I must start by admitting a connection here; one of the authors Mark Simmonds is a former star MTP tutor who did much to put our marketing training on the map and left us on good terms; he has since established an excellent reputation in his niche of creativity and idea generation. I therefore started the article with a positive feeling and this did not change as I read it.
The article makes the point that using processes like brainstorming and idea generation will not guarantee successful innovation; it all depends on the make-up of the team. And even the highest calibre team will not come up with creative ideas unless there is the right mix of people. The authors then claim to have developed a sort of Belbin equivalent, an ideal mix of people that will produce the most creative results; there are five types:
• Stimulators who like to explore new things
• Spotters who have vision and make connections
• Sculptors who convert ideas into tangible outcomes
• Selectors who can separate the good from the bad
• Supporters who can facilitate the process
My suspicions were aroused by the fact that each type began with the same letter – though I was relieved that it wasn’t titled the ‘Five S framework’ – but the framework seems to match common sense and experience, except maybe for some overlap between the first two.
The authors named the framework ‘Creative Creatures’ and decided to validate their ideas through a psychometric test. They also took steps to create a brand for the product and carry out a pilot project, the whole process apparently taking four years from conception to full implementation; this made me wonder about the importance of linking project management skills to innovation!
It was impressive that the companies chosen for the pilot were of such high calibre – Kelloggs, News International and Vodafone – and the outcomes have apparently been successful and have provided the basis for a full launch which took place in March. It will be even more impressive if the launch eventually produces some equally high calibre satisfied clients, and the dotted lines at the end of the article seem to tell us to watch this space.
This article is definitely worth reading by anyone who has responsibility for creativity and innovation. The key to success will be how far companies can in practice use the framework to form better teams, for instance, what if all available team members are of one type? Can you change team members from one S to another? If these questions are well answered during the implementation stage, this could turn out to be an innovative contribution to the challenge of creativity.
To read this article go to:
http://www.trainingjournal.com/tj/2876.html
Thursday 3 June 2010
‘How to translate a brainwave into reality’ by Hanne Kristiansen and Mark Simmonds, Training Journal, May 2010
‘Passing Out’ by Guy Sheppard, Personnel Today, 11th May 2010
I decided to review this article because we know the topic to be of interest to many of our clients in HR functions. Another reason is that MTP has, over the last few years, been increasingly interacting with outsourcing operations on behalf of our clients, with – it has to be admitted – mixed results.
The article starts by quoting evidence that, during the recession, HR has not been one of the main priorities for outsourcing; IT and procurement have led the way. It suggests that this is because there is widespread scepticism about the ability of the outsourcing suppliers to deliver their promises around HR services. The ‘first generation’ failed to deliver the promised savings through economies of scale.
The author does however quote evidence that there will be an increase in HR outsourcing as the recovery takes place and quotes a CIPD survey as saying that, compared to two years ago, there has been an increase of about a third in companies thinking of taking this step. And a US survey predicts a doubling of activity, though this refers to payroll outsourcing only.
It is significant that the higher growth is in the area of payroll and this is backed up by a comment from a senior person in Hewitt, one of the major exponents; he suggests that the broad HR ‘mega-deal’ offerings of the early days of outsourcing have not worked out; the growth areas are data storing, payroll, workforce and benefits admin where it is easier to produce economies from scale and benefit from specialised systems.
The Director of Shared Services at the BBC is quoted as backing up this trend, making the point that strategic services need to stay in-house, particularly when the organisation is undergoing rapid change. Assuming that training – or at least the ‘non-commodity’ side of it – is part of strategic services, this ties in with our own experiences. Some outsourcing providers we have come across have been unable to relate to highly tailored learning solutions and, after varied attempts to replicate them, tend to come back to specialist providers like us.
A representative of Capita, one of the biggest outsourcing providers, mentions that the growth of outsourcing in the public sector is hampered by ‘long-winded tendering processes’. The words ‘pot’ and ‘kettle’ came to mind as I read that, as we have found long-winded tendering to be a feature of working with some outsourcers who provide training services for our clients.
The article raises one further issue which had not occurred to me before; how the outsourcing of certain parts of HR makes it difficult for new employees to experience the total function as part of their development. Capita argues that this makes the outsourcing companies the only place where the full HR function can be experienced; I would see it as one of the many arguments for keeping such a key function in-house.
