Julia Flynn Siler, House of Mondavi

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The House of Mondavi covers almost all the pitfalls a family business is vulnerable to. What do you see as some basic things family businesses should do to avoid the same mistakes the Mondavis made?

Probably the most crucial lesson to be learned from what happened with the Mondavis was that the key family shareholders either need to have a structure in place so that they vote the same way and share the same vision or there must be a mechanism of some sort to effectively deal with those differences, with the end result being that there is a united front in the family. Through much of the history of the Robert Mondavi Co., the four principal family shareholders didn’t agree with one another.

You discuss Robert Mondavi, founder of the Robert Mondavi Winery, hampering the business through his attitude toward his sons’ role at Mondavi. What were some of his biggest mistakes?

Like his own father, Cesare, Robert very much wanted Michael and Timothy to work together. He was very much behind the idea of a co-CEO arrangement between his two sons. In fact, when the company went public in 1993, Michael and Timothy were co-CEOs at that time, although neither of them had advanced degrees, and they didn’t get along very well with each other. They had very different views, even then, of the direction the wine industry was taking and the direction the company should take. Going public exacerbated those differences, as well as putting them each personally under an even harsher spotlight.

When Robert and Margrit Mondavi pledged their contributions to the Mondavi Center for the Performing Arts in Davis, they were already overstretched financially. Would you discuss what prompted them towards philanthropic giving at that point?

I believe they made the bulk of their gifts in the late ’90s, at which time the stock of the Robert Mondavi Corp. was soaring, and it did not appear to them or to their advisers that there would be any problem in meeting those commitments. It was only after 9/11 and after a series of business setbacks at the Robert Mondavi Corp. that the stock plummeted. Once it dropped below $20 per share, Mr. Mondavi and his advisers realized that he was in fairly serious financial trouble and that he was facing insolvency. The Mondavis and their advisers were very seriously looking for a way to boost the stock price, and that ultimately set in motion what became a board coup and the family’s loss of voting control over the company.

How did the Mondavis change Americans’ perception of wine?

Robert Mondavi’s contribution was the idea that wine is a civilizing beverage and part of the good life. Previous to this, remember, we had hearty burgundy and jug wines. Wine was perceived as really a lower-class immigrant drink. The best restaurants in New York in the early ’60s, late ’50s only served French wines; they didn’t serve California wines. Robert Mondavi was really tireless. He would go into those restaurants in New York and he would line up the most beautiful French Grand Crus with his best wines. He really convinced people that California, and particularly Napa Valley, could produce world-class wines. That will be his legacy.

How did the Mondavis change the wine industry?

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