Who Should Run The Family Business ?
What are the chances that, out of thousands of candidates for the CEO spot, the son or daughter of the company founder is the most competent of the bunch? Slim to none.
Say you are a member of the Ford family, and your financial security lay in family trusts stuffed with Ford Motor ( F – news – people ) stock. Who would you rather bet on, William Clay Ford Jr. or Alan Mulally, the former Boeing ( BA – news – people ) exec now at Ford’s wheel? In this case, Mulally had the presence of mind to secure $24 billion in funding prior to the recent economic collapse and thus avoided becoming a ward of the federal government, like GM and Chrysler.
The same can be said of the Walton clan at Wal-Mart. When founder Sam Walton died, much ink was spilled over fears that the culture, and thus performance, of the giant retailer would deteriorate. In fact, transition to professional management has yielded relentless revenue growth and profitability.
Remember: It doesn’t matter what the books say a CEO is supposed to do. Figure out what the organization needs, then pick someone who is good at–and passionate about–meeting those needs. And don’t worry about whose name is on the door.
To be clear, I have met many family-member executives who were excellent leaders. But to be fair, the odds are heavily stacked against them.
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