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The Development of Greek Shipping Families:

Succession across Generations

Panikkos Poutziouris Ph.D. Professor in Entrepreneurship & Family Business

Aims

To define the developmental axis of the family in business

To expound how owner-managed family business dynamics shape

strategic developments in Greek

Shipping Firms

To offer 10 commandments for trans-generational family business

continuity planning

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Source: Leach and Bogod, 1999

Definition: What is a family firm ?

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Type of family in business-group

OPERATING MANAGING INVESTING HOLDING

Business Model evolves with scale/scope, family ownership/funding structure

DNA of Greek Shipping

Family values, ties

Patriarchal culture

Matriarchal support

Paternalism

Entrepreneurialism:

low cost , efficiency ,

unorthodox opportunism

buy cheap , 2nd hand in the downturn

Financial prudence

DNA of Greek Shipping

Thriving through successive crises

Networks of families - diaspora

Family relationships , social capital

Outward looking business strategies

Group Diversification alliances

Astute specialization low running costs !

Tapping into capital mobility

Risk management innovations

Superiority grows via ananeosis

Succession trends ! traditional values + innovations =entrepreneurial horizon

New generations, new talent

Financial know

asset based finance-leasing; syndicated loans; bonds; securitization and risk management; PE ,

IPOs; preferences equity,

New fleets

New business models (alliance investing)

New Integrated Services (shipping, insurance, banking), 3rd party ship management;

New business structures and partnerships

The Emerging New Greek Shipping : Cultural configuration

Foundation: Patriarchal

Family System

Inter-Intra Generational Matriarchal

Triangulation

Integrated Holding: Family Unit per Business Unit (Partnerships)

Social Democratism

(Loyals)

Traditionally Royalism

Son A Bros A

Introvert, Rubber stamp (Old Genea)

to Advisory team to Strategic BoD

Governance

Paternalistic (Older Generation) to Professional-Meritocratic

Business System

Stavros

George

Livanos b:1891; d:1963

Arietta

Zafirakis Founding

Generation

Eugenia Athina-

Mary Stavros

Niarchos

Onassis;

Spencer-

Churchill;

Niarchos

George S.

Livanos )

nine grandchildren

three great-grandchildren.

Geno

II

Geno

III

Geno

IV

Lida

Voivoda

The Dean

I have no money I have ships

Founding

Generation

Geno

II

Geno

III

Geno

IV

Ypatia

Nikolaos F. PITTAS

& Brothers

Nikolaos F. PITTAS

& Sons in 1900

George N. PITTAS

& Brothers in 1913

Nikolaos F. PITTAS

1837-1913

Joanna Chios Navigation Co

in London, 1960s

Romania office

before WWII

Aristides

J Pittas Nicos

J Pittas

Oceanbulk Maritime

Piraeus, 1991-94 (with Petros Pappas)

Aristides

J Pittas Nicos

J Pittas Manolis

J Pittas Eurobulk Ltd

Piraeus, 1994

Euroseas Plc

Nasdaq, 2007

CEO/Chair

Aristides J Pittas

45% Family

Associates

Aristides

P Pittas

Source: Euroseas Ltd , March 2014

George

Peter

Livanos 1926 1997

Fotini

Carras Founding

Generation

Peter

George

Livanos

Geno

II

Geno

III

Marina

The Innovator

Flying Dolphins

Smaller Vessels HELMEPA - Marine Environment Protection

Alliances-Investing for growth

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Business

Axis

Organizational Behaviour, Steven L. McShane, Canadian

3rd ed. 1998, McGraw-Hill Ryerson Ltd.

Family

Axis

Ownership

Axis

Maturity

New Phases ?

Expansion/

Consolidation

Survival Start-Up

Young

Family

Firm

Entering

the

Business

Working

Together Passing

the Baton

Controlling

Owner

Sibling

Partnership

Cousin

Consortium

Permutations of Trust, Bond, Unity,

Goal Alignment

The 3 axis Developmental

Model

Fast-growth ?

