With its slew of Emmys and millions of viewers, the acclaimed HBO series Succession has clearly struck a chord. The comedy-drama vividly portrays an iconic founder dealing with the turmoil that comes with passing the business down to his kids, who each want to run the show.
The Succession story, which every family business founder dreads, has played out over and over in the real world. Take LVMH, the conglomerate behind iconic brands like Louis Vuitton, Moët & Chandon and Givenchy. Its founder, Bernard Arnault, is one of the top five richest people on the planet. Billions in the bank, luxury products at your fingertips — must be nice, right?
Turns out it’s not all smooth sailing. Arnault, 74, faces a succession situation that has drawn comparisons to the hit TV show. Reports suggest he’s weighing whether to choose any of his five children to run the business once he retires.
These are the stories that give family business leaders the chills. Succession drama may make for captivating TV, but it’s the last thing anyone wants for their own business.
I consider myself and the rest of the Schmid family fortunate. My great-grandfather and Crescent Electric founder, Titus Schmid, successfully navigated his succession process with minimal conflict. Though I wasn’t there when he handed the reins to his kids, the family has excelled at preserving our history for future generations. Titus authored 1919 to 1964: The History of Crescent Electric Supply Co., and Mary Daugherty, a Schmid third-generation member, compiled vignettes on the family and company’s history.
It’s been enlightening for me to delve into this history and better understand my roots. It’s also provided valuable context for Crescent’s smooth transition from one generation to the next, serving as a potential blueprint for other family businesses.
Crescent Becomes a Family Business
Titus founded Crescent in 1919. Despite world wars and myriad obstacles, he grew the company. He had seven children, my grandmother being the youngest.
According to 1919 to 1964, by the mid-1940s, Titus’s eldest, Tom Schmid, had returned from World War II service. Titus saw this as an opportune time to discuss the future with Tom and his other sons, John, James and Bill. Rather than coercing them into the business, Titus inquired about their ambitions. They all expressed a desire to build their careers with Crescent, which Titus found gratifying.
This mutual respect set the stage for Crescent to become the multigenerational entity it is today.
The Hard Work Begins
With the company’s future in their grasp, the sons deepened their industry knowledge. Tom led Crescent’s electronics division, while Jim and John attended the General Electric Lighting Institute. Post-Korean War service, Bill joined the family enterprise.
Titus stayed connected to Crescent as his sons assumed more leadership but allowed them the autonomy to shape the company’s future. This balance is often where succession stumbles — the outgoing founder’s reluctance to relinquish control can breed resentment.
Titus achieved a delicate equilibrium, serving as a mentor yet trusting his sons’ strategic choices. An early testament to this was when they proposed investing in a bowling alley, a popular trend in the ’50s and ’60s. Titus’s only contribution was naming it “Creslanes,” signifying trust in their judgment.
By 1966, Tom became president, and Titus transitioned to chairman of the board, marking the official handover to the second generation.
Despite a smooth transition, challenges persisted. Tom, as the company’s new face, garnered significant attention, which could have sown discord. The brothers’ humility and emotional intelligence, likely inherited from Titus, were crucial to Crescent’s succession success.
An Active Community Presence
Titus championed community involvement, as did Tom, who viewed civic engagement as a lifelong commitment. Tom’s presidency spanned 15 years, during which he cultivated Crescent’s growth and values-driven family ethos. After Tom’s passing in 1974, Jim took the helm, presiding for the next 26 years.
Discovering my family’s legacy has been rewarding. Titus’s meticulous records and biography are treasure troves of insight.
Crescent is now managed by professionals, with the family contributing as board members and in various capacities. As my generation, the fourth, ages and assumes greater responsibility, sich as service on the Schmid Family Council, we face different succession challenges than Titus did almost a century ago.
Planning for the Fifth Generation and Beyond
Admittedly, grappling with our legacy can evoke a sense of imposter syndrome. Titus’s entrepreneurial spirit and his sons’ stewardship expanded the business to unimaginable heights.
The third and fourth generations have been pivotal, dedicating hours to the company and establishing our family council. We’re now contemplating how to instill family values and unity in the fifth generation, with plenty of time to strategize.
Based on our history, the key seems to be balancing guidance with independence. I often wonder how Titus so skillfully managed this dynamic.
I remain hopeful that we can emulate Titus’s approach, underpinned by structures for equitable decision-making, educational resources about our business legacy and a bond that keeps us committed to our shared venture.
Aware of the rarity of a family business lasting into the sixth generation and beyond, we recognize the difficulties ahead. The fifth generation might choose a different path, but that will be their call to make.
My aspiration is to uphold our legacy, adapt it to modern exigencies and confidently usher in the next era of Schmids.