The movie “Gladiator” is at the top of my list of favorite films.
For those who missed this one for fear of too much gore, let me sanitize the tragedy that unfolds in the movie. Maximus is general of the legions of Rome fighting against the barbarians to the north – the Germanic tribes. Marcus Aurelius, the aging emperor, wishes that the heroic Maximus would take over the running of the Empire when he is gone and tells Maximus this wish.
But the Emperor has a son named Commodus, a ruthless and valueless son who believes the title of Emperor belongs to him through birthright. I am not giving you a spoiler alert because after all, this movie was released in 2000. You have had plenty of chance to see it… The movie shows the murder of the Emperor by the villainous son, the enslavement of Maximus, who becomes a gladiator slated for death, and his rise to avenge the Emperor’s death in a valiant lunge at the usurping ruler – Commodus – killing him and freeing the empire for democracy and rule by the Senate.
By now you are probably wondering what this has to do with family businesses. Plenty. Your business is your kingdom, your legacy.
Often, children are very capable of working their way into the organization and succeeding the owners. But sometimes they aren’t. Sometimes the legacy is better served by an outsider – thus, The Maximus Effect.
This is not implying a regent role: this is suggesting total control and a new direction. The outsider who steps in would do so permanently.
All parents try to raise their children with values reflecting their own. Most of the time, these values stick and when it comes to morality and ethics, the child is a natural, albeit imperfect (meaning not identical) reflection of the parents. In this way, we all carry a bit of legacy with us, regardless of whether the family we were born into was lucky enough to have a business. I reflect my parents, and my children reflect me. Not perfectly, but enough to know whether they were raised right.
But sometimes the teaching fails. Whether the spawn is affected by hubris, jealousy, or some other personal conflict, it matters not. The best direction leads to devastating consequences, and when a family business is involved, this spells disaster for the legacy and often the firm.
The interesting part of this is the vexing conflict the owner must go through, torn by the emotion of a child and a plan gone wrong, and a legacy that ends with him/her. All too often, business owners choose blood over what is best for the firm. On those rare occasions when an owner is able to see clearly with a 20/20 lens, the conflict is no less painful. It requires the owner to swallow pride and in the end put what is best for the firm above all else. It means the owner must turn their back on their children for the sake of the company and all the stakeholders.
Think of the conflict that must go on in the mind of the owner in these situations. “Could the next generation be better at managing than they have demonstrated thus far? Could I be wrong in assessing character?”
The other side of that is, “Can I set aside my own self-interest for the betterment of the firm? What if the new person in control is no better than the next generation would have been?”
The emperor Marcus Aurelius made his decision known privately to Maximus until it was time to let his son know his true intentions. This conversation did not go well, leading ultimately to his assassination at the hands of a power-thirsty son. Marcus seemed like a good ruler, with the exception of his attacks on some of my German ancestors… but he made one fatal decision. No, not the one to bypass his son. But rather, not to communicate his intent all along.
This is the Achilles’ heel (mixing my historical references in an attempt to make my point). The owner of the firm should be transparent, especially as a parent. Surprising a daughter or son later in their life is not a good plan. All too often, owners leave tough decisions until it is too late or fail to properly groom the decision over a long period of time. Just like the stock market responds unfavorably to surprises, so, too, is it human nature to respond poorly when the plan has not been clearly articulated over time.
Would Commodus have responded differently if his father had groomed him for the eventuality of another taking the throne? Possibly not – but that is the Roman Empire. This is Wisconsin.
Here and today, the owner owes it to the firm, the current employees, the customers and other identified stakeholders to turn the family business over to the most qualified. With the steady grooming hand of the owner over years, this most likely will be their child – the next generation – but the statistics are daunting, showing the failure rate of that next generation. Even with the ablest of forethought and guidance, the family business is likely to fail with transition. With 75-80 percent of U.S. GDP depending upon family businesses to survive transition, it is important that we do everything possible to assist in the grooming and tutelage of this next generation of business leaders.
Rarely do we see an outsider so beloved and so humble that the owner has a crystal clear decision. The movie “Gladiator” refers to Maximus as the “stoic philosopher.” I am not sure that trait is best for running a family business, but his other traits – integrity and loyalty – are probably what the emperor was seeing all along.
The Maximus Effect makes choosing family first a complex issue, even if you are the emperor.
After all, you have your whole kingdom to look out for, and you will decide its entire future direction with this one decision.
-David Borst, Ed.D., is executive director and chief operating officer of the Family Business Legacy Institute LLC.