fhome business Make compelling drama.Just ask anyone who watched the final season of “Succession,” which started airing recently home theaterThis Bartleby prefers “Buddenbrooks,” Thomas Mann’s chronicle of the decline and collapse of a German merchant family over the course of four generations. First published in 1901, the novel draws heavily on the author’s personal experiences. The plight of working in an organization run by an immediate family member or in which they own a majority stake sounds shocking enough in fiction, let alone real life. Even without plot twists, nepotism can be very dramatic.
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These days, it’s frowned upon – most public and professional firms ban it. Despite this, family businesses still account for more than 90% of global businesses. Many of them are mom-and-pop shops, literally. Some are large businesses in small economies, such as one in Athens, where Bartleby, a recent college guest, manages relationships with institutional investors. A few are large global corporations: think Rupert Murdoch’s media empire (which supposedly inspired “Succession”) or Bernard Arnault’s $460 billion luxury conglomerate, LVMH (It happened to grow through acquisitions of other family businesses like Bulgari and Fendi).
All family businesses, regardless of size, face common challenges. Filial piety and multigenerational thinking can translate into resistance to change, and if a company has outside shareholders, it can conflict with their interests. The process of passing generations can be especially exhausting and frustrating for non-family members, raising troubling questions about social mobility, or lack thereof.
For corporate heirs, meeting family expectations and continuing a legacy while achieving personal achievement can create a host of tensions, as Mann brilliantly articulates. Even in a company that insists on meritocracy, no amount of skills can convince all your colleagues that you actually earned the job. Any pre-existing domestic frictions could affect businesses. And the reverse is also true: Disagreement in business breeds hatred, often between siblings. In India, a bitter feud between Mukesh and Anil Ambani over their inherited empire, Reliance Industries, has raged for years after their father died without a will .
No wonder some heirs decide to keep their shares, maybe board seats, but pursue careers elsewhere. Not all Waltons work for Wal-Mart; it’s rare to find someone like Hoffman among executives at Roche, the Swiss pharmaceutical giant founded in 1896 by their predecessors. Thus, they avoid being accused of belonging to the “lucky sperm club,” as Warren Buffett calls those who may have the management skills to lead a large organization but have never experienced the same predicament as everyone else. Hilton and Marriott, two of the world’s largest hotel chains, and Lego, the toy-making giant, are examples of companies that failed to produce strong successors and ended up in the hands of professional managers.
It doesn’t have to be a poison for those who still decide to take an active role in the family business. Some of the logic that historically made family businesses a necessity still holds.For example, designated heirs – such as Mr Arnault’s five children, who now run parts of the LVMH– Training early on, so by the time they’re ready to take over, they’ve already acquired some industry knowledge through osmosis.
On a personal level, work isn’t just about money, it’s about empowerment and prestige. Your name on the door may give you a sense of purpose. As long as the heirs show enthusiasm and perseverance, protecting the legacy of the empire is worthwhile. When it comes to office gossip, they may be able to forget that they are a gang, but they can earn the respect of colleagues and subordinates through humility and hard work. Serious heirs know that showing up just because it’s easier than risking it yourself isn’t going to solve the problem.
Ultimately, being commissioned to conduct business by someone who shares your interests DNA is something you should earn, not expect. As the proverb goes, “A family business is not a business you inherit from your parents, it’s a business you borrow from your children.” Disregarding this point of wisdom is what makes “Inheritance” such a compelling TV show, and Waystar Royco is so dysfunctional.
Read more from Bartleby, our columnist on management and work:
There are risks in adopting a zero-tolerance approach to genius jerks in the workplace (March 30)
How to get flexible working rights (March 23)
From high-speed rail to the Olympics, why do major projects go wrong? (March 16)
Plus: How the Bartleby column got its name
