Subscribe
Share
Share
Embed
You know your business needs to change, but you’re caught in the emotional and relational dynamics that are holding you back. Welcome to Noble Metal, the podcast that helps you forge a new kind of leadership. Host Phillip Weiss, a seasoned executive coach and organizational consultant, reveals how to become a more resilient, deliberate, and less-anxious leader.
Through powerful insights based on Bowen Theory and systems thinking, you’ll learn to navigate complex workplace relationships, manage challenging strategic issues, and lead your team to sustainable change. Get the clarity and tools you need to forge a new path for your business.
Ep23
===
Murdoch Hearing Moment
---
[00:00:00]
Phillip Weiss: July 19th, 2011. Uh, a committee room in the British Parliament Rupert Murdoch is sitting at a table answering questions about the phone hacking scandal in his British newspapers. Huge scandal at the time. And sitting right next to him is his son, James. At that point, James was the one that [00:01:00] everybody assumed would take over the company someday.
He-- total heir apparent. Early in the hearing, Rupert says something to the effect of, "This is the most humble day of my life." A little later, a protester gets up and tries to hit him with a shaving fo-foam pie. So it's quite a day pretty much all around. But what I find interesting actually isn't really the scandal at this point.
I mean, it is in its own way for sure. It's the picture though of the two of them, father and son, sitting there side by side. Because within about a year after this, James had stepped down from the British newspaper business and from the chairmanship of Sky. And the question of who would eventually run the Murdoch companies was again wide open, which if you follow this family at all, was not the first time and would not be the last.
Succession Stakes
---
Phillip Weiss: For something like twenty-five years, Rupert Murdoch was trying to answer a key question: [00:02:00] Which one of my kids should lead this thing when I'm gone? And he went back and forth on it, more or less public for most of their lives. So you can only guess the impact, which we're gonna explore. So what I wanna talk about today is that question, that question of succession. It's huge in family businesses. Not the lawsuits, not, not the fallout, but this question itself of who is going to succeed in leading this business? Because every family business owner eventually has to answer that question.
And honestly, it might be the hardest decision, hiring decision that there is, is specifically in the fa- family business. So hello, uh, I am Philip Weiss, and welcome to Noble Metal, where we explore leadership in both business and life through the lens of Bowen Family Systems theory. This is the third [00:03:00] episode in our series specifically targeting family enterprise.
In the first episode, we looked at the Pritzker family here, based here in Chicago, and what happens when relationships break down inside a, a large major family fortune like theirs. Last time, we talked about how to read a family system when it's under pressure, and we had some specific, five, in fact, specific criteria we were looking at.
Today is about succession. And I wanna come at it though from the front end before, before anything goes wrong. So when you're the one running the business, you're getting older, and you're looking around the table trying to figure out who comes next. So by the way, as a quick aside here, the contents of this episode, I think, will not only be useful to family business leaders, but to really all family leaders, uh, of any sort.
Whether you own a business or not, the dynamics in the family, whether, uh, there's an enterprise in, in, [00:04:00] in the picture, those, those dynamics are the same.
Family Business Hiring
---
Phillip Weiss: Okay, so back to this idea of succession. If you were hiring a CEO for a public company, you'd hire a search firm.
You'd look at, you know, probably literally hundreds of candidates, interview a dozen or so, check references, et cetera, and pick the best one. And the ones you didn't pick would go home, and you'd probably never see 'em again, most likely. But in a family business, the candidate pool is the people that you've raised.
Think about that. You already know who they were or who they are at age 11, which is either a big advantage or a big problem, or some combination of the two. And whoever you don't pick to lead, you're gonna see them at Thanksgiving every year for the rest of your life, probably, and beyond, uh, in terms of events.
So this is a very different kind of hiring [00:05:00] decision. In my experience to date with family organizations, the two main things that keep these family leaders up at night as they think about succession in particular is, one, who-- if they're good, that is, who is the most qualified for the job? And two, what are the responses going to be from the rest who didn't get picked?
And let me add another one to that first one. Who's the most qualified for the job? And ideally, and let's hope it's the one everybody thinks is the natural next s-leader. And so if we're-- if it's not, and we're gonna go by competence instead, we're gonna have to explain that. So lots to think about.
Murdoch Succession Timeline
---
Phillip Weiss: Let's go back and let me walk you through this Murdoch version quickly because it shows pretty much every kind of element of this.
