Chapter 5
“I Can See Clearly Now”
The origins of a fresh vision for the family business
“I have traveled millions of kilometers for Taittinger and developed a deep philosophy of people, culture…and who I am…When you die, people will not judge you by the amount of money you made; they will judge you by the amount of happiness they had with you.”
So says Pierre Emmanuel Taittinger, head of the Taittinger Estate and its world-renowned Taittinger Champagne.
The happiness Pierre speaks of is embodied by a glass of champagne.
The Champagne Way, says Pierre, is about “delicacy, elegance, happiness…and a glass of champagne to get you there more quickly.”
With miles of leadership logged, Pierre came to understand that while the Champagne Way is an ideal approach to living, it's not one that's afforded everyone. “I am a very relaxed man,” says Pierre, “but I am not relaxed when we spend 5,000 liters to wash a car every two days, and some people do not have water in Africa. When I see that we waste a lot of food, I am not relaxed. When I see that we spend fortunes in ways that are not totally useful, I am not relaxed. I am not relaxed to think that half of the world is not happy. How can you be relaxed? The world is greedy, the world has a lot of corruption; money has taken too much [importance].”
From this perspective, Pierre says of his leadership with Taittinger Champagne, “I am as small as a bubble of champagne.” Small and insignificant.
Happiness and humility define the essence of Pierre Taittinger's value system and have shaped his vision. It's not about dying a wealthy man. His vision of greatness is about investing in what his family has called the human project, serving others. “Generosity is for me important and we are never generous enough,” says Pierre. “It's important for me.”
A vision as lofty as the human project demands first recognizing one's humanity, how small one individual is in the big picture. “I'm a simple and modest man and my simple pleasure is to work in the mountains,” Taittinger says. “I have 1,700 years of history beneath my feet. I am a servant. In the monastery, one day you are chief, and the next day you become again a very simple monk, and I learned this way of seeing things.”
Beneath Pierre's vision is an aquifer of convictions, which give champagne happiness its substance and purpose. He is a third-generation member of the champagne family. Duty and faith are the backbone of his personality (Pierre was educated by the Jesuits), supplemented by an artistic streak he says his mother gave him, and bolstered by the spirit of a warrior, inspired by his Uncle Michel who fought and died in Africa.
Pierre earned his way to the top of the family business, capitalizing on his family's name and history, his personality and ability, and hard work. Pierre's father, Jean, was a soldier, politician, and businessman, who grew Champagne Taittinger into the third-largest estate in the France's Champagne region. Like his father, Pierre served in the military, and then became a salesman in the Champagne region. When a friend suggested the obvious, selling his own family's champagne, Pierre joined the Taittinger sales force. “I served more out of duty than passion.” But he quickly found the passion. “To sell the champagne, I had to sell myself, my whole personality. And I discovered that the words to convince the customers came easily.” When Pierre became worldwide ambassador for the company, he continued to use his words to inspire and persuade.
Pierre's vision for Taittinger Champagne is as simple and egalitarian as his outlook on life. “I would like to maintain a reasonable price for a bottle of champagne to be able to be part of each life, whether a modest life or a rich life.”
Without values, there can be no vision. A successor who searches and lives out his values as well as those of the family business, like Pierre, possesses the internal credibility to cast a vision for the family business. External credibility follows suit as the successor carries out the vision with authenticity.
A Story for the Future: Mission, Vision, and Values
Pierre Taittinger is an apparent contradiction: a simple man who lives the Champagne Way. And he has a vision to bring his champagne values to everyone. But that contradiction speaks to the way in which Pierre has taken family values and created his own vision for the future of Taittinger Champagne. To make your own way requires a healthy understanding of your family, what they have been for you, and how they have helped shape you. It requires a desire to begin to know yourself apart from the dominating influences of your life. Family values run deep in Pierre. Duty, faith, service, and sacrifice. But these values didn't save the company. It took Pierre Taittinger's personal vision to ensure that the family remained the guide of the Champagne Way. In the 1990s, the Taittinger family expanded their business, investing heavily in other luxury products. This eventually led to cash-flow and other financial problems, resulting in the sale of the Taittinger brands in July 2005 to the American-owned Starwood Hotel Group.
The sale was badly received by the champagne-producing community. It feared the new owners would pursue short-term profitability over quality, upsetting the equilibrium of the champagne industry.
Pierre objected to the sale, but wanted to protect his relationship with the family. “We have to respect each member of the family,” he says. “I wanted to protect the good atmosphere after and stay in good relationship with all of them. We could not say no.”
