Family Wars Is Conceptually Thorough with Many Real-World Case Examples from Which the Authors Draw Important Practical Lessons

i “One of the most interesting and unusual books on family businesses I have ever read… profound, rich and reflective." Konstantin von Unger, fifth generation family member and member of the Supervisory Board of the Henkel Group “Lessons of failure can be as instructive as lessons of success. Devoted business-owning families study both. Two long-committed students of family business have collaborated on this interesting and valuable book." John L Ward, Principal, The Family Business Consulting Group, Intl and Clinical Professor of Family Enterprises, Kellogg School of Management “Where would insurance, engineering and aviation be without the through examination of disasters? Where would medicine be without the postmortem analysis of pathology? Grant Gordon and Nigel Nicholson have made a tremendous contribution to our understanding of family dysfunction and conflict. Family Wars is conceptually thorough with many real-world case examples from which the authors draw important practical lessons. The book is essential reading for anyone interested in both the discontinuity and continuity of family enterprise.” Ivan Lansberg, Ph.D., Senior Partner, Lansberg, Gersick & Associates “Family Wars is not just a collection of juicy inside stories about conflicts in famous business families. It's an analytical look into the emotions which drive family firms through the lens of a trained profes- sional and experienced educator. Every reader of this remarkable book will be able to recognize themselves in it. Prepare to be surprised.” Dr Gita Piramal, Chairman of BP Ergo and managing editor of The Smart Manager “Build up, inherit and destroy has been said to be the classic lifecycle of family business. Reading the fascinating stories in "Family Wars" will give you insights into the hidden secrets and agendas of some great dynasties. The book offers a guide on how to steer through rough seas and survive for generations.” Hans Jacob Bonnier, Chairman, Family Business Network International ii “I enjoyed reading Family Wars. However, its easy style and interesting stories can be deceptive; this is a serious book addressing a serious issue. But who said that thoughtful academic research should not be fun!" Mo Ibrahim, founder of Celtel and Chairman of the Mo Ibrahim Foundation “The book captures the breadth of reasons for family conflict and how it is present in every culture. The authors provide pointers on how to pick up early warning signals and to convert conflict to the family's advan- tage. It is a ‘must read’ for owners who want to sustain the family and the business over time.” Subbiah Murugappa, former Chairman Murugappa Group, India “This book will appeal to both those seeking enlightenment on famous families’ business ventures and those who enjoy the vicarious pleasure of a good read.” Roger Pedder, Former Chairman of Clarks Shoes and Entrepreneur iii FAMILY WARS Classic conflicts in family business and how to deal with them GRANT GORDON & NIGEL NICHOLSON London and Philadelphia iv Publisher’s note Every possible effort has been made to ensure that the information contained in this book is accurate at the time of going to press, and the publishers and authors cannot accept responsibility for any errors or omissions, however caused. No responsibility for loss or damage occasioned to any person acting, or refraining from action, as a result of the material in this publication can be accepted by the editor, the publisher or any of the authors. First published in Great Britain and the United States in 2008 by Kogan Page Limited Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of repro- graphic reproduction in accordance with the terms and licences issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned addresses: 120 Pentonville Road 525 South 4th Street, #241 London N1 9JN Philadelphia PA 19147 United Kingdom USA www.kogan-page.co.uk © Grant Gordon and Nigel Nicholson, 2008 The right of Grant Gordon and Nigel Nicholson to be identified as the author of this work has been asserted by them in accordance with the Copyright, Designs and Patents Act 1988. ISBN 978 0 7494 4630 7 British Library Cataloguing-in-Publication Data A CIP record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Gordon, Grant, 1956– Family wars : classic conflicts in the family and how to deal with them / Grant Gordon and Nigel Nicholson. p. cm. Includes bibliographical references and index. ISBN 978-0-7494-4630-7 1. Family-owned business enterprises--Management. 2. Family-owned business enterprises--Succession. 