In the nineteen-nineties, Lachlan, the oldest son, was the [00:06:00] one, he was being groomed. He was running things in Australia and later moved to New York. Then in two thousand and five, he resigned, surprised a lot of people, and moved back to Australia. Reports at the time pointed to friction with some of his dad's senior executives and really a sense that his father wasn't fully backing him.
So then the spotlight moved to James. James, probably the most restless of these kids. He dropped out of Harvard, started a hip hop record label, interestingly, and came into the business, ran Sky in, in the UK, and by two thousand and seven he really was kind of heir apparent. And then this hacking scandal hit, something to look up, and James' standing took a, a, a significant blow.
So then the spotlight moved back to Lachlan, who returned to the company in twenty-fourteen And so for a few years, Rupert had both sons at the top, Lachlan as co-chair, James as CEO of 21st [00:07:00] Century Fox. Two brothers essentially sharing the stage with their dad, still very much in charge But when part of the company was sold to Disney in twenty nineteen, James was out and La- Lachlan ran what was left essentially.
A year later, James resigned from the board of News Corp and said publicly that he disagreed with some of the editorial direction the company was going. Meanwhile, they have a sister, Elisabeth, uh, who had built a very successful production company of her own in London. A lot of people thought she actually might be the most capable of the bunch.
But interestingly, she was never really treated as a contender in the way that her brothers were. And then, yes, you, you might know the rest of the story from the headlines that Rupert ultimately tried to change the family trust so that Lachlan would have control after he died.
The other three fought it. Murdoch himself, Rupert lost in court, and the family eventually settled with Lachlan in [00:08:00] charge and the other three being bought out. But I d- I don't wanna end-- I don't wanna dwell on that ending. I want you to think about those twenty-five years before it that I was really more or less outlining.
That's the part that almost every family business goes through just with smaller numbers and much less press. For example, a founder who isn't sure what to do, kids, kids who can tell he's not sure, and a competition that nobody ever officially announced but everybody knows is happening.
Why Succession Is Hard
---
Phillip Weiss: so it bodes the question, why is this so hard?
From a Bowen perspective, I'd, I'd start with the founder's worry. Picking a successor, as I kind of noted earlier, isn't just a business decision for this person. It's tied up with a whole sense of who he is, his legacy, as we like to say, and what his life has added up to. if the business does well after him, his whole life work [00:09:00] kind of essentially holds, and the family reputation remains beautifully intact.
Phillip Weiss: If it fails, it feels like it was all in a sense for nothing. So the anxiety around that choice runs really very high. There's a lot resting on it. And we know that when, as we like to talk about, when anxiety runs high, people's thinking gets narrow, narrower.
and one of the ways that shows up is what Bowen called the family projection process, something we really haven't spoken much about, but huge in Bowen theory. It could be a parent's worry or hope that gets focused on a particular child. So, uh, this idea of focusing on a kid who's doing poorly or a focus because the kid is awesome and like a superstar.
Phillip Weiss: But there's a focus on one particular child. That child becomes the one who's going to carry it forward or, or the [00:10:00] parent is always concerned about, in a sense. Again, whether it's them succeeding or failing. Sometimes it's even a different child at different, different times, and we see this in the Murdoch story where the spotlight moves back and forth from one kid to another, which you have to know is very anxi-anxiety-inducing for the family, the kids especially.
So whoever has the spotlight carries the weight of their father's hopes, and the ones who don't have it feel sort of that absence And in Bowen terms, by the way, sometimes that lack of focus is kind of nice because the pressure's not on you. More to say about that in another episode. But the trouble is the child who gets that focus may not necessarily be the one best suited to lead.
They may not be the most qualified. Sometimes it's the oldest. Sometimes it's the one who reminds the founder of him or herself. Sometimes it's the one who seems to [00:11:00] need maybe the most help. The choice can feel, uh, like a business judgment while really being, in a sense, driven by the emotional process in the family.
Sibling Rivalry And Triangles
---
Phillip Weiss: And it's really hard, I think, to tell the difference from the inside Then there's the, the actual competition among the kids. When the founder hasn't decided or keeps changing his or her mind, the kids are left, in a sense, to compete for something that really nobody has defined. What does it take to win?
Nobody says. So they compete for the thing they can see, which is their dad's approval, and that's a terrible way to pick a leader because the skills that win a parent's approval aren't necessarily the same skills needed to run a successful organization. Another thing is that Bowen paid attention to sibling position, borrowing from the work of Walter Toman, T-O-M-A-N.