To read this article go to:
http://www.personneltoday.com/articles/2010/05/07/55490/hr-outsourcing-passing-out.html
The article starts by quoting evidence that, during the recession, HR has not been one of the main priorities for outsourcing; IT and procurement have led the way. It suggests that this is because there is widespread scepticism about the ability of the outsourcing suppliers to deliver their promises around HR services. The ‘first generation’ failed to deliver the promised savings through economies of scale.
The author does however quote evidence that there will be an increase in HR outsourcing as the recovery takes place and quotes a CIPD survey as saying that, compared to two years ago, there has been an increase of about a third in companies thinking of taking this step. And a US survey predicts a doubling of activity, though this refers to payroll outsourcing only.
It is significant that the higher growth is in the area of payroll and this is backed up by a comment from a senior person in Hewitt, one of the major exponents; he suggests that the broad HR ‘mega-deal’ offerings of the early days of outsourcing have not worked out; the growth areas are data storing, payroll, workforce and benefits admin where it is easier to produce economies from scale and benefit from specialised systems.
The Director of Shared Services at the BBC is quoted as backing up this trend, making the point that strategic services need to stay in-house, particularly when the organisation is undergoing rapid change. Assuming that training – or at least the ‘non-commodity’ side of it – is part of strategic services, this ties in with our own experiences. Some outsourcing providers we have come across have been unable to relate to highly tailored learning solutions and, after varied attempts to replicate them, tend to come back to specialist providers like us.
A representative of Capita, one of the biggest outsourcing providers, mentions that the growth of outsourcing in the public sector is hampered by ‘long-winded tendering processes’. The words ‘pot’ and ‘kettle’ came to mind as I read that, as we have found long-winded tendering to be a feature of working with some outsourcers who provide training services for our clients.
The article raises one further issue which had not occurred to me before; how the outsourcing of certain parts of HR makes it difficult for new employees to experience the total function as part of their development. Capita argues that this makes the outsourcing companies the only place where the full HR function can be experienced; I would see it as one of the many arguments for keeping such a key function in-house.
To read this article go to:
http://www.personneltoday.com/articles/2010/05/07/55490/hr-outsourcing-passing-out.html
‘Business Education – case studies’, Economist, 6th May 2010
As usual, the Economist provides an article that is concise and full of insight. It starts by mentioning that most of the top business schools – Harvard, Kellogg, Michigan, Northwestern – have had recent changes at the top. The author also describes an interesting dichotomy in the sector, that while the few top schools are rolling in money due to endowments and a booming market, the smaller less recognised players have been struggling during the recession.
The recession has however brought about threats and challenges, even for the elite of management education. The business school boom has been largely built upon the success and expansion of two professions – bankers and management consultants – and the recession has brought about declines in both numbers and reputation. Even more worrying for the business schools is the fact that the newly slimmed down banks and consultancies are no longer going for MBAs in the same unquestioning way, preferring mathematicians, computer scientists and even home grown traders. These firms and other major corporations are questioning the benefit of the generic theory that is contained in most MBAs, particularly if it takes their employees away from the job for two years.
Many business schools – particularly those in Europe – are already responding to this trend by offering shorter one year courses with more specialisation and practical application. They are also answering criticism of narrowness by making their courses more international. However, the impact of these changes is that the already expensive courses are becoming even more so.
As I considered these trends, I thought back to an article I wrote nearly 20 years ago just after I left Ashridge, which upset my former colleagues in a big way. It was titled ‘When Business Schools fail to meet business needs’ and, though it was a self-serving attempt to draw attention to a newly-formed MTP, it made many of the same points as this article. I made a prediction that business schools would have to change to survive; I was clearly wrong but maybe the article was just twenty years ahead of its time?
To read this article go to:
http://www.economist.com/businessfinance/displaystory.cfm?story_id=16067747
The recession has however brought about threats and challenges, even for the elite of management education. The business school boom has been largely built upon the success and expansion of two professions – bankers and management consultants – and the recession has brought about declines in both numbers and reputation. Even more worrying for the business schools is the fact that the newly slimmed down banks and consultancies are no longer going for MBAs in the same unquestioning way, preferring mathematicians, computer scientists and even home grown traders. These firms and other major corporations are questioning the benefit of the generic theory that is contained in most MBAs, particularly if it takes their employees away from the job for two years.
Many business schools – particularly those in Europe – are already responding to this trend by offering shorter one year courses with more specialisation and practical application. They are also answering criticism of narrowness by making their courses more international. However, the impact of these changes is that the already expensive courses are becoming even more so.
