Patience, my son! Some day, all of this will be yours
Surely any son- or daughter-in-waiting can empathize with the plight of Anthony Marshall, a former CIA employee and would-be Broadway theatrical producer. Marshall’s mother, the late philanthropist Brooke Astor, spent her last 48 years dispensing grants from her husband’s foundation and being celebrated wherever she went as New York City’s Lady Bountiful. Marshall, by contrast, appears to have spent much of that time waiting for his mother to die.
Most news reports have painted Marshall as an ungrateful spoiled brat, if such a term can be applied to an octogenarian. Marshall’s own son, Philip, asked a court in July 2006 to remove his father from Brooke Astor’s affairs, alleging that Anthony was neglecting Mrs. Astor to finance his own theatrical ventures at her expense. A judge agreed, appointing a longtime friend and a bank to oversee Mrs. Astor and her estate, respectively. After she died last August, Marshall was indicted for taking art works from her home and using them, among other things, to increase his salary (as her guardian), to pay expenses related to a Maine property that Mrs. Astor no longer used, and to pay the expenses of a yacht captain.
But if you think Anthony Marshall lacked devotion to his mother, consider: Two of Rupert Murdoch’s three children at News Corp. have left the company since 2000 rather than hang around to learn when their dad, now 76, will relinquish his power. By the time CEO Hank Greenberg was forced out at American International Corp. at age 80 in 2005, both of his sons had long since departed to run their own insurance companies elsewhere. At Viacom, 84-year-old Sumner Redstone’s unwillingness to step aside appears to have alienated his one-time heir apparent, his daughter Shari. By the time you read this, she may be out the door as well.
Brooke Astor, by comparison, was 105 when she died last August. Her son, Anthony Marshall, was 83. He’s exercised power of attorney and control of all her finances for a generation. What he seems to have lacked was the psychological power to liberate himself from his mother’s shadow.
The Astor household was no family business, of course. But it offers some cautionary lessons for family companies. Children of family CEOs devote great gobs of time and energy to a single activity—waiting—and goodness knows Anthony Marshall did plenty of that. At some point a family business inheritor needs to feel he’s his own man—which Marshall seems to have been unable to do. His mother soaked up the limelight while Marshall was stuck with the dreary burden of caring for her mundane personal needs, at an age when someone should have been caring for his mundane personal needs.
Family business executives are often characterized above all by patience and loyalty—to relatives, to the company and to its products, employees, stockholders and suppliers. Entrepreneurs, by contrast, are characterized by impatience and opportunism. In an ideal world, as I’ve suggested before, family business executives would think more like entrepreneurs, and vice versa.
Had Anthony Marshall been an entrepreneur by temperament, he would have gotten a life of his own, just as Hank Greenberg’s sons and two of Rupert Murdoch’s sons did. He would have raised outside funds for his ventures instead of playing the suffering and resentful son to the miserable end. Lack of funds was never his problem.
As the French film actress Jeanne Moreau once put it, “It is not the rich who are powerful; it is the people who feel themselves free.” If you run a family business or are waiting to run one, ask yourself some of the questions Anthony Marshall should have asked himself. Such as:
• “How free do I feel?”
• “How can I encourage my own (and my family’s) entrepreneurial instincts?”
• “How can we set up a system so that family members have a vested interest in their elders’ survival, instead of their demise?”
Only you or your therapist can answer the first question. For some light on the other two, see the Benetton box below, and consider my next item.
How Benetton stays fresh
Want an example of a family that thinks entrepreneurially? Consider the Benettons of Italy, who seem to possess a gene for reinvention. As billion-dollar family firms go, Benetton is relatively young: It was launched in 1965 and only recently passed to the Benetton family’s second generation. Yet the firm has already diversified away from the trendy clothing products that built its initial success.