1:10

Kyriakos

Mouskas b:1917; d:2001

Venizela

Loukaides Founding

Generation

Helen

Pitttas

b:1943

Gloria

Mouskas

Mikelides

b:1943

Zenon

Mouskas

b:1941

Yiangos

Mikelides b:1938;d:2005

George

Mouskas

b:1953

)

Geno

II

Mary

Vavlitis

b:1956

The Mouskas

Zela b:1969

Kyriakos b:1971

Yiannis b:1997

Zenon b:200

Zenon b:1998

Irene b:2004

Kyriakos b:1982

Elli

b:1979

Zela

b:1969

Costas b:2005

Mary b:2009

Antonis

Mikelides b:1978

Yiangos

b:2005

George

b:2008

Nicolas

b:2010

Kyriacos

b:2012

George b:2007

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Family

Ownership Business Management

1 7 2

3

6 5 4

Support Harmony

Opportunities

Dividends Governance

Connection

Co value

Returns

Governance Exit

Reward, Promotion

Power

Succession

Based on Tagiuri et al

Family Owner-Managed

Business Dynamics

FOMD

The family business legacy

Pros

strong ties, trust & pride

long-term thinking: "our future"

flexibility

familial human capital

"excellence- culture

focused global niches

quality and customer service

loyalty

ethos & personal commitment

........

Cons

rigidity, trivialisation

pseudo-communication

Ltd professionalism ; HRM

nepotism

conflict and family feuds

emotional > business

introvert

ltd human and $ capital

succession crisis

Leadership

Onwership

Entrepreneurial

Growth Challenges

Money, markets, management, business model-operations; my-ego-politics

More growth capital (debt-equity)

Risk diversification (wealth-asset portfolio)

Liquidity for passive shareholders

Family in business harmony; Units for exiteers?

Succession , continuity planning

Leadership / Managerial teams

Ownership regimes

Funding ; Tax planning

Sustainable Success - Mastering Cs

Commander: Capetan , leadership in the seas; matriarchal leadership at home

Community: loyals , sailors., senior management ; familial M&A ; social capital

Congruence of goals : zeal for success

[Re-]Connected thinking communication

Culture: competitive entrepreneurialism

Control : financial prudence ; governance

Continuity across generations

Creative destruction of titans , new innovative firms emerging; Winning transformation of

family businesses into business families

FOMD PLANS

FAMILY PLAN

BUSINESS PLAN

GROUP

DISCUSSION TECHNOCRATIC

ADVICE

STRATEGIC SUCCESSION GROWTH PLANNING

DIAGNOSIS Evaluation?

Succession Growth Plan

HARD ISSUES

SOFT ISSUES

REVIEW

Personalities

Familia(s)

Wealth

Estate

Business

Management

Governance

Strategy

Financing

Generational Succession

tend to be stormy affairs !!

10 Commandments 1. Define values shaping vision, goals

2. Craft an open strategic business plan

3. Develop evolving structures

4. Build communication-reconnected thinking

5. Establish governance for FB, BF matters

6. Define succession planning process

7. Balance 3Cs:capital growth, control, cash for harmony

8. Evaluate tax implications

9. Establish neo-entrepreneurial platforms (VC)

10.Develop road map for O-M-F-B continuity ;

family protocol, family constitution

Governance for the

Enterprising Family

Private

Co

PLC [Un]- quoted

PLC

Family

Office Family

Foundation VC

The Family Constitution 1. Synthesis of Family - Shareholders Council

2. Values & Vision of Founder(s) FOMD Goals

3. LR business plan: familial legacy, exit, PLC ?

4. Governance structures, BoD ; NEDs

5. Family Plan for Family Involvement (4R, code)

6. Ownership: Shareholders Agreements (Ords A,B)

7. Financial policy (capital, dividend policy)

8. Management-Leadership Succession

9. HRM Practices , non-family management

10. Philanthropy - Communication, Harmony

Words of optimism

We have 5,000 years of history . Weve been through world wars, civil wars,

occupations. And for wrong or for right,

were still here. We survived. Why should we abandon the ship now?

George Tsavliris, Ship-owner

in FT , 21 August 2010

Who is Who

ppoutziouris@uclan.ac.uk

Professor Panikkos Poutziouris is Head of the

Business School and Professor of Entrepreneurship and Family Business at UCLan Cyprus, the enterprising British University on the island. He he has been associated with Manchester Business School for over two decades, as Senior Lecturer in Entrepreneurship and as visiting Associate Professor in Family Business .

Panikkos lectures, researches, publishes and consults internationally on entrepreneurial management and strategic financial developments for families in business.

Dr Poutziouris has been the country expert on family business entrepreneurship working with OECD and European Commission; is Past President of IFERA - International Family Enterprise Research Academy, and served as a member of the advisory board of IFB (UK). In 2011, he has been honored with the FFI International Award for exhibiting leadership in promoting globally the family business entrepreneurship across commercial, academic and social frontiers .