3. Family-owned business enterprises. I. Nicholson, Nigel. II. Title. HD62.25.G67 2008 658.49053--dc22 2007043996 Typeset by Saxon Graphics Ltd, Derby Printed and bound in Great Britain by MPG Books Ltd, Bodmin, Cornwall v To our families vi This page is intentionally left blank vii Contents List of figures ix Acknowledgements xi 1 Family wars 1 2 The ideas: the roots of family warfare 5 Families at war 6; The roots of conflict 10; Gene politics and the family firm 15; Family dynamics 22; Culture and personality 27 3 Brothers at arms 35 Introduction 35; Koch Industries – destructive redress 38; The Reliance story – the myth of unity 42; The Dassler family – racing for supremacy 50; The Mondavi family – a bitter cup 55; The Gallo family – vintage conflicts 60 4 Fighting for the crown 68 Introduction 68; The McCains – when the chips are down 73; IBM – the Watsons – a struggle for identity 85; Bata Shoe – a struggle for strategy 90 5 The house that hubris built 96 Introduction 96; The Ford family – parental oppression 99; The Dart Group – an excess of willpower 105; Château d’Yquem – the perils of condescension 109; The Redstone viii l Contents family – the leader’s iron grip 114; Solid Waste and the Waxman family – greed, deception and destruction 118 6 Heads in the sand – the insularity trap 123 Introduction 123; The Guinness story – sliding into scandal 125; The Sakowitz story – the unchecked leader 131; The Steinberg story – falling apart, together 140; The Louisville Times and the Binghams – losing the legacy 149; Seagram and the Bronfmans – the runaway leader 159 7 Schism – the house divided 166 Introduction 166; Pritzker – fighting for the spoils 169; The LA Times Group and the Chandlers – the centrifugal family 179; Freedom Communications and the Hoiles – a battle for control 185; The Pathak family – spice wars 188 8 Un-civil war 191 Introduction 191; U-Haul and the Shoens – a shattered dynasty 192; The Gucci family – a tragic Italian opera 208 9 The lessons – the price of war and the prize of peace 220 From poisoned roots to the fruits of success – the essential lessons of warfare 221; Warning signs and practical measures 238; In praise of conflict 244 Notes 247 Index 271 ix List of figures Figure 2.1 Parenting styles 22 Figure 3.1 The Koch family 38 Figure 3.2 The Ambani family 42 Figure 3.3 The Dassler family 50 Figure 3.4 The Mondavi family 55 Figure 3.5 The Gallo family 61 Figure 4.1 The McCain family 74 Figure 4.2 The Watson family 85 Figure 4.3 The Bata family 90 Figure 5.1 The Ford family 99 Figure 5.2 The Haft family 105 Figure 5.3 The Lur-Saluces family 109 Figure 5.4 The Redstone family 114 Figure 5.5 The Waxman family 118 Figure 6.1 The Guinness family 126 Figure 6.2 The Sakowitz family 132 Figure 6.3 The Steinberg family 140 Figure 6.4 The Bingham family 150 Figure 6.5 The Bronfman family 160 Figure 7.1 The Prtizker family 170 Figure 7.2 The Chandler family 180 Figure 7.3 The Hoiles family 186 Figure 7.4 The Pathak family 188 Figure 8.1 The Shoen family 193 Figure 8.2 The Gucci family 209 x This page is intentionally left blank xi Acknowledgements We would like to thank the people who have helped us at various points in the preparation of this book. Katrina Collinson helped us in the early stages of the case study research, and subsequently Akhila Venkitachalam was invaluable in helping to locate, assemble and integrate the large mass of information that has gone into the recounting of these stories. We also have very much appreciated Mark Skeen’s research, especially to generate the genograms and check the accuracy of our data. We would also like to thank our publishers Kogan Page, first in the person of Pauline Goodwin as the first enthu- siast and committed supporter of this project, and subsequently Helen Kogan for her encouragement, advice, and energy in helping bring this to fruition. We would like to express our appreciation of our long-suffering assistants, Sharan Sandhu and Yvonne Szuca, for helping make sure the book did not turn our diaries upside down. Profound gratitude is owed to our wives, Brigitte and Adèle, and our children, for tolerating our endless phone conversations, general absorption and absent- mindedness, and occasional abuse of weekends and evenings during the periods of maximum flow during this project. Finally, we want to thank all the inspiring families in business we have met and worked with through the Institute for Family Business and the London Business School. It is their learning and wisdom that have made this book possible. Grant Gordon Nigel Nicholson xii This page is intentionally left blank 1 1 Family wars The chief executive officer (CEO), James, is speaking.

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