In the 1980s Benetton got into Formula One racing to promote its clothing brand. Then, when Italy’s motorways and motorway catering services were privatized, the Benettons moved in that direction: Their interests in Atlantia (formerly Autostrade) and Autogrill now account for well over half the family’s estimated net worth of $13.5 billion.
This diverse range of products and services leaves plenty of opportunities for the 14 cousins in the family’s second generation. The firm’s new chief, 43-year-old Alessandro Benetton, has already demonstrated his entrepreneurial credentials as founder (in 1993) of one of Italy’s early private equity firms, 21 Investimenti. That venture taught him to evaluate investments and to function as an active shareholder. Prior to that, in his 20s, Alessandro spent five years as chairman of Benetton’s successful Formula One racing team—demonstrating, he says, that the Benettons could “be serious, competent and competitive in a technical sector—and do other things than just make T-shirts.”
His founding father, Luciano Benetton, brought flair and individuality to the firm—the most important qualities for a new fashion house eager to make its mark. Alessandro brings structure, theory and attention to detail—the qualities a firm needs to remain successful. Where many family business leaders follow their instincts, Alessandro is a Harvard Business School grad.
His admiration for his father hasn’t blinded Alessandro to the need for change at Benetton’s clothing group, which faces challenges from trendy fashion competitors (like Sweden’s H&M and Spain’s Zara) that are as innovative and hungry as Benetton was 40 years ago. “It had enjoyed 40 years of success,” he says, “but we needed a different approach, one that builds on rather than erodes what has been created.”
What about the inevitable jealousies and turf battles within a family with 14 cousins? Benetton family members who want to run Benetton’s clothing group are first required to prove themselves in other divisions or in outside ventures, as Alessandro did. “We have many businesses, fortunately, as we are a large family,” he observes.
Contrarian Follow-Up
Catching up on entries from my previous columns.
The bickering Bancrofts: After nearly 80 years, Clarence Barron’s descendants lost control of Dow Jones & Co. to Rupert Murdoch’s News Corp. because, I contended, the family lacked business acumen as well as a recognized leader: “A generational rift was said to have broken out between the family’s younger members (who were more receptive to Murdoch’s offer) and the older ones” (FB, Autumn 2007).
Follow-up: Under terms of the sale, the Bancrofts were entitled to elect one director to News Corp.’s board. But the family missed the contractual deadline for doing so. Granted an extension, they finally settled on Natalie Bancroft, a 27-year-old opera singer living in Europe who, by her own admission, is a relative neophyte to the worlds of both journalism and commerce.
The bickering Ambanis: Dhirubhai Ambani built Reliance Industries into India’s largest conglomerate but somehow neglected to leave a will when he died in 2002. His sons Mukesh and Anil, who’d already been feuding, fell out so badly after their father died that they didn’t meet for more than a year and subsequently broke the empire into two pieces. My suggested moral for family business patriarchs: “Write your will. Do it sooner rather than later. Come to think of it, why are you reading this column when you could be at your lawyer’s office?” (FB, Spring 2005).
Follow-up: Will or no will, both Ambani brothers are managing just fine. Thanks to India’s sizzling stock market, the two brothers’ combined net worth recently approached $100 billion, analysts say.
Murdoch’s last heir: As recently as 2000, three of Rupert Murdoch’s four adult children were working at News Corp., the family’s media conglomerate. The sole survivor, Murdoch’s second son, James, “is only 33 and apparently skittish about managing his father’s huge and disparate collection” of properties (FB, Winter 2006).
Follow-up: James Murdoch has apparently proved his worth. Analysts and investors complained of nepotism and inexperience in 2003 when James was appointed as CEO of News Corp.’s British Sky Broadcasting Group. By the time James stepped down this past December, it was his rivals who were complaining—that he had so strengthened a previously stagnant operation that Britain’s competition regulators should intervene. James was promoted to a new role in which he’ll oversee News Corp.’s media businesses in Europe and Asia, a move that puts him in line to succeed his father as CEO.