A Family Business Story

Donato was the son of the manager of an aristocrat's estate. Barbara was the daughter of a successful business family. They fell in love, had two children, and set about building a productive life together.

But before any of this happened, Donato and Barbara had a wedding. Their marriage was an orderly, logical and practical arrangement, just as marriages had been for centuries in many parts of the world, and as was the practice at the turn of the 20th century in Italy.

Barbara's father had died prematurely without a male heir to manage the family business. Long before there was the so-called "glass ceiling" of the late 20th century, impeding the promotion of women to upper management in business, actual female participation in business management was prevented by what must have seemed like a stone wall. Donato's exposure to his father's successful management practices made him not only a suitable choice as a husband for Barbara, but also as a future manager of her family's business interests.

It turns out that Donato Forlizzi had more than a handle on best business practices; he also had vision and an entrepreneurial spirit, which allowed him to see the 20th century future of petroleum products in Italy and take action. Armed with these attributes and Barbara's family resources, the Forlizzi's founded the first petroleum company in Italy, which they gave the very un-Italian name of Ford Oil. Ford Oil ultimately owned refineries, a distribution network, and dozens of retail gasoline stations.

On The Wrong Side Of Global Politics
Up to now, everything -- including the arranged marriage -- could have been the same for any Italian couple living in America during the first trimester of the 1900s. But two things were very different for this couple living in Italy. First, the Italian form of government was about to take a dramatic turn from a benevolent -- but also feckless -- monarchy, to a fascist dictatorship; and second, there was going to be a war.

To be sure, World War II would have negative affects on family businesses in America and many parts of the world. But as we know, this war would partially be fought on the same Italian soil upon which the Forlizzis had staked their life's work.

Mussolini's rise to power precluded not only the monarchy of King Vittorio Manuel III, but also anyone who was loyal to the king. Two of those loyalists were Donato and Barbara. In the power struggle, many loyalists were eliminated -- literally. Some, like the Forlizzis, were put in prison. Ford Oil, the family business Donato and Barbara had built from scratch, was nationalized by Mussolini, and ultimately its infrastructure was devastated by the ravages of the war.

Even though a post-war commission was formed to look into the matters of returning assets to families like the Forlizzis, financially, Donato and Barbara never completely recovered the resources they had lost. And worse, Donato's prison experience had broken his spirit, and he was never again the force that had built the first petroleum organization in Italy.

A Daughter Takes Over
Of the two Forlizzi children, Amelia was the one interested in the family business. She had her father's drive and her mother's grit, times were changing for women in the marketplace, and there was much work to be done in the aftermath of the war. Now married to Antonio De Paolis, they decided to delay their plans for a family until the remnant of Ford Oil -- a half dozen retail gas stations - was re-established on sound footing.

The Forlizzi -- now De Paolis -- family business gained new future management in the 1960s when Amelia gave birth first to Gaetano, then Barbara, and finally Donato. The handful of retail gas stations, plus a number of real estate acquisitions would provide a living for the De Paolis family, as well as a business education for the De Paolis children.

New Family Business Challenges
By the late 1990s, there were three prime challenges facing the De Paolis family business. First, Italy's moribund economy was, and still is, representative of the European Union: double digit unemployment, social programs that can no longer be sustained by the government, and the realities of globalization. But the De Paolis family had faced market fluctuations before.

The second and third challenges were different, and both struck at the essence of success as a petrol retailer regardless of what country the pumps are in: declining per-unit (gallons or liters) gross profit margin, and declining volume of units sold.

The per-unit profit margin problem actually seems to be a global petroleum retail industry issue rather than a geographic phenomenon. But the sales volume issue was more particular to Italy. Prior to 1995 station licenses were regulated. After deregulation, the proliferation of outlets divided the unit sales volume pie. Since then, with lower volume and margins, the De Paolis family has essentially been doing something too many small business owners have experienced from time to time: working for their employees.

A Family Business Re-Invents Itself
Another thing small businesses have had to do in many parts of the world over the past few years is re-invent themselves. The De Paolis family is turning to the one area that has been the backbone of their livelihood for more than a century, real estate.

But this time, they opened a small hotel. The Residenza Cellini (pronounced chelini) is a small hotel in the heart of Rome, and it is being managed -- and sometimes staffed -- by all three of the De Paolis children, while still overseeing the other family interests.

Over the next few years, the De Paolis family will transition completely out of the petrol business. So why not end that business now? Donato (the grandson) tells me it's because of the family's commitment to their loyal employees, who are a few years away from eligibility for national retirement benefits. Small business owners don't have a franchise on loyalty, but if you want to go to a place where it is in abundance, spend some time with one.

Some Things Run Deep
Visiting with the grandchildren of Donato and Barbara Forlizzi this week, as I stayed in their hotel, has provided me with evidence of something I have long suspected: The heart and spirit of a small business owner must be made in heaven, because it certainly knows no political, geographic, cultural, or racial boundaries.

As I listened to their family business history, as well as their future business plans, I was struck by the characteristics that have been bequeathed to, and accepted by, Gaetano, Barbara, and Donato: Seek excellence; value loyalty; build trust; take care of customers; embrace the inevitability of change; and never, ever, give up.

Write this on a rock...Seek excellence; value loyalty; build trust, take care of customers; embrace the inevitability of change; and never, ever, give up.