and spent several years as a securities analyst with PaineWebber before returning to the family fold.
CEO at last
Curt Carlson died the year after Carlson Nelson became CEO. Under her direction, the company has grown even larger. Carlson Cos., including franchises, now have sales of nearly $20 billion a year, employing about 190,000 people in 140 countries. They acquired and recently sold at a profit Thomas Cook, the venerable British travel firm. The timely and lucrative shedding of Cook has helped Carlson stay airborne in what has been a steep dive for the rest of the hospitality industry.
In addition to raising cash via the Cook sale, Carlson Nelson led her company through a massive reevaluation of all units, breaking every business down and putting each back together in a presumably cleaner, smarter, more profitable way. “My vision is to become the most-respected private company on earth. To create a great place where great people can do great work.” To this end, she says, “we reinvented our processes last year. We ended up almost getting back to the level of profitability of 2000.” All processes were reexamined with an eye toward being €˜best in class’ in each one. “We set a $32-million savings goal and we accomplished $54-million,” she says in an interview in her company’s elegant 15th floor boardroom overlooking the lakes and forests of Minnetonka, Minn. “The first step was to do the process redesign within the groups. The second step, now, is to do it across the groups.” She says the company will profit from an additional cost saving again this year.
A supreme multitasker, Carlson Nelson is piloting several parallel missions while running her company. She’s networking with politicians and newspaper editorial boards to help relaunch the travel industry in the wake of September 11. “One out of every seven jobs in America is connected to the travel industry,” she says. “People don’t realize that when the travel industry slumps, there’s a huge ripple effect in the construction industry, in agriculture, in all sorts of seemingly unrelated businesses.”
She also puts in considerable time as chair of the National Women’s Business Council, a post she was appointed to by President Bush. At a recent conference in New York, Carlson Nelson noted from the podium that one-third of the current crop of CEOs had just gotten the job in the last two years, and that another third had turned over just since 1998. “Most CEOs have been in place for less time than it takes to culture a good bottle of wine,” she says.
Flying in formation
To Carlson Nelson, a CEO has to train and operate like a jet pilot. Once the company’s talented executive team is flying in formation, she says, “I am usually raising peripheral vision issues-how a decision is going to impact other pieces of the business, how it’s going to impact our shareholder relationships and our banking relationships. I really go through the various stakeholders in my mind. And I might try to impact the final outcome so that it will bring people the broadest possible ownership of the decision.”
Her meritocratic vision has resulted in women holding 40 percent of Carlson’s executive positions, a “surrogate stock” plan for employees, training programs to bring potential executives up to speed and more. That strategy of leadership often puts culture before profits to get “the right people in the right seats on the bus.”
“You can make the €˜right’ decision but it might be the wrong leadership decision,” she says. “Turning down an investment might be the right thing for the organization, but you suddenly realize you will demoralize the team.”
As examples, she cites the in-house day care center and subsidized company cafeteria that were among her first official acts as CEO. “Those are decisions that if you stand them alone, it’s a cost. You can’t quantify the return,” she says. Where you see the return is in the team-building, networking and employee satisfaction that results from such investments, she says.
The day care center and cafeteria are things Curt Carlson would most likely not have wanted to “waste money” on. They’re also the kinds of “emotional” investments that are often labeled the domain of women-although many male CEOs manage similarly. At least part of the Curt Carlson legend has it that he dallied so long promoting Carlson Nelson because he really didn’t want a woman to run the company at all. “I’m sure that being a woman was part of it,” says Carlson Nelson. “But if I’d been a guy, there would have been a different excuse. Curt didn’t want to go. So if every company around the world had women CEOs, he would have said, €˜But could they really imagine a brunette?'”
Men and women are different in business, she says. “To some extent I see the men I work with compartmentalize and maybe reference their families less, kind of keep their worlds a little bit more separate. No matter what the toughest guy says, if you’re having problems at home or your kids are in trouble, it impacts you.”
She and her husband, Glen Nelson, a Harvard-trained surgeon who recently retired as an executive of Medtronic, have certainly had their share of troubles with their four children. Two years ago, their son Curtis had a liver transplant after contracting hepatitis from blood transfusions following a near-fatal car accident. And in 1985, both parents had their worst fears realized when their oldest daughter, Juliette, was killed in an automobile accident a week after leaving for college.
“We certainly experienced the need to find a way to deal with tragedy and still be effective,” she says. “The loss is so devastating, it’s just so much worse than you could even imagine and it’s just so black and so dark that you have to dig very deep. The most valuable thing that can come out of something like that is that you take that energy and you take that despair and you actually summon it up to impact your world in a positive way.
“I don’t know if I’ll be here tomorrow. I know that today is a day I have and I’ve often said that what Juliette taught me was that each day should be a day I would sign my name to and that we should live as a kind of artist, because that may be the last day.”