Father, Son and Gum; As other dynasties fade, afourth-generation CEO shakes up Wrigley by tossing out his dad'srule book.

IN 1995, WILLIAM WRIGLEY JR. approached his father with a boldidea: The family-run company, after dominating the chewing-gumbusiness for a century, should start selling mints. His father, whohad successfully run Wm. Wrigley Jr. Co. for more than threedecades, turned him down. \"We know gum,\" the son recalls his fathersaying.

Family dynasties running big public companies over severalgenerations are a vanishing breed. But William Wrigley Jr., whotook over the business in 1999 after his father's unexpected death,has managed to turn around a company whose sales had stagnated andwhose staff was steeped in doing things in the ultra-conservativemanner of his father. At 35 years old, Mr. Wrigley set out toreinvent an iconic company while battling the legacy of his dad, atough boss who had rejected many of his ideas over the years.

Since then, Mr. Wrigley has transformed the company from acautious purveyor of Doublemint and Juicy Fruit into one of thefastest-growing publicly traded food companies. For the first timein decades, Wrigley is buying competitors, taking on debt andpouring money into research. After introducing few products in the1990s, the company launched 72 last year alone, includingcappuccino-flavored gum and sour gummy Life Savers. It purchasedAltoids mints, is thinking about chocolate and patented chewing gumfor dogs. \"I don't rule anything out,\" says Mr. Wrigley.

While some of his ventures have flopped, Wrigley has performedwell in the seven years since he took over. Sales have more thandoubled, to $4.16 billion last year, profits have increased 68%overall and the company's stock has risen about 45%. Some analystsworry that the company's moves to diversify could shift its focusfrom the $15 billion world-wide gum market, where Wrigley is thetop player.

Mr. Wrigley, now 42, has also hired outsiders for top positions,eased the dress code and encouraged employees to take risks --things that didn't happen under his father. As long as his fatherwas at the center of the company, \"I was going to get stopped fromgetting any further into the center or we were going to collidelike two neutrons or atoms in an accelerator,\" says Mr. Wrigley.\"That is one of the biggest challenges for family businesses,\" hesays. \"When to step aside and how to step aside.\"

Ford Motor Co. and J.M. Smucker Co. are run by thegreat-grandsons of the founders, but many older family businessdynasties are dying out as the third and fourth generations decidenot to take over. Children don't feel as close to the founder astime passes, and increasingly independent boards are demandingbroader sets of skills for leaders.

The Wrigley family helped build Chicago and remains one of itsbest- known dynasties. Wrigley's Michigan Avenue headquarters isone of the city's landmark buildings and the family's name is oneverything from the Chicago Cubs baseball stadium to theWrigleyville neighborhood to part of the new Millennium Park.

Yet growing up, Mr. Wrigley tried to conceal his identity, byintroducing himself with just his first name. \"Introducing yourselfas Bill Wrigley was way more of a liability,\" he says. \"Most peoplewould think it's terrific. But people instantly look at youdifferently, judge you, and say, 'Oh here's this real wealthyperson' or something, 'and he's going to be full of himself.' \"

Although Mr. Wrigley shut down the company's 94-year-old gumplant on Chicago's south side last year, he simultaneously opened a$45 million research and development center in the city that'shelped revitalize the Goose Island area and is bringing inwhite-collar jobs. Wrigley, which has had gum factories overseassince the 1920s, still makes gum at a facility in Yorkville,Ill.

Through trusts, Mr. Wrigley controls more shares of the companythan any other investor, with about 15% under his beneficialownership. The company won't say how many shares are held by theentire Wrigley clan. A divorced father of three, Mr. Wrigley is theonly family member at Wrigley. His older sister and brother havenever worked at the company. The family has been intensely privatefor decades, and Mr. Wrigley grants few interviews.

