Changing Dad's Strategy
Successors often face the challenge of changing a heroic predecessor's successful business philosophy. A recent Wall Street Journal article (â€œBanc One Faces Pressures to Perform: Generation Gap, March 11, 1998) offers a great illustration of this difficult situation.
John McCoy is the third generation of his family to lead Banc One, now the seventh largest U.S. bank. McCoy has been heralded for aggressively following the strategy of his father who invented a whole philosophy of banking known as the "uncommon partnership." That philosophy urged acquisitions of regional banks which were promised near total autonomy. The father was known as "John God" and the son as "John Boy" after years of a soaring stock price and more than 100 acquisitions. But the banking market changed, the stock price fell, and "John Boy" realized that the "uncommon partnership" strategy was no longer appropriate. He had to centralize, cut overhead and jobs, and tell the local bank heads that the old philosophy and promises were over. He told his senior staff, "I'm telling you we've got to do it, and I don't want to hear anybody say we're not going to do it."
One of Mr. McCoy's hardest tasks, says the WSJ, was talking to his father. I called him up and said, "I've got to come talk to you." ... Of course, I was nervous. He was sort of the godfather of the uncommon partnership that had worked wonderfully. His father supported John's ideas: Johnny had thought the thing out very carefully. I understand it, and the timing is right. I couldn't have done it.
While the father's support and honesty is heartening, we are most impressed by the son's courage, self-confidence and adaptability - all essential ingredients of success in times of change. Where does a successor gain those strengths? Upbringing, excellent education, outside experience and open-mindedness based on grooming and experience. Successors trained to carry on the strategies of their parents cannot succeed in an environment that demands change.
The work's not done. The third-generation McCoy concludes, "I didn't see how hard it would be to get back our stock (price)....The worst thing is, it takes time....It's been three years of very intense change. On the other hand,...now I'm into new ground. I ain't been there before. And that's what's fun."
Strategic adaptability coupled with the courage and confidence required to implement change are crucial successor characteristics whether your family business is a small retailer, a service business, a distributor or manufacturer, or one of the nation's largest banks.
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