As I considered these trends, I thought back to an article I wrote nearly 20 years ago just after I left Ashridge, which upset my former colleagues in a big way. It was titled ‘When Business Schools fail to meet business needs’ and, though it was a self-serving attempt to draw attention to a newly-formed MTP, it made many of the same points as this article. I made a prediction that business schools would have to change to survive; I was clearly wrong but maybe the article was just twenty years ahead of its time?
To read this article go to:
http://www.economist.com/businessfinance/displaystory.cfm?story_id=16067747
‘How to stop customers from fixating on price’ by Marco Bertini and Luc Wathieu, Harvard Business Review, May 2010
I have mixed feelings when reviewing articles on pricing because, though, as a financial person, I appreciate the importance of price as a driver of margin and shareholder value, it is sometimes difficult to put aside ethical concerns, particularly when titles like the one above are used. A consumer protectionist might paraphrase the article – ‘how to rip off customers without them really knowing’!
Putting aside such reservations, the article does offer some new ideas and insights, even to someone like me who has developed sessions on pricing from both financial and marketing perspectives. It starts by making the important point – borne out by many cases of damaged product reputations – that the constant offering of deals and discounts will not only reduce margins, it will also destroy brand equity. The authors suggest that there is a further negative impact of overdoing discounting – it makes customers fixate on price and fail to see the other benefits of buying the product; they become ‘commoditised customers’.
Four approaches are offered to get companies out of this downward spiral. They all seem to have some validity in particular circumstances but, when reading the descriptions, it struck me that practical application will much depend on product, market and competitive strength; there is also a certain amount of overlap between them.
The first suggested approach is to change the pricing structure. The example quoted is motor insurance companies who charge per mile rather than per vehicle, though it is interesting that the pioneers of this idea – Norwich Union – found that it did not convince customers in the UK. It would have been more credible to have an example that had worked!
The second approach is to ‘wilfully overprice’ to create interest and differentiation. This is based on similar reasoning to the old example of customers being offered two types of identical tomatoes and choosing the more expensive ones on the assumption that the quality must be better. The argument is that high pricing will make customers think differently about the value of the offering, making it seem special. Starbucks is quoted as an example and they might also have mentioned Apple, but the authors should have warned us that what may be possible with brands of this quality is likely to destroy the market share of lesser mortals.
The third suggestion will be familiar to customers of RyanAir and similar low cost airlines; you ‘partition’ the offering into component parts, thus highlighting the benefits and making customers more prepared to pay for the value provided. It is accepted that this approach can also produce customer irritation and it is only recommended where it draws attention to a benefit that the customer had previously overlooked.
The final approach is counter intuitive – to offer a similar price for all product variants, even though costs and value perception may be different. For example buying all songs for the same price on iTunes or all Swatch watches at $40, makes the customer forget about price differentials and appreciate the value of those at the higher end of the range.
It is good to see an article about pricing that looks at the topic from a marketing rather than financial perspective and there are some innovative thoughts, but it is hard to see experienced marketers changing their pricing strategy as a result of reading it. But maybe they will question a few of their conventional assumptions.
To read this article go to:
http://hbr.org/2010/05/how-to-stop-customers-from-fixating-on-price/ar/1
Putting aside such reservations, the article does offer some new ideas and insights, even to someone like me who has developed sessions on pricing from both financial and marketing perspectives. It starts by making the important point – borne out by many cases of damaged product reputations – that the constant offering of deals and discounts will not only reduce margins, it will also destroy brand equity. The authors suggest that there is a further negative impact of overdoing discounting – it makes customers fixate on price and fail to see the other benefits of buying the product; they become ‘commoditised customers’.
Four approaches are offered to get companies out of this downward spiral. They all seem to have some validity in particular circumstances but, when reading the descriptions, it struck me that practical application will much depend on product, market and competitive strength; there is also a certain amount of overlap between them.
The first suggested approach is to change the pricing structure. The example quoted is motor insurance companies who charge per mile rather than per vehicle, though it is interesting that the pioneers of this idea – Norwich Union – found that it did not convince customers in the UK. It would have been more credible to have an example that had worked!
The second approach is to ‘wilfully overprice’ to create interest and differentiation. This is based on similar reasoning to the old example of customers being offered two types of identical tomatoes and choosing the more expensive ones on the assumption that the quality must be better. The argument is that high pricing will make customers think differently about the value of the offering, making it seem special. Starbucks is quoted as an example and they might also have mentioned Apple, but the authors should have warned us that what may be possible with brands of this quality is likely to destroy the market share of lesser mortals.