But he was also fiercely committed to the family business, the tradition, the values, and the personality behind the champagne. When Starwood found itself in the place Taittinger was years earlier—short of cash—Pierre fought to buy it back. On May 31, 2006, members of the Taittinger family resumed ownership of the company.
“We paid a big price,” says Pierre, “and that was fine.” For Pierre Taittinger it is never about the money; it's always about the champagne and what it can bring to others. It's the Champagne Way. Pierre exhibited a value that was seen across many of the interviews: While money is important, it is values beyond financial success that are critical to one's being.
It took family values plus personal vision to bring Taittinger Champagne back into the fold. Pierre's vision was harnessed to the family legacy, with its history, tradition, and abiding values. His mission was to make the Champagne Way accessible to all, but his vision also found a way forward after the family had cashed it in.
Respect the Past; Do What's Right for the Future
“Respect the past, but always do what's right for the future.”
Bill Wrigley's motto speaks for all successors who have successfully managed the process of leveraging family values into a vision for the future of the family business. The visionary leader of a family business has the hindsight to hold onto the foundational values of the organization and the foresight to know what needs to change in order to meet the challenges of the future. A visionary leader generates both meaning and growth.
Earlier in this book, I defined the generative mythology as system-centric. At the center of the family system, the generative leader provides the centripetal force to keep the system in place and the centrifugal force to keep it expanding. This leader is also sociocentric (not egocentric), putting the needs of the family and the business first, and subordinating the leader's own needs.
The concept of the generative leader comes from the archetype of the mythical king in ancient cultures and religions.1 The king brings order to chaos. The stories we tell as a family reflect the archetypes and beliefs that we have about kingly leadership, and our desire for good kings who use their power and position with compassion to generate the well-being and the productivity of their subjects. “The hands of the king are healing hands; thus shall the king be known,” as stated by the legend of Gondor in the third installment of the epic trilogy Lord of the Rings.
The anti-type of this archetypical king is the inflated and grandiose leader who deprives his people of selfhood. Applied to family business, this is the leader who establishes a cult of personality that stifles the next generation and deprives them of self-expression. Their inner experience is impoverished and limited.
The stories told about family business leaders frame the mythology. Often, they create a divine-like image of infallibility and inflate the ego of the leader. Rather than buy into the tyrant king archetype, I would argue that generative successors are more like the kings found in Hebrew scripture, who are described as servants of the Lord, entrusted to lead well, without considering themselves better than the people they led.2 Mortal leaders subordinate their egos in a much more generative manner. This is due, in part, because they know their place and calling: mortals who serve God and the people.
Moore and Gillette, who wrote The King Within: Accessing the King in the Male Psyche, argue that the mortal king is the servant of God rather than the incarnation of God on earth.3 Too often, however, family business mythologies portray the leader as the incarnation of God on earth rather than God's servant. To distill the characteristics of the generative leader described by Moore and Gillette, the generative leader has three primary characteristics: presence, self-confidence, and objectivity (all characteristics of a differentiated leader). Combined, these qualities enable him to care for and influence others. Presence reveals the self-mastery of these leaders. They are secure and centered, stand firm in chaos, and are not thrown off balance by others. They defend personal boundaries firmly (without hostility), but they also can act aggressively when such a response is necessary. Because they are secure in their identity, they can allow others to be themselves.
Generative leaders are self-confident and don't avoid the truth, especially when it comes in the form of criticism from others. When generative leaders are criticized, they don't lash out emotionally; they take the criticism and seek to understand its relevancy and validity. They see it as an opportunity for continued improvement. Not only are they responsible for their own well-being and the health of the organization, they also take appropriate responsibility when things go bad. Counter to how the mythologies will shape a leader, they are not martyrs, but make personal sacrifices and invest themselves in the business. “When people ask me, ‘Why are you working so hard? You own the place,’” says John Tyson, “I tell them, ‘That's why I am working so hard. I own the place.’ When you choose to run the business, you have to be there.”
Generative leaders understand their people; their objectivity makes them effective with those in their care. They are truth tellers but also empathetic, able to evaluate others objectively and with respect and compassion. Their ability to speak the truth and act truthfully helps others become more authentic. They know how to forge unity from disparate viewpoints because they listen to the truth spoken from all sides.
Because generative leaders care for themselves, they can care for others, their families, employees, and community. Edgy business practices, such as risk taking, and the rewards that ensue, are motivated by care and the desire to sustain and grow the organization.
