In today’s dynamic and highly competitive corporate landscape, families in business looking to develop a competitive edge and retain a strong family bond, can cherry pick successful practices from leading global business families to develop their own unique succession plan.
Here are some lessons identified from highly successful business families.
Communication
One of the biggest takeaway’s from the Rupert Murdoch family dispute, for control of his media empire is the importance of communication. Rupert Murdoch took proactive steps to formalize his succession plan by setting up an irrevocable trust, and the structure of the trust was communicated to all relevant stakeholders. However, as family dynamics changed and conflicting interests became visible, the Murdoch patriarch looked to restructure the trust and address his concerns, rather than leave it to fate to play out after his demise.
Months of legal battle ensued, and when the legal route failed, ultimately, the family dispute was settled through communication and negotiation.
Regular revisiting of the succession plan will help families identify changing dynamics and modify the succession plan accordingly.
Strong family ethos
For the Missoni family, one of Italy’s leading fashion design dynasties, family life and business are intertwined. The innovation and creativity that is the pillar of their fashion brand, is deeply routed in the family lifestyle. Creative freedom and innovation is encouraged in every aspect of family life and is visible in the family’s bohemian lifestyle. The family lifestyle is a constant source of inspiration for the fashion brand and most members of the family from across multiple generations are encouraged to contribute to the creative direction and operation of the family business in one shape or another.
Lifelong preparation for leadership
CEO of LVMH, Bernard Arnault spent decades nurturing and grooming his children for leadership roles in the family conglomerate. One of the most significant practical steps taken to ensure that the business remains under family control is that each of his children has worked in the family business, after having received world class education from leading global institutions.
Their impressive educational achievements has laid the foundation for them as well qualified candidates for leadership, however, the deliberate and intentional integration of all of his children into the business from a young age, grooming them for possible succession, will leave shareholders with a sense of confidence, stability and trust in their ability to continue to steer the business positively for years to come.
Carving individual paths under the family umbrella
The Mukesh Ambani family is one of Asia’s richest dynasties, having amassed a fortune courtesy of Reliance Industries. Mr. Ambani has taken proactive steps to avoid the bitter succession battle he faced with his brother Anil, when inheriting the family business established by their father.
The Mukesh Ambani family embrace diversification of business interests within the family conglomerate. The three children of Mukesh Ambani hold significant roles within the family business, but each stewards a different operation based on their passion, strength and expert capabilities, allowing the empire to operate multiple successful business streams, while avoiding conflict and maintaining family cohesion.
Developing a well thought out succession plan is crucial to maintaining continuity, family prosperity, reputation and a competitive edge for all family’s in business with long term ambitions.