The family business twist in 'Inception'

By Willem Smit, Joachim Schwass

The Hollywood hit offers insight into family firms -- and perpetuates some biases.

The movie Inception is full of intense action scenes, new-age special effects and intriguing concepts. Critics have dissected its multi-layered plot. Yet, Hollywood hype aside, the movie portrays many facts, fictions and biases about family businesses.

 

Mr. Cobb, played by Leonardo DiCaprio, leads a team that infiltrates people’s dreams in order to steal their ideas. He is hired by Saito (Ken Watanabe), CEO of a large Japanese energy corporation, to go beyond what he normally does. Saito, fearing a powerful family-run competitor called Fischer Morrow, challenges Cobb to “incept,” or plant, an idea in the mind of his business rival through dreams.

 

Interwoven into this complex plot is an intriguing family business theme. The film depicts the unheralded strength of, as well as the continuity threat to, family businesses.

 

The power of family business

 

Generally speaking, family firms are conservatively financed and underleveraged. They are also known to be quick decision makers, thanks to the alignment between shareholders and management.

 

In Inception, Saito is well aware of the competitive threat posed by Fischer Morrow. Rather than making a generous offer to buy Fischer Morrow from the founding father/CEO, Maurice (Pete Postlethwaite), and his son/heir, Robert (Cillian Murphy), Saito summons Cobb and his team to subconsciously influence Robert to split up his father’s empire.

 

Saito understands that this family business competitor is not a small player. He realizes the unlikelihood of making an offer to buy Fischer Morrow and resorts to using non-market means to dismantle his rivals. Cobb’s team devises a plan to incept the idea into Robert’s mind that his father doesn’t want him to follow in his footsteps.

 

Conveniently enough—this is Hollywood, after all—Saito is able to cunningly take advantage of the reality of business succession.

 

 

The succession planning angle

 

Continuity is uncertain when any business changes leadership, but family businesses are most vulnerable when succession is unplanned. The film makes it very clear that Fisher Morrow lacks a well-thought-out succession plan. As the company’s founder is on his deathbed, Robert is urged to talk to his father about signing a power of attorney.

 

With a long flight to Maurice’s funeral, Cobb’s team can do their work in getting Robert to think, “I will create for myself, not follow in my father’s footsteps.” Yet, in the real world, Saito probably could have weighed the statistics a little better. With Fischer Morrow’s succession so badly planned, the chances for passing successfully to Robert’s generation would already be low. The Fisher Morrow dynasty would be challenged naturally, likely lending an advantage to competitors as powerful as Saito.

 

In the end, Cobb and his team accomplish their goal. The son is determined to go his own way, and Saito is relieved that Fischer Morrow is headed downward.

 

An American perspective

 

Inception is an American production, and the ideas it intentionally or unintentionally “incepts” into our minds encompass a certain American ideology. In corporate America, generally speaking, family firms do not have an overly positive image. They are liable to be accused of nepotism, opacity in corporate governance, and low pay and unclear career prospects for non-family employees. This allows Inception to wrap itself around the need to destroy Fischer Morrow.

 

In other regions of the world, family firms are seen as important generators of jobs and stable contributors to the economy. They are admired as long-term thinkers.

 

Bottom line, Inception is a great thriller with fantastic effects. It’s nice to see a movie addressing the complexities, challenges and rewards of family business, even if the ideas are vaguely “incepted.”

 

Joachim Schwass is Professor of Family Business at IMD in Lausanne, Switzerland, and director of the Leading the Family Business program. Willem Smit is a research fellow at IMD.

 

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Winter 2011

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