Case Study: A Patriarch’s Dilemma
Shamus, 72 years of age, immigrated to the USA as a young man, with the typical $1.00 in his pocket. He proceeded to build a wonderful commercial real estate construction business over a 40-year period. He also married twice and had 7 sons…. all of whom eventually joined him in the business. The eldest was in his early 40s and the youngest had recently turned 30. All the siblings got along and enjoyed working with their dad.
Like most business patriarchs who are fortunate to have their sons and daughters desire to follow in their footsteps, there comes a point in time where they need to consider succession. What is the obvious choice? Well, if you come from certain cultures, handing the reigns of the business over to the eldest is natural. Many cultures share that perspective.
Well, here is the dilemma. In their heart of hearts, patriarchs know which of their offspring is most suited for leading their enterprise and have a pretty good idea of the roles that others would be best at playing.
But then there is reality. First and foremost, patriarchs are petrified of alienating any of their children, least of all their eldest. And, when the patriarch’s spouse plays a significant role whether in business or family matters, or both, patriarchs are equally concerned about not garnering the wrath of their spouse, who in turn is also concerned about maintaining family unity. And, if there are grandchildren involved, well, multiply that by a hundredfold; the fear is even greater when the patriarch and their spouse are fearful of losing contact with their grandchildren should they alienate their own children through the succession process.
So here is a model I tried, fortunately successfully and have since repeated, to help the patriarch navigate these potentially very rough waters. I essentially took the decision out of their hands and put it into the hands of the offspring themselves. How did I do that?
Well, I started by facilitating several meetings with the siblings and father to detail the picture of an ideal leader for the organization, both currently and into the future. The attributes consisted of technical and business know-how, leadership effectiveness both for today and the years to come, and a variety of additional attributes deemed essential to the on-going success of the company. We drove to agreement and commitment that the sibling whose profile most closely resembled the ideal would be selected to lead the enterprise, albeit some executive coaching would likely be required.
Once this first phase was completed, each of the sons were subjected to an intense, structured, behaviour-based interview and a battery of psychological tests selected for their ability to tap into the attributes and skills deemed essential for leading the enterprise once Dad stepped down, or rather stepped up into the chairman role. With the data in hand, the siblings were invited to a meeting room where 7 profiles, without names, were displayed on the walls as if it were a museum viewing gallery. They were given ample time to read and digest the profiles of each person and then rate them from 1-7 based on who they believed were most suitable for the penultimate leadership role.
Now, since everyone knew the ideal profile prior to the interview and assessment process, it was likely that each person would either consciously or unconsciously try to game the tests. Well, Psychologists happen to have access to tools which can identify response bias, that is to say, answering questions in a way which is consistent with how you would like to be seen rather than how you actually function. These tests factor in for that bias into the overall scores. Additionally, by including a 360-degree leadership assessment tool and interviews, we not only have the benefit of a self-assessment, but we also have in hand the views of others. Any disconnect becomes obvious. Additionally, behaviour-based interviewing asks for specific examples to support assertions which interviewees make about themselves, and answers are then rated according to the ideal that is being considered.
So, once everyone had rated the profiles on the 1-7 scale it was a simple matter of seeing which profile garnered the highest ranking overall. In fact, in this instance it wasn’t even close. I won’t tell you which son actually was identified to be the successor, but I will tell you that the one selected was the son I knew in advance was thought by the patriarch to be the most likely to succeed.
There is much more to the story which emerged over the years working with this family. Suffice it to say that this son who is now in his mid-40s has grown the company into a global behemoth. He has appointed several of his brothers as heads of various geographic or functional divisions and created adjacent companies which are also run by his brothers.
And the patriarch? Well, he is now in his 80s and still comes into an office on a somewhat irregular basis, and almost never during the winter months.
Gerald Pulvermacher & Associates is a global, boutique consultancy focused on supporting family businesses and family offices in issues of succession, governance, strategic planning, leadership development and dealing with challenging family issues. With professionals located in South Florida, California, New York, Philadelphia, New Jersey, Albuquerque, Toronto, Ottawa, Vancouver, London, Lisbon, and Paris, GPA is well-suited to deal with local or global families and has done so for almost 5 decades.