Abstract
Any broad review1 of the literature on family enterprises will come to two conclusions:
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CEO succession is by far the most commonly addressed issue.
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A (if not the) critical determinant of whether or not a firm remains in the hands of the founding family is the latter’s ability to manage the succession process.
No matter how much wisdom may go into planning, whether it be an insurance program, an armed invasion of a continent, or a campaign to reduce the inroads of disease, the measure of its success always will be the spirit and mettle of the individuals engaged in its execution. No matter how much treasure may support a project, or how elaborate its organisation, or how detailed and farsighted its operational scheme, the human element is always the central one.
(Dwight D. Eisenhower, former US President, 1890–1969)
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Notes
Longenecker and Schoen have provided a seven-step model that they entitle ‘Framework of Analysis Stages of Father-Son Succession’. The steps are labelled as follows: pre-business, introductory, introductory-functional, functional, advanced-functional, early succession and late succession. See J. G. Longenecker and J. E. Schoen, ‘Management Succession in the Family Business’, in C. E. Aronoff, J. H. Astrachan and J. L. Ward, Family Business Sourcebook II, Marietta: Georgia, Business Owner Resources, 1996, pp. 87–92. We shall draw from their model later in this chapter.
I. S. Lansberg, ‘The Succession Conspiracy’, Family Business Review, vol. 1, no. 2, (1988), p. 120. We highly recommend this classic article, especially to founders and owner-managers who are having trouble coming to grips with their own succession.
Quoted in D.A. Kirby and T.J. Lee, ‘Research Note: Succession Management in Family Firms in the North East of England’, Family Business Review, vol. IX, no. 1 (Spring 1996), pp. 72–80.
This conclusion is shared by Malone: ‘firms that consciously plan for continuity are more likely to survive’. S. C. Malone, ‘Selected Correlates of Business Continuity Planning in the Family Business’, Family Business Review, vol. 2, no. 4 (1989), p. 341.
A. Turner Foster, ‘Developing Leadership in the Successor Generation’, Family Business Review, vol. 8, no. 3 (Fall 1995), p. 201.
The following discussion on departure styles has been influenced by and some of the labels taken from J. Sonnenfeld, The Hero’s Farewell, New York: Oxford University Press, 1988.
H. Levinson, ‘Conflicts that Plague the Family Business’, Harvard Business Review, March–April 1971, p. 91.
J. Davis and R. Tagiuri, Life Stages and Father-Son Work Relations, Owner Managed Business Institute Santa Barbara, 1989.
R. F. Vancil, Passing the Baton, Boston, Mass.: Harvard University Press, 1987.
R. G. Donnelly, ‘The Family Business’, Harvard Business Review, July–August 1964, pp. 101–2.
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© 1998 Fred Neubauer and Alden G. Lank
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Neubauer, F., Lank, A.G. (1998). Securing CEO Succession as a Key Governance Measure in a Family Business. In: The Family Business. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-14465-5_6
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