Have you seen the show about the business leader who runs for president? I don’t mean the morning news, the evening news or any news. I mean How to Succeed in Business Without Really Trying, a Broadway musical that starred Robert Morse (1961), Matthew Broderick (1995) and Daniel Radcliffe (2011). There’s also a 1967 film, with Morse and several of his Broadway costars. If you can find it, you might enjoy watching it.
The musical and film were based on a 1952 book by the same title, written by Shepherd Mead. The story begins with the protagonist, J. Pierrepont Finch, reading a self-help book, titled (as you may have guessed) How to Succeed in Business Without Really Trying.
In the real world of business, can one succeed without really trying? That’s a valid question, I suppose. In the real world of family business, in order to succeed at succession, you have to really try — and try really hard. The family’s wealth and legacy are at stake, so it’s essential to choose someone who will move the business forward.
Does the top candidate have the proper training and experience to do the job? Once they’re behind the desk, will they do the job? Are they aware of all the responsibilities the role currently entails, and what it will involve in future years? Do they really want the job, or are they accepting the role reluctantly? (If so, odds are this will not end well.)
Generations ago, it was assumed that the eldest son would succeed his father. Most family business owners today are open to considering a daughter, nephew, niece or stepchild as a viable CEO successor. (Even the British royal family ended its system of male primogeniture in 2013.)
And, as this magazine’s annual “Family Business CEOs to Watch” feature has proved, seasoned non-family executives can bring prosperity to enterprising families. Many business owners treasure their non-family CEOs, and some consider them honorary family members.
Yet there are still some families who think a non-family leader is a bridge too far. In my years of family business chit-chat, I’ve often been told, “We had to sell our business because none of our kids wanted to run it.” That may well have been the best choice for their family, but it’s too bad if they believed it was the only choice available to them.
Preparing the family
Most business owners recognize the importance of preparing prospective successors for their future role. But not everyone understands that the family must also be prepared for succession. Family stakeholders must view the selection process as fair.
What might happen if they don’t? Consider the Legal Sea Foods restaurant chain. In the early 1990s, George Berkowitz named his son Roger as the company’s CEO. That angered Roger’s brother Marc, who thought he should have been considered for the job. Marc left the company, filed a lawsuit and opened his own restaurant business. (In 2020, Roger Berkowitz sold Legal Sea Foods’ restaurants to focus on ecommerce.)
More recently, the Wall Street Journal reported in November 2023 that members of the Lauder family, who own nearly 35% of the stock and control more than 80% of the voting power at publicly traded Estée Lauder, are divided over whether to continue supporting Fabrizio Freda, the non-family CEO, or to replace him. The Lauder family’s wealth declined by about $15 billion in 2023 as its share price has fallen, the Journal reported. Freda is the first CEO from outside the family or the company. Jane Lauder, the executive vice president of enterprise marketing and chief data officer, is a possible contender to replace Freda, the article noted. She is a cousin of executive chairman William Lauder, who led the company from 2004 to 2009 and supports Freda.
It’s easier for the family to unite in support of the CEO when the business is making money for the family — but even that is no guarantee against lingering resentment. The best way to foster unity is to bring the extended family together for education about the business, open discussions and fun experiences. In other words, you must really try.