The idea is that in-- the oldest, the youngest, and the ones in the middle tend to [00:12:00] de-develop different ways of operating based on their, their functional position in the family. Oldest kids often step up and are taking responsibility, sometimes more than they should. And this, by the way, goes into adulthood.
Younger ones may push against the rules or kinda carve their own lane. So I, I wouldn't lean on this too hard, but it's, a fascinating tendency and, um, kinda perspective of both Tomans and Bowens. it is worth knowing because a family can end up assuming that the oldest son is the natural successor when the person best suited for it really is somebody else entirely.
And I'm thinking of a family that I'm aware of where this was the case. The, the oldest son, a natural successor for a third-generation family business, just really didn't have h-honestly the, the, the s- the skills necessary, and on top of it, had a substance abuse [00:13:00] issue. So when the son died an early death, the family wisely got together and, and said, "Really, who is the most qualified here?" And it turned out to be somebody younger but very competent and has proven to be a, an absolutely great choice. And this is also where we have triangles coming in when we think about the sibling dynamics here with the parent. Every time a founder confides in one child about another or asks one sibling what they think of their brother's performance, he's setting up a triangle, and triangles are normal and natural.
It's really all about how we manage them. So the siblings in this case might stop dealing with each other directly and start dealing with each other through their dad, and that pattern doesn't go away when the founder steps down. If anything, it gets worse because now the person in the middle is gone
And then there's this part that I mentioned a little bit earlier [00:14:00] that makes family succession different from any other kind. And again, it's that you cannot go typically to the outside, or at least it doesn't feel like you can for that next successor. A public company can say, "Hey, none of our internal candidates are ready.
Let's hire from the outside." Very common. a family business owner, though, who says that is saying something to his own kids that's very hard to say. So instead of a lot, a lot of founders just simply don't decide. They put it off. They say maybe in five years, and the longer they put it off, honestly, the-- you can imagine the more anxiety builds up
Founder Playbook
---
Phillip Weiss: So what do you do if you're a family leader right now and your family is maybe stuck right here or somewhere kind of like where I'm describing? The founder's not sure. The kids are circling. Nobody's talking about it directly Let me offer a few thoughts. And again, I think this applies not just to a succession issue, but just [00:15:00] leading in a family in general.
Define Criteria Clearly
---
Phillip Weiss: Define yourself in relation to the issue or question. Again, back to that mouthful term we use in Bowen theory, differentiation of self. What do we mean here? In this case, I think the first is for the founder to work on his or her own position What do they think? Most founders start with the question, which of my kids is ready?
I think maybe I'd start somewhere else. What do you actually want for your business after you? What would you need to see in a leader in plain terms? What qualifications top the chart for you? What top three, say? And this is the one people skip often. What do you want for yourself after you step back?
Because a founder who has no picture of his own, own life after the handoff is probably gonna have a really hard [00:16:00] time letting go of the life that he has now And then say those things out loud the same way to everybody. In other words, state what is it you believe or don't believe about the succession.
I know it's easier for me to sit here in front of a mic and say this, but at some point, this is going to be the thing that helps the family get grounded and move forward. Say it out loud. Not one version for one kid over dinner and another version for a different kid at the golf course. When the criteria are clear and everybody hears the same thing, a lot of anxiety goes out of the competition.
People may not like what you're saying, and the same is true at work in a non-family setting even. we have to often say, make the difficult decisions and state them clearly, [00:17:00] but at least people know what they're dealing with. Data, whether you agree with it or not, is very useful in helping to reduce anxiety.
And, and in my opinion, as I just kind of said, this behavior, this sort of putting it out there, matter-of-factly, calmly, this behavior is, in a sense, a high watermark of sound leadership. This is what good leaders do when they're making tough decisions and needing to move forward. So this idea of defining yourself as the founder in relation to the issue.
One To One Leadership
---
Phillip Weiss: Second thing I wanna mention is the importance of one-to-one relationships
Have a real one-to-one relationship with each of your kids and stay out of the middle between them by and large. Murray Bowen talked a lot about person-to-person [00:18:00] relationships. If you think about it, and I've thought about this for myself, too often I, I will go through other people to have a relationship with someone on the other side of them.
