What kind of successor are you?

Successor

By Rodrigo Basco, Ph.D.

The founder said – “there’s an opportunity” and created the company. He took risks, developed an original idea and the business prospered. The integration and allocation of available resources, both tangible (e.g., capital) and intangible (e.g., know-how, relationships and contacts) to pursue an idea make the difference between an entrepreneur and a non-entrepreneur. Let’s call the founder an entrepreneur. What about his/her successors? The successors belong to a different race.

  • They are the Smith family. Yes, them! They amassed a large fortune. The father, a brilliant engineer with good business ideas, set up a company in the field of high precision medical equipment. The three people behind him are his children, well educated and with a great living standard. Even though they all work in the company, they make a living from the company’s profits. All three children represent the ‘consumer successors’ living from the income generated by the previous generation. ‘While it lasts …’- I guess they think. The firm operates on automatic pilot, nothing is new since the father created it.
  • Those who are next, all grouped together, are the Perez family. Perez’s children don’t work for the company or have an interest in it. But they all live from firm’s profits. The Perez family considers the company to be like the State: nobody wants to pay taxes (i.e., work) but they all require good public services (i.e., rents). They are ‘scavenger successors’. The firm is immersed in a slow process of decay. It is difficult to move the firm out from this specific firm-family dynamic routine. Today the firm is in a vicious circle based on an extractive model of wealth that is a breeding ground for future family conflicts. However, there’s a possibility, in the near future, that one of Perez’s grandchildren may give to the firm a new life with breakthrough ideas and taking risks and opportunities.
  • The laggards are the Retegi’s family, an enterprising family. From the farm to new technologies. Each generation has managed to re-create the company, re-invent it. Each generation has changed the direction of the company in new and different areas, discovering and taking opportunities while using the resources and abilities, and know-how from previous generations. The entrepreneurial genetic code of the firm is the hallmark. Each successor has challenged the status quo that sprang from the success of the previous generations, imposing new leadership, new goals and new ambitions. These are the ‘entreprenurial successors’.

And you – What kind of successor are you?

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