Posted on December - 11 - 2009
CEO Transitions Between Generations are Challenging
Ted Turner took over his father’s billboard business and turned it into a multi-billion dollar empire. Bill Marriott took over his father’s role as CEO of Marriott. Herbert Fisk Johnson III is the seventh generation to lead SC Johnson & Son. With names like these, one would be led to believe that second generation CEOs are primed for success. Unfortunately, for many family-run organizations, statistics show a different story.
According to the USA Today, successfully passing the leadership of a company from one generation to the next is much more rare than expected.
Fewer than one in three companies survive through a second generation of leadership; the odds dive to one in 10 among those that reach a third generation, says Paul Karofsky, executive director emeritus of Northeastern University Center for Family Business who consults with family businesses as they transition between generations.
Succession planning is difficult for all organizations. Creating an environment where one generation lets go of the reigns of power as the younger generation establishes more control is difficult, but when the transition is between family members, the challenges become amplified.
Click here to read the entire article.
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