The point here is: what is my relationship like with each of these key stakeholders? So talk with each of your kids about what they actually want. You may find out the one you were counting on doesn't really maybe want the job or that the one you've overlooked maybe does and actually has the skills for it When one of them comes to you to complain about a sibling, you don't have to take the job of fixing it. Send them back to each other. That, that's often hard for a parent, but if the siblings can't deal with each other directly while you're still around, they're gonna have a much harder time when you're not.
So give them some of that training early.
Separate Family Ownership Management
---
Phillip Weiss: So again, that importance of, of the [00:19:00] one-to-one relationship that the founder or the family leader has with each of the key players in the family The third and final suggestion I have is to separate the questions in a sense. In family business work, people often talk about three overlapping circles.
You have the family itself, but then there's ownership of the, of the enterprise. And then there's the management of the enterprise. These three are three different things. Being a member of the family doesn't automatically mean or necessarily mean you should own part of the business, and owning part of it doesn't necessarily mean you should run it So once you see these three buckets, this question of we can't use a search firm, that, that question or that problem looks maybe a little different.
Maybe the family supplies the owners and the board, and the CEO for the next [00:20:00] stretch, at least, comes from the outside. Or maybe it's a trusted non-family executive who bridges the gap until someone in the next generation is ready. Maybe one of your kids runs the business and another chairs the board, and a third maybe has nothing to do with operations but is a very engaged owner.
There are more ways, you know, to, to slice and dice this than for just one heir to wear a single crown. And again, it goes back to cultivating honest discussions about this I'm thinking in particular of a, of a family that I'm aware of, also a third family generation business, where in this case, uh, a highly trusted non-family leader is in charge.
Phillip Weiss: And this was a decision by the family members and owners to put this trusted leader in place, and to date, has worked very well. [00:21:00] So let me just say that these ideas, these challenges, these discussions, none of them is easy.
But in my experience, families who make those distinctions early in these three buckets have a lot more room to move than families who assume that one of the kids has to get the whole thing
Phillip Weiss: If you're not the founder, if you're one of the kids, a lot of this still applies to you. You can't control whether your father picks you. What you can do is get clear on what you actually want. What do you want as opposed to what you'd want if it means, you know, trying to get somebody's approval? And these may not always be the same.
What's gonna get some, a, a, dad's approval versus what you might, what you might want could be very different
Back To The Hearing
---
Phillip Weiss: So let's get back to that committee in the room in 2011 with the father, Rupert Murdoch, and his son sitting side by side, [00:22:00] and the whole world's watching I think honestly, it's a pretty good picture of what succession can feel like in a family business, even without any reporters around. Everybody's watching.
People are wondering who's next, and the person who's supposed to decide is often the most anxious in the room. But here's the good news, is that the way through doesn't depend on picking perfectly.
Book Reccomendation and Next Time
---
Phillip Weiss: But it depends on the founder getting clear about himself, staying in real contact with each of these kids, and wi-- being willing to think more broadly about what the family needs Do those things, I think, and whoever you pick, I believe will have a much better chance Before we do a wrap, I wanna share something that I haven't shared for a while, and that is a book endorsement.
I might have mentioned this book, but if you're really have been listening to the podcast and are wanting to dig a little bit [00:23:00] deeper into Bowen theory, I highly recommend Michael Kerr's fairly recent book, twenty twenty-two, "Bowen Theory's Secrets: Revealing the Hidden Lives of Families." Remember, uh, Michael Kerr or you-- or I will share, m- reiterate that Mike Kerr was really Bowen's, in a sense, heir apparent, at the Bowen Center in DC and, uh, was in that role for quite a long w- long time.
And, uh, really has done a, I believe, a great job of taking, a-an important theory and, and really kind of laying it out nicely. It still has an academic ring to it, but I think at the same time, it's also very accessible. So "Bowen Theory's Secrets" by Michael Kerr. Also, in a couple episodes, I'm planning to have a guest, Kathy Wiseman, who has spent decades working with families and organizations from a Bowen theory perspective and very successfully.
Kathy's a friend. I've learned a lot from her. She's really sharp, [00:24:00] and I think we'll enjoy listening to her in a-- as I said, in a couple ep-episodes. Basically, we're gonna talk about what it actually looks like, uh, from her consultant perspective to help a family through many of these things. Until then, I'm Philip Weiss. Thanks so much for listening to Noble Metal. If you've really benefited from this, please refer us on or go in and actually make some comments. We would, again, love to hear from you. Thanks, and we'll be together next time.