The third suggestion will be familiar to customers of RyanAir and similar low cost airlines; you ‘partition’ the offering into component parts, thus highlighting the benefits and making customers more prepared to pay for the value provided. It is accepted that this approach can also produce customer irritation and it is only recommended where it draws attention to a benefit that the customer had previously overlooked.
The final approach is counter intuitive – to offer a similar price for all product variants, even though costs and value perception may be different. For example buying all songs for the same price on iTunes or all Swatch watches at $40, makes the customer forget about price differentials and appreciate the value of those at the higher end of the range.
It is good to see an article about pricing that looks at the topic from a marketing rather than financial perspective and there are some innovative thoughts, but it is hard to see experienced marketers changing their pricing strategy as a result of reading it. But maybe they will question a few of their conventional assumptions.
To read this article go to:
http://hbr.org/2010/05/how-to-stop-customers-from-fixating-on-price/ar/1
‘The guru at the bottom of the pyramid’, Schumpeter column, Economist, 22nd April 2010
The Schumpeter column is a relatively recent feature article in the Economist and was proudly praised by Marjorie Scardino when she spoke at our 21st anniversary event in January. We have followed it carefully since and have been impressed by the way it comments on interesting and topical business issues.
I probably should have heard before but I have to admit that the Schumpeter article was the first time I knew of the death of C.K. Prahalad, one of the most well known and highly lauded gurus of the management world; in the view of Schumpeter – ‘the most creative management thinker of his generation’. The article examines an issue that has also made me curious – why was his reputation so high when, compared to others like Porter and Drucker, he has produced relatively few books and articles?
Perhaps this is because it is quality rather than quantity that matters, maybe it is also evidence that learned articles and thick books are not all that it takes to become a recognised guru. The article confirms how Prahalad sat on the board of some of the world’s top companies – including Pearson, owner of the Economist! – and acted as consultant to many others. And it was his contributions on strategy and innovation in this context that elevated him to superstar status.
The thinking that most defines Prahalad was first communicated in 1989 when two articles in HBR made a big impact. He introduced into business language the concept that we at MTP use more than any other when discussing strategy – Core Competences. It could be argued by Tom Peters that this was not original thought; only a few years earlier he had argued that good companies ‘stick to the knitting’ as part of his best selling book, ‘In Search of Excellence’. But the core competences concept was to stand the test of time.
His reputation was further enhanced with the publication of his classic book – Competing for the Future – jointly authored with his now famous former pupil, Gary Hamel. This book took the concept of core competences further and suggested that companies could capitalise on their competences by redefining markets in their favour. Prahalad was fortunate thereafter to detach his reputation from that of Hamel and was not tarnished by Hamel’s oft quoted love affair with the Enron business model prior to its collapse.
This suggests that perhaps the main reason for Prahalad’s high reputation was his ability to move on with the times and develop new interests and themes. One such change was captured in his second major book – ‘The Fortune at the Bottom of the Pyramid’ which censured major corporations for not recognising the profit potential of meeting the needs of developing markets; he simultaneously criticised those who saw the profit motive as incompatible with doing business in the third world.
The article defines this obsession with moving on as being ‘intellectual restlessness’ and provides evidence by confirming that Prahalad never wrote more than one article on the same subject. This was linked to his tendency to work with partners whom he would leave behind as he moved on to his next interest. This led to criticisms by some of his peers that he left unfinished business and failed to answer real-life developments that challenged his theories. Schumpeter justifies this weakness by saying that he was a ‘big ideas man’ but others might see it as a sign of superficiality. But the fact that companies like AT&T, Pearson and Unilever so valued his advice must be confirmation that his thinking was a cut above the rest.
To read this article go to:
http://www.economist.com/research/articlesBySubject/display.cfm?id=14391731
I probably should have heard before but I have to admit that the Schumpeter article was the first time I knew of the death of C.K. Prahalad, one of the most well known and highly lauded gurus of the management world; in the view of Schumpeter – ‘the most creative management thinker of his generation’. The article examines an issue that has also made me curious – why was his reputation so high when, compared to others like Porter and Drucker, he has produced relatively few books and articles?
Perhaps this is because it is quality rather than quantity that matters, maybe it is also evidence that learned articles and thick books are not all that it takes to become a recognised guru. The article confirms how Prahalad sat on the board of some of the world’s top companies – including Pearson, owner of the Economist! – and acted as consultant to many others. And it was his contributions on strategy and innovation in this context that elevated him to superstar status.
