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Eric Allyn, former chairman of of medical technology maker Welch Allyn, speaks at the Families in Business conference Oct. 8.

Eric Allyn, former chairman of the board of century-old Skaneateles, New York, medical technology maker Welch Allyn, spoke Oct. 8 about the recent sale of the company and the internal workings of the business prior to the sale. The lecture was part of the first Families in Business conference at Cornell, hosted by Smith Family Business Initiative at the Samuel Curtis Johnson Graduate School of Management.

Welch Allyn was started in 1915 by Eric Allyn’s great-grandfather. The company came from “humble beginnings,” initially making medical diagnostic equipment. Welch Allyn also produced light bulbs in the 1950s, fiber optics in the 1960s and developed a bar-code business that was spun off in 1999. While the company primarily focused on medical technologies, Welch Allyn also had success with nonmedical technologies, Allyn said.

Allyn provided an overview of his family’s leadership of the company, primarily focusing on the third, fourth and fifth generations. He noted the importance of comprehending the family dynamics that affected the operations of the business to understand “how you deal with family in a family business.” It was in the third generation that family dynamics had the greatest impact on the business.

Allyn’s father, Bill, his uncle Lew, and his uncle-in-law Peter shared a good amount of dissent. “The conflict here was horrible, it was terrible,” Allyn said. For this reason, he stressed the necessity of reconsidering governance as the  generations advance and the need for educating this next generation. Eric Allyn’s generation, the fourth, forced a major change in the business: The third generation essentially was removed from the business in favor of retaining a majority-independent board. Allyn explained the necessity of this move. “We were making [business] decisions that were based on rivalries,” he said, and the baggage created by the third generation resulted in a conflict that played out over the course of 10 years, both in the family and in the business.

Welch Allyn was sold to Hill-Rom in June. The company had been facing challenges in growing revenue as the increasing consolidation in the medical industry shifted the way medical supplies were being sold. Allyn said it was specifically because of the independent board that the company explored a sale at all. While still a sad outcome for some in his family, Allyn said, this was the best possible outcome for the business and one that would have been harder to achieve had the third generation not been removed from active management in the company.

Aaron Coven ’16 is a writer intern for the Cornell Chronicle.