AA3: Newstory or workplace experience
Succession & Marketing in a Family Firm
Chapter 1
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Lecture 1 Outline
What is the goal of succession, and when is transfer of power problematic?
How do incumbent attributes such as CEO exit style affect succession?
In terms of successor attributes, which next generation traits are ideal?
What role do key nonfamily members and board of directors play in succession?
The Transfer of Power
The ultimate goal is a healthy family in a healthy family business that will continue from generation to generation.
Transfer of power can be problematic when:
CEOs don’t want to leave
CEOs fail to prepare next-generation members for leadership
Succession is triggered by illness or death of CEO
Transfer of power must be uniquely designed for each family and business
Incumbent Attributes
CEO Exit Styles
Monarch
Must be forced out; feels irreplaceable
General
Leaves reluctantly; hopes next generation fails
Ambassador
Allows others to learn; then steps down
Governor
Leads for limited time; ensures their successor will be trained and ready
Inventor
Returns to development activities; takes key position in another enterprise
Transition Czar
Provides active leadership during the succession process
Successor Attributes
Knows the business well
Knows themselves and their strengths and weaknesses
Wants to lead and serve
Are guided responsibly by the previous generation, advisors, and BOD
Have good relationship with incumbent and shared vision and harmony with family members
Can count on competent nonfamily managers in the top management team to complement their own skills
Have controlling ownership or can lead, through allies, as if they did
Have earned the respect of nonfamily employees, suppliers, customers
Have skills and abilities that fit the strategic needs of the business
Respects the past but focus their energies on the future of the firm
Perspective of Non-Family Managers
Overall, non-family managers regard their firms positively
Can be obstacle to succession
Perceptions of business differ from those of family members in area of succession:
Concerned that nepotism will influence career opportunities
More certain that the next CEO will be a family member
Family Businesses should:
Discuss career advancement options for nonfamily managers and how the succession affects that
Involve nonfamily managers in succession planning
Consider non-family CEOs if:
Incumbent CEO not capable of leading succession process or cannot choose successor
Potential successors not qualified or not ready
Business needs change
Chapter14
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Firm Process and Strategies
Long-term and Systematic Process
Clear roles for incumbent and successor
Successor training and feedback
Ownership Control
Age and gender still influence who obtains ownership control in succession process
Board of Directors
Outside BOD useful in making sure company engages in and carries out business succession plan
Lecture 2 Outline
What is the essence of marketing?
What is the value of brand management and social media?
Why is family reputation and branding important for family firms?
What is family capital, and what is the value of a market orientation to family firms?
How do family firms focus on stewardship and longevity?
Essence of Marketing
Marketing Mix (4Ps)
- product, price, place, and promotion
- have been criticized for promoting a production orientation rather than a customer orientation
The relationship marketing approach
- a long-term focus
- value exchange
Value of Social Media
Provides companies with a way to engage with customers
Provides opportunities for consumers to connect with each other and develop communities
Importance of Family Reputation and Branding for Family Firms
Family business advantages include having a family atmosphere, being long-term oriented, and having a stewardship focus.
Two branding strategies for family firms
- emphasizing family traditions and the importance of family in terms of business continuity
- emphasizing the importance of family in ensuring quality
Family Capital and Value of a Market Orientation
Family capital is known as social capital in family firms. Three approaches include:
- structural
- relational
- cognitive
Market orientation represents a company-wide approach to
- understanding customer needs
- delivering customer value
- monitoring the competition
Focus of Stewardship and Longevity
Stewardship and longevity in a small family businesses was cultivated through employee retention, customer relationships, and reputation.
The long-term focus of family firms provides them with an image of reliability and trustworthiness among stakeholders.