Family
Business Magazine E-Newsletter
August
21, 2007
Contents
1.
Ratan Tata, 69, has yet to name a successor.
2.
Fortune: Carlos Slim is 'the
richest man in the world.'
3.
Steinbrenner family roles have changed at N.Y. Yankees.
4.
The upsides and downsides of maternal mentoring.
5.
Forces that impede strategic planning.
1. Ratan Tata, 69, has yet to name a
successor. Ratan N. Tata, the 69-year-old chairman of
giant Indian conglomerate Tata Group, has grown the market value of the
18 listed Tata companies from $12 billion to $62 billion since 2003 and
is said to be considering acquiring Jaguar Cars and Land Rover from
Ford Motor Co., according to a recent profile in Business Week. "Tata is arguably
the most important among a new pack of multinationals charging out of
big developing nations," the article said. But Ratan, who took the helm
of the conglomerate 16 years ago, after the death of his uncle J.R.D.
Tata, "hasn't named a successor or said when he plans to step down,"
the report added. Ratan, who is single and has no children, "could even
be the last Tata to oversee the group," according to the article.
"Younger brother Jimmy and three half-sisters aren't involved in Tata
businesses. His reclusive half-brother, Noel, runs a Tata-owned retail
chain, but it's unclear" whether he has the potential to lead the
conglomerate. Succession "is a problem," Ratan Tata told Business Week. "I am involved in
more issues than I think I should be." (Source: Business Week, Aug. 13, 2007.)
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2. Fortune:
Carlos Slim is 'the richest man in the world.'
Carlos Slim, whose net worth grew by $12 billion this year and is
estimated at $59 billion, is "the richest man in the world," according
to a profile in Fortune. (The
article estimated Bill Gates' worth at $58 billion and noted that while
Gates is selling off Microsoft stock to fund his foundation, "Slim's
fortune is growing at a stunning clip.") Slim's family's holdings
"represent more than 5% of Mexico's 2006 gross domestic product," the
report noted, "and Slim-controlled companies make up one-third of the
$422 billion Mexican Bolsa, or stock exchange." The article said that
Slim, 67, is grooming his three sons, who range in age from 38 to 40,
to succeed him. Carlos Jr., Marco Antonio and Patrick "run day-to-day
operations at various Slim businesses and are increasingly making
strategic decisions, while their father, who had heart surgery in 1997,
pulls back," Fortune
reported. (Source: Fortune,
Aug. 20, 2007.)
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3. Steinbrenner family roles have
changed at N.Y. Yankees. New York Yankees owner George
Steinbrenner's uncharacteristic reticence has raised questions about
his health, and observers are speculating about whether his family will
one day sell the team, Fortune
reported. Steinbrenner, 77, "lost his chief lieutenant -- son-in-law
Steve Swindal -- when Swindal's wife, Jennifer, filed for divorce in
March," the article noted. The No. 2 role now seems to be played by
George's youngest son Harold "Hal" Steinbrenner, 38, the article said.
According to the report, Swindal originally became chief lieutenant
because neither Hal nor his older brother, Henry ("Hank"), wanted the
job. "Hal, who lives in Florida, acknowledges some concern that his
increased role will take him away from his family," according to the
report. Hal told Fortune that
"There's no thought of selling the team," but the magazine noted that
the team could fetch more than $1 billion if it were sold. People
familiar with the team speculated that such a sum might be hard for the
family to resist after George's death. The Yankees are organized as a
limited partnership; 23 limited partners outside the Steinbrenner
family own slightly less than half the team, but "exercise almost no
influence," Fortune
reported. (Source: Fortune,
Aug. 20, 2007.)
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4. The upsides and downsides of
maternal mentoring. "Over the past two decades, I have
consulted with numerous female family business leaders and have
observed that their mentoring style is usually a collaborative one,
whereas many of their male counterparts are apt to use a more
hierarchical model," writes family business adviser Florence Kaslow in The Family Business Mentoring Handbook.
"Mothers are apt to compliment their offspring's accomplishments and
build on and from their strengths. They guide through encouragement and
role modeling when appropriate. Women tend to adopt this mentoring
style because they themselves have responded well to it. Educating and
guiding through nurturing, which is similar to the mothering role, is
familiar to them." But, Kaslow cautions, there is a downside: "Mothers,
if they are not careful, can go too far in handling problems for their
children that the children should learn to resolve themselves."
For more
information on mentoring by mothers -- and fathers, siblings and key
non-family employees -- see The
Family Business Mentoring Handbook. Learn more about the book
and see the table of contents here.
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5. Forces that impede strategic
planning. "The very nature of family-owned businesses
tends to encourage a focus on day-to-day tactics at the expense of
systematic and disciplined strategy work," writes executive coach Mark
Brenner in the current issue of Family
Business Magazine. "Further, because family businesses are so
tradition-bound, strategic planning can appear rather threatening
because, by definition, it challenges tradition." Brenner cites four
"countervailing forces" that block strategy work in family firms:
- The force of complacency: "If we
continue to do what we've done, we will continue to be as successful as
we've always been," the thinking goes. But, Brenner notes, "there is no
greater threat to success" than the temptation to keep one's nose to
the grindstone.
- The force of inertia: "Don't move me
out of my comfort zone. I have done fine here. I'm doing fine here, and
I will continue to do fine."
- The force of over-control: Brenner
notes that this force is embodied by a strong founder who has made the
business prosper in spite of hardships and challenges. "I founded this
business and I have taken it this far," the founder says. "I know
what's best."
- The force of conflict aversion:
Brenner notes that this force holds back employees who see the owner's
battle scars and medals. "It's not right for me to challenge his
authority on how to take this business to the next level," they say.
For the story
of one family company that embraced strategic planning -- the
HoneyBaked Ham Company of Ohio -- see "Strategic planning is vital for
managing business risk" by Mark Brenner in the Summer 2007 issue of Family Business
Magazine. Visit our website
for subscription information.
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