What makes succession planning so challenging? There are no easy answers or forms to fill out. The TV series Legacy it has certainly made business transition a sexier topic. On top of that fictional story of a family power struggle to take control of a family business, media coverage is filled with real-life examples of succession intrigue. Here are three real-world dos and don'ts from recent legacy stories.
Do: Demonstrate good leadership skills
HEB Grocery is a multiple recipient of the Dunnhumby Award as the best grocer in the US, named by owner Howard E. Butt. In the article, That time I met the owner of HEB and drove through a river, Christopher de Vinck credits HE-B's successful win to the strong culture the Butt family instilled in their Texas food chain. Originally founded by Florence Butt, the business passed from her to son Howard Sr., then to Howard Jr., and now to other members of the Butt family. Howard Jr. challenged his team with this question: “Is our work a salary or a calling?” As a leader, Butt lived by his motto “The High Call of Our Daily Work” and learned “the difference between a company that only cares about money and a company that cares about customers.” Butt conveyed that “spiritual beauty of entrepreneurial best practices.” Crediting Butt's values-based leadership for the continuity of the HEB grocery business, de Vinck sums up the reason for their success: “What a leader says filters through the entire system.”
Don't: Ignore planning
Three months before French fashion designer Pierre Cardin died at the age of 98 from COVID-19, he boasted to a reporter: “After my death? I don't think about it. I didn't organize anything. NOTHING.” The result: an infamous legal battle between 22 family members claiming to be the heirs. Cardin, who never had children, left behind an UNPROVIDED will, appointing a grandson Rodrigo to take over his 99.999% ownership. Surprisingly, a court in Paris declared the will invalid. As Dana Thomas cites in her article on New York Times, A tale of intrigue and family legacy, “He didn't want to give up his power. He wanted to keep it until the end.” Worse still, Cardin refused to create a legally binding inheritance plan for his family: “Every time we said, 'Let's go to the notary and put it on paper,' he would cancel at the last minute. He couldn't imagine anyone replacing him.” He saw himself as indispensable, recalling another famous Frenchman Charles de Gaulle, who wisely advised: “Cemeteries are full of indispensable people.” Cardin is in one of those graves now as his family squabbles over the mega-mess he left behind, three wanting to carry on the legacy and 19 wanting to sell and cash out.
Don't: Create irreparable disputes
Can it get any worse? Consider the drama that plays out in real time at the luxury fashion house Hermes. Nicolas Puech, also childless like Cardin, is a fifth-generation billionaire owner who has ignited a bitter succession war within the Hermes dynasty. Check out this real-life story in which truth is stranger than fiction. The heir to Hermes is adopting his 51-year-old gardener and naming this “artist” from a “modest Moroccan family” as his legal heir, according to a article in New York Post. His actions have caused “a fierce battle within the family … (and) irreparable disagreements with his relatives.” Puech had previously pledged his wealth to the Isocrates Foundation, which “opposes any unilateral cancellation of the inheritance contract”. Was it a “contract” or a revocable pledge? Let's watch to see how this ugly showdown unfolds.