The first William Wrigley Jr. was 11 years old when, in 1872, heran away from Philadelphia to New York, where he hawked newspapersand slept on the street, according to a 1920 article in AmericanMagazine. Years later he went to Chicago to peddle soap, thenbaking powder, to shop owners. To entice them, he gave away twopackages of chewing gum with each can of baking powder. When thegum became more popular, he started selling that instead. Soon hewas making his own gum. Juicy Fruit hit shelves in 1893. To buildsales, Mr. Wrigley twice gathered every phonebook in the countryand mailed each person listed four sticks of chewing gum, accordingto the article, which the company cites. By 1920, he was makingnine billion sticks of gum a year and had become the world'slargest advertiser of a single product. In 1923, the company wentpublic.

The Great Depression nudged the company in a more cautiousdirection under the founder's son, Philip Wrigley. (He was thecompany's only leader who wasn't named William.) When Philip's son,William Wrigley, took over as chief executive in 1961, he increasedsales by pushing into Europe and Asia. But Wrigley stood by asWarner-Lambert Co. took the lead in sugarless gum with Trident inthe 1960s.

The current William Wrigley Jr. grew up watching his father goto work at the company's white terra cotta headquarters in Chicago.When he was 5, his parents divorced. At 10, he moved to Arizonawith his mother and siblings, where he swam competitively. He was aB student in private school. As a teen, he lived with his fatherduring the summers and worked at the company, driving to the officewith his father. On weekends, he water-skied with his dad at theWrigley estate in Lake Geneva, Wis.

One summer, the younger Mr. Wrigley donned a white lab coat tomix test batches of Extra sugarless gum. At Duke University, wherehe studied economics, he read company memos mailed to him by hisfather. But he didn't go to work at Wrigley right away. He wantedto create something of his own. \"I've always liked the idea ofbeing an entrepreneur,\" Mr. Wrigley says. He'd grown up intriguedby the adventurous tales he heard about his great-grandfather, thecompany founder. \"Those genes maybe skipped a couple generationsand popped up again.\"

After graduating, he moved to Seattle to help a friend launch athree-person business selling stain remover. His father gave hisreluctant blessing, Bill Jr. says. Bill Jr. set himself up in thefrozen-foods aisle of supermarkets to demonstrate the stain removeron a carpet sample. Soon, working at Wrigley seemed more exciting.He returned to Chicago in 1985 as his father's assistant.

The elder Wrigley was a formal man whom nearly everyone, evenfriends, called \"Mr. Wrigley.\" He was called that until he died,even though by the 1990s, many top executives were much moreinformal. Yet Mr. Wrigley warmed employees by remembering theirbirthdays and shaking hands with workers at factories, recallsDushan Petrovich, Wrigley's chief administrative officer.

Fanatical about details, Mr. Wrigley once flew a Chicagodesigner to meet him at Wrigley's Prague office in order to matchthe shade of blue in the carpet there with the floors atheadquarters. He insisted on screening casting tapes for the newDoublemint twins, to find actors with the right look. \"He didn'tget challenged a whole lot,\" Bill Jr. says. \"It was sort of 'Thisis what Mr. Wrigley wants and so let's go find a character with ashorter haircut.' \"

When the younger Mr. Wrigley took a top job at Wrigley'sCanadian division in 1990, he set out to change the recipes andpackaging for Juicy Fruit, Doublemint and Spearmint. Sales inCanada were falling and the formulas had hardly changed in decades.He also proposed launching a pellet-shaped sugarfree gum, which wasselling well for Wrigley in Europe.

His father quickly nixed the packaging and recipe changesbecause he said they could alienate longtime customers, Bill Jr.recalls. The elder Wrigley balked at pellet gum, too, because itrequired costly new packaging equipment. Bill Jr. pressed, lobbyingover lunch in his father's regular booth at the company's privaterestaurant. His father gave in. Excel pellets eventually becameWrigley's best- selling product in Canada. Bill Jr. doesn't recallhis father congratulating him. \"That just wasn't his style,\" hesays.

In the mid-1990s, Altoids and other strong-tasting mints begangaining space in the candy aisle. Bill Jr. prodded his father tobuy Frisk, a Belgian maker of zippy peppermints. Wrigley alreadyhad vast global merchandising and distribution. It could plug inthe mints and increase sales, Bill Jr. figured. But his fatherthought \"intense\" mints were a fad. Besides, he told his son, therewas still room to grow in gum. Italian competitor Perfetti VanMelle bought Frisk instead in 1995.

