What makes succession planning so challenging? There are no easy answers or fill-in-the-blank forms. The TV series Succession has certainly made business transition a sexier topic. On top of that fictional account of family power struggle to take over a family enterprise, the media coverage is replete with real-life examples of succession intrigue. Here are three real-world “dos and don’ts” from recent stories of succession.
Do: Exhibit Good Leadership Skills
H-E-B grocery is a multiple recipient of the Dunnhumby award as the top U.S. grocery retailer, named for owner Howard E. Butt. In the article, That Time I Met the Owner of H-E-B, and Drove Through a River, Christopher de Vinck credits H-E-B’s succession win with the strong culture the Butt family instilled in their Texas grocery chain. Originally founded by Florence Butt, the business passed from her to son Howard Sr., then to Howard Jr., and now to other Butt family members. Howard Jr. challenged his team with this question: “Is our work a paycheck or a calling?” As a leader, Butt lived by his motto “The High Calling of Our Daily Work” and taught “the difference between a company that only cares about money and a company that cares about the customers.” Butt passed down that “spiritual beauty of the best entrepreneurial practices.” Crediting Butt’s values-based leadership for H-E-B grocery’s business continuity, de Vinck sums up the reason for their success: “What a leader says at the top filters throughout the system.”
Don’t: Ignore Planning
Three months before French fashion designer Pierre Cardin died at 98 of COVID-19, he boasted to a reporter: “After my death? I don’t think about it. I didn’t organize anything. NOTHING.” The result: a notorious legal battle among 22 family members claiming to be heirs. Cardin, who never had children, left behind an UNSIGNED will designating one nephew Rodrigo to take over his 99.999% ownership. Unsurprisingly, a Paris court ruled the will invalid. As Dana Thomas quotes in her article in The New York Times, A Tale of Family Intrigue and Inheritance, “He didn’t want to hand over his power. He wanted to keep it until the end.” Worse yet, Cardin refused to create a legally binding succession plan for his family: “Every time we said, ‘Let’s go to the notary and put it down on paper,’ he canceled at the last minute. He couldn’t imagine someone replacing him.” He saw himself as indispensable, bringing to mind another famous Frenchman Charles de Gaulle who wisely admonished: “Cemeteries are full of indispensable people.” Cardin is in one of those graves now while his family feuds over the mega-mess he left behind, three wanting to continue the legacy and 19 wanting to sell and cash out.
Don’t: Create Irreparable Discord
Can it get worse? Consider the drama playing out in real time in the Hermes luxury fashion house. Nicolas Puech, also childless like Cardin, is a fifth-generation billionaire owner who has ignited a bitter succession war within the Hermes dynasty. Observe this real-life story in which truth is stranger than fiction. “The Hermes descendant is adopting his 51-year-old gardener and designating this ‘handyman” from a ‘modest Moroccan family’ as his rightful heir,” according to an article in the New York Post. His actions have triggered “an acrimonious battle within the family … [and] irreparable discord with his kin.” Puech had previously pledged his fortune to the Isocrates Foundation, who “opposes any unilateral cancellation of the inheritance contract.” Was it a “contract” or a revocable pledge? Let’s watch to see how this ugly showdown unfolds.