hen Carlson Cos. chair and CEO Marilyn Carlson Nelson speaks of the "Carlson family," she usually is referring to the 198,000 employees who work for her.

And in all likelihood, her warm words about employees are heartfelt: Carlson Cos. is on both Fortune and Working Mother magazines' lists detailing the "100 Best Companies to Work For."

But there's family, and then there's family. Nelson has said that while some businesses look at development in terms of quarters or years, hers thinks in generations. And with the promotion of her son, Curtis Carlson Nelson, to president and chief operating officer earlier this year, the privately held firm inaugurated its third stage of family leadership.

Marilyn Nelson's personal style and business priorities differ somewhat from those of her late father, Curt Carlson, and in her son one can see yet a third dynamic at play. But she points to one constant that has helped define the company from one generation to the next: "At the very core of our being is relationships."

Relationship focus moved from a mission statement to a profit center when, earlier this month, Carlson acquired Peppers and Rogers Group, the preeminent customer relationship marketing company. They're the one that coined the term "one-to-one marketing."

But there also are relationships within Carlson of a more personal kind. During the Carlson Cos.' growth, the blending of family relationships and corporate politics has from time to time spilled over onto the pages of business journals and Minnesota newspapers. But since Marilyn's ascension to CEO, things have, by and large, been kept all-in-the-family.

Curtis Nelson says family dynamics, particularly between him and his grandfather, played a crucial role in his deliberations about whether to get involved with the company.

"I actually anticipated I'd be working outside the family business," Curtis told me last week. "Growing up, I had long conversations with my grandfather. I had tremendous respect and admiration for what he did in building Carlson. But I didn't want to just join the family company -- I wanted to do what he did, do it all over again -- build a great company from scratch."

Curtis was drawn to both the restaurant and hospitality businesses. (His first job was washing dishes at a restaurant called Country Kitchen.) He went on to graduate from the hospitality school at Cornell University, working for Marriott while in school and for Hyatt just after graduation.

His grandfather wanted him in the business, and so the two began a second round of long conversations. The topic was what Curtis says is his motivation for being in business: job creation and philanthropy. "He showed me how growth in those areas is exponential for large, established companies -- I could do more working within Carlson than by spending years building a new company. So I decided to get involved."

From what little exposure I've had seeing Curtis and Marilyn Nelson together, they treat each other with warmth, professional courtesy and respect, but one can only imagine the difficulties of reporting to one's mother. He's careful to always refer to her as "Marilyn," but whether she's Marilyn or Mom, she wants more than just her son's love -- she wants 20% compounded earnings growth annually. Yellow roses may be appreciated on Mother's Day, but Curtis must be aware of the legacy that Curt Carlson left: It's a family business, but it's first and foremost a meritocracy.

Family businesses are integral to the industry. Tour operations are handed down from parent to child, small travel agencies are referred to as "mom-and-pop." I think that explains why there was such interest in the sale of Rosenbluth International to Amex -- the industry felt emotionally drawn to the story.

Marilyn Nelson said, "At the very core of our being is relationships." Her company shows that when professional and family relationships mesh, the results can be very profitable indeed.


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