By the late 1990s, as the elder Mr. Wrigley reached his mid-60s,Bill Jr. began asking about his own future. The elder Mr. Wrigleydidn't want to talk about succession. And he rarely commented onwhether his son was doing a good job, Bill Jr. says. \"I never feltthat confidence from him.\" Frustrated, he began thinking aboutleaving Wrigley.

Howard Bernick, the departing Alberto-Culver Co. CEO who nowsits on Wrigley's board, recalls the elder Mr. Wrigley thinking hisson wasn't ready yet to take over and saying, \" 'I just wish he wasa little bit older.' \"

Mr. Wrigley's father \"had no doubt that he was going to be thenext leader,\" says Richard Smucker, co-chief executive of jam makerJ.M. Smucker and a Wrigley director. He just \"leaned over backwarda little bit not to express that\" so people wouldn't think of hisson as \"the fair-haired boy.\" Mr. Smucker knows the issue of familybusiness dynasties well, also being the great-grandson of a companyfounder. \"Any family member has to work harder,\" he says.

The younger Mr. Wrigley was working in Europe in January 1999when his father slipped on ice at the family estate in Wisconsinand broke his hip. Since his father was going through a divorcewith his third wife at the time, Bill Jr. stepped in to take careof him, helping him run meetings from his home. What seemed a mildinjury grew serious as his frail condition magnified other healthproblems. Nevertheless, the elder Wrigley insisted on running theannual shareholder meeting that March.

His condition took a turn for the worse. Bill Jr. sent thecompany jet to fetch his dad's doctor, who was away in Arizona. Itwas the first time anyone had dispatched the plane without hisfather's permission. \"Don't worry,\" Bill Jr. told his father as hesat on his hospital bed. \"I'm going to take care of everything.\" Hesays his father told him that he loved him.

By the next morning, the elder Mr. Wrigley had slipped into acoma. Terrified, Bill Jr. led the annual meeting for the firsttime. Days later, Wrigley's board named him acting president. Hewent to the hospital to tell his father, who was unresponsive inthe coma. Mr. Wrigley died the next day, of complications frompneumonia. \"Once he knew that I was going to run the company, Ithink he said, 'OK, now it's time for me to go,' \" Bill Jr.says.

Ten days later, William Wrigley Jr. became the fourth chiefexecutive of the company, following his father, grandfather andgreat- grandfather. Wall Street immediately questioned whether hehad enough experience. Although the company had been largelysuccessful during his father's tenure, when Bill Jr. took over, itsU.S. gum sales had been flat for about five years.

Sorting through his father's office, Mr. Wrigley was shocked tofind in his in-box a question on what color to make the carpet onthe 12th floor. \"I don't want to make this decision,\" Mr. Wrigleyrecalls thinking. \"And I don't want anyone who reports to me tomake this decision.\" He turned his father's office into aconference space.

He started making other changes. Some were little, like liftingthe ban on using voice-mail during business hours and loosening thedress code from coats and ties to \"business-appropriate\"attire.

Other changes were bigger, like creating the company'sfirst-ever strategic plan, and hiring top managers from GilletteCo. and Procter & Gamble Co., breaking a tradition of promotingfrom within. He also ordered the new packaging and recipes forDoublemint and other standards that his father had rejected.

Sitting in a church before a friend's wedding, Mr. Wrigleyscrawled on a card: \"Wrigley brands woven into the fabric ofeveryday life around the world.\" He says he intentionally left out\"gum\" so the statement would stay relevant as the company expandedinto candy. Today, his scribbling has become the company's visionstatement.

