When you’re at work and you feel a headache coming on, you usually don’t just run out to the closest convenience store to buy an aspirin or ibuprofen. You probably would first ask your most trusted work compadre, “Do you have a couple aspirin?” That is the premise that drove Chris DeWolf’s father-in-law to start the business that would become family-owned, second-generation Lil’ Drug Store Products.
“If you’re driving down the road and you have a headache, you only need two pills, not 30,” says Christopher DeWolf, co-owner, president and CEO of Lil’ Drug Store Products. “My father-in-law had that idea. He called up the makers of brands like Tylenol, Bayer Aspirin, Alka-Seltzer and Anacin and said, ‘Those packets of medicine that you’re giving away as samples: How about I buy them from you? It can be a trial opportunity. Maybe you’ll make a little money.’”
Fifty years later, it’s safe to say that Chris’s father-in-law had the right idea.
“Our business is not so little anymore. We have a portfolio of businesses that comprise brand companies, specialty distribution companies, and insight and analytics companies that serve the retail industry today. We count 180,000 retail locations across North America as our customers,” says DeWolf.
DeWolf’s entrée into the company took place in 2000. The company was struggling because of his father-in-law’s battle with cancer, a diagnosis that drove the company to stop taking the risk needed to ensure growth. DeWolf’s wife, Suzy, asked him to take a leave of absence from General Electric, where he was working at the time. The goal was to have an objective person with a business background at the table as the family learned about the business and dealt with the health concerns of its patriarch. Chris and Suzy DeWolf are now owners of the business and have grown it substantially. DeWolf calls their journey a “phenomenal ride.”
DeWolf gives the company’s board (and board structure) much of the credit for the company’s growth. Although the board serves in an advisory capacity, he says it operates with the discipline of a fiduciary board.
“We bring the best of both worlds,” says DeWolf, who is immediate past chair and a trustee of Mercycare Service Corporation, the parent company of Mercy Cedar Rapids’ hospital and clinics. “We bring the compassion, the engagement and the connectiveness of a family-owned business, but we have the discipline of major corporations.”
As a family business owner, DeWolf says one of the keys to attracting great talent to the board is the family learning to give up control.
DeWolf describes the company’s first board as a “friends and family board,” saying it was put in place primarily so that his father-in-law could navigate his illness and the chaos that accompanied it. Once Chris and Suzy DeWolf arrived, they set out to put together a more unique and beneficial board structure.
“We wanted to have a family board similar to a family council, and we wanted to have a business board, the thought being two very different charters,” says DeWolf. “The family business board is about driving the business forward, developing others and making sure that our goal of being a third-generation family business can actually come to reality.”
The Lil’ Drug Store Products board includes a number of committees, with the compensation committee being the one that DeWolf is “most fond of.”
“I figured out early on that if I didn’t take compensation out of my decisions when running the business, it was going to be a nightmare,” he says. “There is an inherent tug of war between shareholders and executive team members. If you want to do what is best for your company, you have to get your board involved with executive compensation and setting a compensation strategy for the operation.”
When asked about the most important qualities necessary to be a director on the Lil’ Drug Store Products board, DeWolf cites one that is not brought up frequently: the willingness to mentor and develop other professionals.
“One of the most important things we look for if you’re going to join our board is your motivation. You must wake up in the morning and want to develop people — period, full stop,” he says. “We do a lot of formal mentoring programs where each board member is paired up with a member of our executive team for mentorship. That pairing reflects the development needs of the executive team member.”
DeWolf takes the independence of the Lil’ Drug Store Products board very seriously, detailing that the board consists of eight members, six of whom are outside board members and two of which are family. But he stresses that, especially in family businesses, those plans must remain fluid. His reasoning? His three adult kids, who at this point are “evolving and growing into understanding and appreciating the concept of governance.”
“They’ll have opportunities to participate,” says DeWolf. “However, the key fundamental belief is, if we’re going to be the best company we can be, we need to make sure we have outside perspectives around the table.”
Two of Suzy and Chris’s three children are women. That is one reason why the kids will see women independent directors in the boardroom.
“We want to make sure that whether there are executives or our kids growing into the business, that they can see themselves — someone that looks like them — sitting around the board table when they walk through the threshold of that board. It’s very important.”