Expectations of Management Choosing the right CEO from the cousin consortium
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Transcript of Expectations of Management Choosing the right CEO from the cousin consortium
Expectations of Management Choosing the right CEO from the cousin consortium
Agenda/Introduction
Background-Tobin Brothers & key Players Outline a story that’s worked Management, not equity succession Detail the distinct phases of our Plan Reasons for its success Expectations Analysis
Tobin Brothers Funerals
Largest family owned Funeral Co. in Australia Founded in 1934 by my grandfather and his
three brothers; Currently 13 active family members Turnover of $22+ million 130 Staff, across 19 locations 4500 funerals annually (1 in 5 Melbournians) FBA’s 3rd Generation Family Business of the
Year Award (1999 & 2004)
Martin Tobin
3rd generation MD (since late 1998) Arts/Law at Monash Solicitor for four years MBA at Melbourne Business School FBA’s Victorian Chapter Committee
The Tobin Family
Road blocks to Succession Planning
Reluctance of incumbents to let go Difficulty selecting one family member over
another Incumbent has nothing to do in retirement Concern that his/her successor will fail Fear that his/her successor will do better
1st to 2nd Generation (late 1970s)
Kevin Tobin, conservative, prudent founder Des Tobin, restless, innovative nephew Second eldest of 4 second generation
cousins Des evolved as natural successor Broad support of his three cousins Long wait; Kevin retired in 1981 at age 71
2nd to 3rd Generation (early 1990s)
TB far bigger and more complex Funeral industry more competitive Several non-family senior managers had
emerged Eight 2nd and 3rd generation Tobins in the
business No natural family successor within business
Phase 1-Recognising the Need1992/93
Des, at 55, at peak of working life Conscious of his mortality Saw company needed new blood First hand experience as a successor Had a life outside of work Importance of enlightened incumbent
Phase 2-Building the Framework1993 Family & Board agreed to role criteria Agreed to go outside company if necessary “Cousins” assessed against agreed criteria
(plenty of self assessment) Potential external “cousins” assessed (from
which I emerged) Management team and family consulted Decision communicated to staff from outset
Agreed Role Criteria
Business related tertiary qualifications Strong communication skills Time management skills Natural Leadership qualities Ability to handle stress Ideally, some experience outside the
business Preparedness to embrace IT
Phase 3-Leadership Development1993-98
Detailed program written with my input Escape mechanism created Exposure to all areas of business; service
delivery, administration, sales/marketing, staff training etc
Further training; MBA at Melbourne Business School (1997-98)
Formal management responsibility
Phase 4-Changeover Nov 1998
By late 1998, we were ready Des had just turned 60; I’d just turned 33 Decision communicated to staff and
externally (advisers, business media etc) Handover function (not a retirement roast) Occupied MD’s office and employed new PA Des relocated to another branch
Phase 5-Transition1999-2001
Des stayed on as Executive Chairman Clear demarcation of duties established A real job; specific projects, adviser,
consultant, mentor, devil’s advocate Other involvements; FBA, Golf, writing Monthly quality time meetings
Post Mortem
Far from smooth sailing, but it worked Des ultimately sold equity too “Cousins” supportive of my leadership Company still performing strongly Model for other internal applications (ACC) Vehicle to join the Speaker’s circuit
Reasons for success
Treated succession as a process, not an event Enlightened incumbent leader Started thinking about it well in advance Established objective criteria Found someone who met them, rather than the nearest “fit” Communicated plan to all stakeholders
Treated process as investment not a cost
Reasons for success (continued)
Focused on successor’s development needs, and treated them as an investment, not a cost
Built in processes for retiring leader to support, advise and mentor the successor
Provided successor scope to develop own leadership style
Created a meaningful ongoing role for the retiring leader
Expectations of PlayersInherent Tensions
Incumbent Successor “Cousins” Staff Advisers
Expectations of the IncumbentI’m out of here (sort of)
Retain a meaningful role (for a while) Freedom to step back Maintain a reasonable income Contribution recognised Strategy & Legacy respected Experience utilised
Expectations of the SuccessorBe gentle with me
Actual, not notional leadership Scope to build own management team Scope to use own advisers Given a reasonable honeymoon period Ongoing appraisal/recognition Return to father/son relationship
Expectations of the “Cousins”We’re with you, provided….
Our role & contribution is recognised We’re kept informed and have a say Our investment is well managed We progress and develop too
Expectations of StaffSo what’s Changed?
Cultural lag Sceptical about prospect of change Slow to embrace change Reluctance to acknowledge change But change happens (whether they admit it or
not)
Expectations of AdvisersBusiness as Usual
Assumption of continuity Treat successor as a new client Re-articulate value proposition Change of personnel?
I’m not afraid of death; I just don’t want to be there when it happens
Woody Allen