Mr. Wrigley says he isn't trying to change Wrigley's values --or its emphasis on chewing gum, a retail standard in the checkoutline. Gum accounts for 90% of Wrigley's sales. \"We see great growthin chewing gum,\" Mr. Wrigley says. \"But then it was also justlogical to say 'Well, what else is up at the front end there? Whoelse are we competing with? And why can't we do some of that too?'\"

When Mr. Wrigley took over, there was \"an unleashing of a lot ofenergy,\" says Mr. Petrovich, who also worked for his father. Butsome employees bristled at the changes in style. Managers fumbledover the new dress code, some not exactly sure what kind of shoeswere allowed. A company-described \"breakthrough\" training session,that emphasized stretching and drinking water, was dismissed bysome employees as a new-age fad, executives say. In a meetingshortly after Mr. Wrigley took over, someone mentioned a newinitiative he knew nothing about. The people \"looked at me like Iwas on the moon,\" he recalls, \"because in the past, anything thathappened, the CEO knew about.\"

He sent workers an email that said, \"If we never make mistakes,then we are most likely not being very innovative and not takingenough risks.\" He made his own mistakes. He thought gum could be avehicle for medicine, so Wrigley invested more than $10 million tostart a health-care division that launched Surpass, a chewing guminfused with antacid. Wrigley couldn't persuade stores to stock itat the checkout counter, and finally pulled it off the market in2003.

What might have been his biggest gamble never materialized. In2002, he says he got a message to call Richard Lenny, Hershey'sCEO. Mr. Lenny said the trust that controls Hershey wanted to sellthe candy maker. Would Wrigley consider a bid? Wrigley hadn'tbought a company in half a century and didn't even carry debt onits balance sheet at the time. \"Absolutely,\" Mr. Wrigley said.

Board members weren't so sure about a deal that huge. Mr.Bernick says he thought Mr. Wrigley should \"hit singles\" instead ofswinging for homers. His father \"wouldn't have done that deal,\" Mr.Smucker says. Mr. Wrigley eventually convinced the board, andWrigley beat Nestle SA and Cadbury Schweppes PLC with its $12.5billion bid. But the Hershey trust got cold feet amid community andpolitical pressure and called off the sale at the last minute.

Getting so close to a big deal made Mr. Wrigley more determinedto move into candy. He told workers to internally start calling thecompany the Wrigley Confectionery Co. In 2004, Wrigley expandedinto lollipops and chewy candy by buying assets from the Joyco armof Agrolimen, a Spanish food conglomerate. Later that year, Wrigleypaid $1.48 billion for Altoids, Life Savers and other candy brandsfrom Kraft Foods.

Wrigley is looking at more acquisitions and, at its new researchcenter, scientists are searching for the next big candy. Newproducts now account for 17% of sales, up from less than 6% duringthe late 1990s. Executives won't be specific about what is in theworks, but \"chocolate is within our playing field,\" says SurinderKumar, Wrigley's chief innovation officer.

Some analysts say Wrigley may have overpaid for Kraft's brandsand that weak sales of Altoids aren't a good sign. Mr. Wrigley sayssales are within expectations. And some of Wrigley's new productshaven't panned out. In addition to closing its health-caredivision, the company has pulled back on breath-freshening stripsamid strong competition from Pfizer Inc.'s Listerine brand.

In his office, Mr. Wrigley keeps a picture of his father huddledwith his dogs. In some ways, he says, it was better that his fatherwasn't there when he took over the company. \"Maybe the silverlining in the whole thing is that maybe he realized it would havebeen difficult to coexist with different styles in the business,\"Mr. Wrigley says. His father's passing \"was a graceful exit,although, to put it mildly, hugely unfortunate to lose your fatherat 66,\" he says.

He wishes his father were alive to see how he's made Wrigleygrow. \"My only regret is that I don't have my father side by side,or even off relaxing or retiring on some island, to be able toshare it with.\"

While Mr. Wrigley says he never felt overt pressure from his dadto take over the business, \"you kind of know there's a legacythere. You know your family's been in this business since 1891, andthere's been a sequence of generations running the company.\" Mr.Wrigley says he \"tried to push that into the background and leaveoptions open to me in terms of what I might be interested in doing. . . .And at the end of the day, the reason I did come back to thebusiness is because it was just darn interesting.\"

He isn't insisting that his children follow his career path.\"You get so much influence from your parents,\" he says. \"Theimportant thing is for us to kind of get out of the way and makesure that we don't try and force them into doing something wewanted to do.\"

Questions:

1) What changes did he make after assumingleadership?

2) What were the challenges he faced as the newleader?