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Sunday, May 31, 2009

Succeeding At Ping - Part 2 of 4

This series looks at what's next for Ping Golf as the company celebrates it's fiftieth anniversary this year.

As with any family business, Ping's path hasn't always been smooth. Karsten Solheim, who suffered from Parkinson's disease and died at age 88 in 2000, was a brilliant engineer, but his management style evokes mixed reviews from family members and longtime employees. "Karsten's Way," the name of a street on the company campus, also describes the man's strong grip on the corporation's direction.
"Growing up, I was told there was the right way, the wrong way and Karsten's way," says John's youngest son, David, 28, who works in corporate communications. "Whenever you start up your own company, you can tell people the way you want things done. It's been a while since he was here, but that idea has not left the place."
"Part of the Karsten way is doing things right because it's the right thing to do, not necessarily the right business thing to do," says Stacey Solheim Pawels, Karsten's granddaughter and John's niece, who is vice president and corporate secretary.
Karsten's way brooked no opposition, whether from within the company, the family or the powers-that-be in the golf world. In 1961, he created another revolutionary product, the cavity-back iron. The initial primitive version became the Ping Eye2, a forgiving, game-enhancing club that, along with an innovative custom-fitting system, gave Ping a commanding 40% of the market for irons in the 1980s. The clubs also caused immense trouble for the company and the family. In 1988, the United States Golf Association ruled that the clubs didn't conform to the rules of the game. The next year, the PGA Tour announced they would ban the clubs, too. A long legal battle ensued.

That battle was a source of friction between John and his father.
"The USGA thing really strained our relationship," John says. "I wanted to get it over with because it was draining him so much."
Karsten also refused to introduce any new irons until the suit was settled. In 1990, the USGA settled by approving the old clubs while Ping agreed to design changes for new ones. The PGA Tour suit wasn't resolved (with acceptance of the design) until four years later. While Ping litigated, the rest of the industry moved forward technologically, beating Ping to market with lucrative metal and titanium woods.

The relationship between the two men had always been somewhat problematic. Even when he was making clubs as a teenager, John writhed under his father's management. One early issue was money:
"There was a shopping center that came into the area and I went there and applied for a job. It was only after that that I got paid [for working in the family business]," he recalls. "I got $2.50 a putter, but if I needed help to get the job done, I had to pay the employees out of my own pocket. I had some of my high school friends helping."
The real internal battles came when it was time for Karsten to step aside.
"My dad didn't want to let go," John says. "He would never talk about not being there. That made the planning pretty difficult."
It was even more difficult when Karsten became ill.
"When the Parkinson's started to get to him, I realized I needed to step in," John explains. "I discussed it with him, but he didn't want to do that [step down]. Finally, before a board meeting, I told him I wanted to nominate him for chairman, which we'd never had before, and he would nominate me for president. He had a few words in private with my mother, and that's the way it happened."
John later learned that his father had made the decision to turn over voting control of the company stock to him some time earlier but kept it secret as he held on to the bitter end. His two older brothers were co-executive vice presidents until they retired.

This article appeared in Family Business Magazine, Summer 2008

Dave Donelson, author of Heart of Diamonds a about in the

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