I’ve done a wide variety of projects in my career. This one involves the difficult dynamics of succession planning in a family-owned business.
The Founders: Two Brothers Approaching Retirement
Two brothers devoted their careers to building a highly successful manufacturing company creating products based on the unique application a scientific process. They were nearing retirement age and faced with the question of who should succeed them as the next leader of the company.
Each of the brothers had two sons, all four of whom had worked for the family business since graduating from college. Each brother hoped that their own eldest son would be the next President when they retired in three to four years.
The Consulting Project
1. Which of the brothers/cousins, if any, was capable of becoming the next President?
2. Assuming one was capable, would the remaining brothers/cousins support his succession?
Succession was if great importance to the founders’ extended family. The company had become very successful over the years and stock in the company had been been given to the members of the family. If none of the brothers/cousins were capable of becoming the next President or if one was but the other three would not support the decision, the founding brothers had already made the decision to sell the company.
They were reluctant to sell. They had build an organization that treated its employees very well and did not want to leave these valued people at the mercy of a new owner whose values may be very different. Nevertheless, the founders knew they had to protect the financial security that the company had come to provide their extended families.
Assessment interviews with brothers/cousins, the management team, and a sampling of interviews throughout the organization yielded the following findings:
One elder brother was dying to be the next President.
However, interviews throughout the company showed that he had failed to earn the respect of people in the company and would not be trusted as as President. Although an engineer by training, he had focused his career on marketing and had made little effort to get out of the office and out into the company and get to know people. They did not like him personally and they doubted that he had the technical expertise required to make good decisions in such a highly specialized manufacturing process. In addition, his EQ Profile showed that he would likely fail if promoted to President. He was so far off the mark that extended coaching was unlikely to be successful.
He was also subject something I had seen in other manufacturing and construction settings: The marketing function is often misunderstood throughout the company. Marketing’s results are less immediate and measurable than other functions, creating doubts in some peoples’ minds about whether or not marketing is “doing anything useful.”
The other elder brother was not interested in the job.
He worked hard, was technically competent, but he was always ready to leave at 5:00 and get back to his family. He loved being with his family and devoting time to his music, a driving passion in his life. Even if offered the job, he has long ago made the decision he didn’t want to make the commitment necessary to lead the company.
One of the younger brothers/cousins lacked both leadership and technical skills.
He was reasonably good at taking on carefully defined assignments but was generally viewed throughout the company as the least capable of the four. In addition, he was much too reserved, shy, and unassertive to be considered for the position of President.
The youngest of the four showed real promise, given the right development.
The youngest of the four, we’ll call him Ray, turned out to be a diamond on the rough. Rather quiet, he could have been easily overlooked by the family. My interviews revealed that he was highly respected and well liked by people in the company. He had made a personal project of to work in every area of the production process. In doing so, he had come to a deep understanding of the company’s systems and people. The workers respected him for his intelligence as well as his “willingness to get his hands dirty.” He was the only one of the four to have immersed himself in operations. The others had stayed in the office.
In conversations with him, his commitment to the company and the people who get the work done was tangible. His EQ Profile revealed his potential for leadership. He needed to grow in self-confidence and his ability to make important decisions independently. He also needed to develop his capacity to convince, persuade, and assert him.
Fortunately, there was time to develop him. He had three to four years for an accelerated plan of development before the founders were to retire.
Sharing my Findings and Building Support for Ray
1. Meeting with the Founders.
My first meeting was with the Founders. While one of them wanted very much for his eldest son to be the next President, the review of the interview findings and his son’s EQ Profile persuaded him that his eldest would not be able to lead the company into a successful future.
After reviewing my assessments of group, they both had a moment of discovery that youngest of the four was the obvious choice for the job. They both agreed that Ray’s values were just what was needed and that he had time to prove himself worthy of the role as he engaged with the plan to accelerate his development.
2. Meeting with the brothers/cousins individually.
I first met with the eldest of the four who wanted the role. While he was not overjoyed with my assessment of him as inappropriate for the role, the conversation took a turning point when I told him that his eldest cousin did not want the role. There had always been an undertone of competition in their relationship, although it was more of an issue for the one who was so interested in being the next President. After sharing my assessment that the youngest of the group was the appropriate choice, he said that he would support that decision.
Then I met with the other three, saving Ray for last. I needed to meet with the other two first, to review my findings and see if they would support the youngest as the next President. I explained that he would be put on an accelerated plan of development to prepare him for the role. I also explained that if he didn’t measure up by the end of three years, the founders would still have time to find a buyer for the company.
My final meeting was with Ray. I shared my assessment that he was the most appropriate choice for the role and that the other three had already agreed to support him in that role.
3. Group meeting with the four brothers/cousins.
I facilitated a meeting with the group to discuss Ray’s choice as the next President. The meeting gave them the chance to discuss any reservations they might have or any other topic that should be discussed that might impinge on the group’s support for Ray.
There was little to discuss. But Ray did something that confirmed my assessment of him as having a natural leader’s touch. He asked each member of the group if they had any unexpressed reservations and if he could count on each of them for their whole-hearted support. He also each of them to make a personal promise to honest with him in providing feedback that would assist him in his personal development and preparation for the role.
Project Outcome
This project took place about twenty years ago. After assisting in the developmental planning, my project was complete. For the next three years, Ray spent a great deal of time with the founder had been acting as the managing partner, learning more about the management of the company. He also attended university courses on topics such as business and financial management to executive leadership. He also spent a good deal of time in the field getting to know the company’s most important customers and suppliers.
Four years later, the founding brothers retired and Ray was named President. I recent call found him still happy in his role, especially because the company was doing well and had expanded its customer base.