The thinking that most defines Prahalad was first communicated in 1989 when two articles in HBR made a big impact. He introduced into business language the concept that we at MTP use more than any other when discussing strategy – Core Competences. It could be argued by Tom Peters that this was not original thought; only a few years earlier he had argued that good companies ‘stick to the knitting’ as part of his best selling book, ‘In Search of Excellence’. But the core competences concept was to stand the test of time.
His reputation was further enhanced with the publication of his classic book – Competing for the Future – jointly authored with his now famous former pupil, Gary Hamel. This book took the concept of core competences further and suggested that companies could capitalise on their competences by redefining markets in their favour. Prahalad was fortunate thereafter to detach his reputation from that of Hamel and was not tarnished by Hamel’s oft quoted love affair with the Enron business model prior to its collapse.
This suggests that perhaps the main reason for Prahalad’s high reputation was his ability to move on with the times and develop new interests and themes. One such change was captured in his second major book – ‘The Fortune at the Bottom of the Pyramid’ which censured major corporations for not recognising the profit potential of meeting the needs of developing markets; he simultaneously criticised those who saw the profit motive as incompatible with doing business in the third world.
The article defines this obsession with moving on as being ‘intellectual restlessness’ and provides evidence by confirming that Prahalad never wrote more than one article on the same subject. This was linked to his tendency to work with partners whom he would leave behind as he moved on to his next interest. This led to criticisms by some of his peers that he left unfinished business and failed to answer real-life developments that challenged his theories. Schumpeter justifies this weakness by saying that he was a ‘big ideas man’ but others might see it as a sign of superficiality. But the fact that companies like AT&T, Pearson and Unilever so valued his advice must be confirmation that his thinking was a cut above the rest.
To read this article go to:
http://www.economist.com/research/articlesBySubject/display.cfm?id=14391731
‘The Storm’ by Vince Cable, published by Atlantic Books
I thought that Vince Cable’s pre-election reputation as the most convincing politician in all three parties, and his surprising entry into the cabinet, would make this a good book to review. I also enjoy reading about politics and thought that, like most books by politicians, there would be some good gossip and ‘knockabout stuff’.
I was surprised and disappointed on a number of counts. Though the book contains a good analytical summary of the causes of the financial crisis – made more credible by the fact that he was one of the few that saw it coming – it is boring and repetitive. It is also very short of anecdotes and real-life examples, revealing Cable’s background as an economist more than his business experience with Shell.
His main point is that the boom of the UK Economy in the first 10 years of Labour government was built on false confidence due to three factors:
• The success of the financial services sector
• An openness to overseas investors
• The perceived well being of consumers due to the property price boom
These three factors led Gordon Brown to proclaim that he had abolished boom and bust and consumers to build up unprecedented levels of debt based on ‘an illusion of wealth’. A similar illusion in government encouraged them to throw cash at the public sector like never before. This made the economy unable to cope with the global recession when it came and has led to our current predicament.
He also points quite critically to the fact that we, more than any other economy (other than Iceland) are suffering from the ‘Icelandic disease’ where the banking sector has outgrown its host economy, thus placing the taxpayers with excessive and unreasonable risk.
Cable is less convincing when it comes to solutions, which does not perhaps bode well for the new coalition. He wants to change the tax system to reduce avoidance and unfairness and ‘remove equalities of wealth, income and opportunity’. There is far too little mention of the need to encourage entrepreneurship and investment, which is not encouraging from the new Secretary of State for Business. One must hope that, like many others who face the reality of government responsibility, his views become more balanced and practical in office.
I was surprised and disappointed on a number of counts. Though the book contains a good analytical summary of the causes of the financial crisis – made more credible by the fact that he was one of the few that saw it coming – it is boring and repetitive. It is also very short of anecdotes and real-life examples, revealing Cable’s background as an economist more than his business experience with Shell.
His main point is that the boom of the UK Economy in the first 10 years of Labour government was built on false confidence due to three factors:
• The success of the financial services sector
• An openness to overseas investors
• The perceived well being of consumers due to the property price boom
These three factors led Gordon Brown to proclaim that he had abolished boom and bust and consumers to build up unprecedented levels of debt based on ‘an illusion of wealth’. A similar illusion in government encouraged them to throw cash at the public sector like never before. This made the economy unable to cope with the global recession when it came and has led to our current predicament.
He also points quite critically to the fact that we, more than any other economy (other than Iceland) are suffering from the ‘Icelandic disease’ where the banking sector has outgrown its host economy, thus placing the taxpayers with excessive and unreasonable risk.
Cable is less convincing when it comes to solutions, which does not perhaps bode well for the new coalition. He wants to change the tax system to reduce avoidance and unfairness and ‘remove equalities of wealth, income and opportunity’. There is far too little mention of the need to encourage entrepreneurship and investment, which is not encouraging from the new Secretary of State for Business. One must hope that, like many others who face the reality of government responsibility, his views become more balanced and practical in office.
Family Wars by Grant Gordon and Nigel Nicholson, published by Kogan Page
This book is a good read which appeals to my own (rather sad) enjoyment of reading about business troubles and also provides some interesting and surprising insights. I have always been firmly of the school that says ‘do not mix business and personal matters’ so have tended to see the family business as an anachronism that eventually produces pain for all concerned.
Yet early in the book such prejudices are challenged when it is confirmed that, despite all the dilemmas and conflicts, family businesses have, over time, outperformed others; this is confirmed by research in both Europe and the USA. These companies also have greater longevity than others, perhaps because they are less susceptible to the economic logic of acquisition.
The book then moves on to describe how, despite this overall comparison, family businesses have produced some amazingly bitter conflicts. I am sure that many of us could add to these stories from personal experience and anecdote and many other books have added to the list. (Blog readers may remember my review of the book about the fights between the brothers who ran Adidas and Puma as an extreme example).
The two best stories for me were those of two well known dysfunctional families– Ford and Guinness. The inability of Henry Ford to delegate and hand over drove his son Edsel to drink and an eventual early death; Ford Senior then entered into a bitter conflict with his grandson Henry II and tried to prefer an outsider as his successor. It only ended when the younger Henry humiliated his grandfather in front of the Board and secured his succession. The conclusion is that Ford would have become an even greater corporation if Henry Senior had been able to let go and allow a more objective succession process.
The Guinness story was a similar example of senior members of the family having little faith in the younger generation and being unable to let go. Rupert Guinness did not relinquish his Chairmanship until he was 88 and, by then, only younger grandchildren were available as family members. Non family members began to desert a sinking ship, believing that the company was failing and that they would never get a chance to save it. It is perhaps ironic that the man who eventually filled this vacuum and set the company on the road to recovery was Ernest Saunders, who created new scandals and conflicts during the 1980s.
The book is not all about stories; there are some interesting conclusions and lessons for anyone in a family business. The most interesting were:
• Understand that any family is a ‘gene lottery’ with no guarantees of continuing competence
• Undivided families are the exception rather than the rule
• The most dangerous relationships are father/son, husband/wife and brother/brother.
Readers will end up wondering how it can be true that family businesses outperform others when there is all this conflict going on. How effective they would have been if they had been able to work with one another!
Yet early in the book such prejudices are challenged when it is confirmed that, despite all the dilemmas and conflicts, family businesses have, over time, outperformed others; this is confirmed by research in both Europe and the USA. These companies also have greater longevity than others, perhaps because they are less susceptible to the economic logic of acquisition.
The book then moves on to describe how, despite this overall comparison, family businesses have produced some amazingly bitter conflicts. I am sure that many of us could add to these stories from personal experience and anecdote and many other books have added to the list. (Blog readers may remember my review of the book about the fights between the brothers who ran Adidas and Puma as an extreme example).
The two best stories for me were those of two well known dysfunctional families– Ford and Guinness. The inability of Henry Ford to delegate and hand over drove his son Edsel to drink and an eventual early death; Ford Senior then entered into a bitter conflict with his grandson Henry II and tried to prefer an outsider as his successor. It only ended when the younger Henry humiliated his grandfather in front of the Board and secured his succession. The conclusion is that Ford would have become an even greater corporation if Henry Senior had been able to let go and allow a more objective succession process.
The Guinness story was a similar example of senior members of the family having little faith in the younger generation and being unable to let go. Rupert Guinness did not relinquish his Chairmanship until he was 88 and, by then, only younger grandchildren were available as family members. Non family members began to desert a sinking ship, believing that the company was failing and that they would never get a chance to save it. It is perhaps ironic that the man who eventually filled this vacuum and set the company on the road to recovery was Ernest Saunders, who created new scandals and conflicts during the 1980s.
The book is not all about stories; there are some interesting conclusions and lessons for anyone in a family business. The most interesting were:
• Understand that any family is a ‘gene lottery’ with no guarantees of continuing competence
• Undivided families are the exception rather than the rule
• The most dangerous relationships are father/son, husband/wife and brother/brother.
Readers will end up wondering how it can be true that family businesses outperform others when there is all this conflict going on. How effective they would have been if they had been able to work with one another!