Generative leaders understand that effective leadership inspires people to follow. People grant them the authority to lead because they trust these leaders to have their backs and their best interests in mind. More than that, they protect, celebrate, and inspire the people around them to be and do their best. What they give, these leaders get back tenfold.
The Rudder of Conviction
Values are the rudder that keeps a person, family, and company on course. Vision is setting that course. And our mission is the reason why we take the journey. Values are an extension of what has gone before, building to incorporate the beliefs and passions for the future. The vision is a goal for the future. Put another way, values help bring you to where you are, but they don't get you to where you want to go. The past always informs and shapes the future, but it doesn't provide direction for the future. In a family business, a successor must come to a point of crisis that prompts decisive action to create a new way forward—a fresh vision.
Children don't honor their parents by being like them; they honor them, and perpetuate the family legacy, only by building on what has been given to them. They leverage the legacy with their own talents for bigger and better things for both the family and business. Emulating the past will slowly starve a business of the essential creativity and innovation that a successor's uniqueness brings to it. The way forward is adaptation and progress, not imitation.
According to Massimo Ferragamo, whom we met in Chapter 1, the critical task of the successor is to understand and assess the company culture as well as what he or she can bring to the company. That includes exploring and understanding the company's DNA—that which distinguishes it from all of the other companies operating in that competitive space: what makes the company special. Although human DNA is fixed, a company's is not. Perhaps that's where the metaphor breaks down for a family business. The challenge for the successor is to interpret the culture of the company and add to (or subtract from) it based on his or her unique gifts—and given the context, environment, or needs of the business itself.
The successor must assess which aspects of the tradition are immutable, foundational principles (typically values, like commitment to people and communities) and which need to morph for success in the emerging era (business processes, like technology, products, and sometimes people).
Working with successors for almost 20 years in our Next Generation Leadership Institute and through the interviews with the successors for this book, I have found that successors are more successful when born into a mythology in which the hero—the founder or predecessor—is committed to a purpose larger than any one person's personal feats. The family's values are larger than the individual's success. But successors only find self-fulfillment in the family business when, with a foundation of values, they figure out what they can uniquely contribute to the story. The question is how a successor will sustain the values in a way authentic to his- or herself.
Perhaps the greatest gift that parents pass on to their children are values. Attributes and values are passed down across the generations not only through strands of DNA but also through shared familial and cultural norms. Children absorb values implicitly through show and tell—watching the behavior and actions of their parents, including observing what behaviors are rewarded and punished, while absorbing what their parents tell them. They also learn values explicitly through the influence and teaching of community organizations, such as school; church, synagogue, or temple; clubs; and friends.
However, values are knit into our personality and become markers of our identity only when they become beliefs upon which we act by choice. If values are the rudder of conviction that keeps us on course, integrity is the hand on the rudder. Integrity shows itself in the intentional alignment of values—the beliefs and behaviors claimed as important—and one's actions. Short of expression and action, a belief is just an opinion.
Successors are their ideal selves only to the extent that their actions are in alignment with their values; they lose their sense of self when they are out of alignment. When successors default on who they truly are and aspire to be, they forfeit internal credibility. Take the example of a successor who aspired to be a musician. He had proven talent, and pursued music at the collegiate level. When he told his father that his dream was to become a musician, his father's response was, “That's stupid. You are going to study business and come to work for me. You can't make a living as a musician.” The sad part of this story is that he decided to give up his passion for music, purely because his father told him it was stupid. In some ways, he gave up a part of himself to his father. He might never have been a successful professional musician—but he never even tried. That same successor is now in his fifties, unhappy being a part of the family business and struggling with depression and low self-esteem. I would argue that if he had taken the opportunity to pursue music, even if he had chosen to go back to the family business at a later date, he would have had better self-esteem and felt that it was more of his choice to be there than his father's.
Working through Personal Values
A person cannot build credibility on borrowed values. A leader must own them. Part of the struggle of growing up in any family is the push and pull of figuring out which family values are one's own, trying them on for size, and experimenting with them. For some, that might mean taking an exploratory trip of other values, by participating in a subculture outside the family. For the successor in a family business, the subculture might be another company, a trip abroad, leadership within the military, or education at a university. A family I worked with had a strong sense of Christian values that permeated both the family and the business. As the family grew and moved beyond its southern, rural roots, the next generation had to take ownership over what those Christian values meant to them, now that they were a larger and more diverse group. The resulting evolution of the family values was built on Christian values of the past, but with new ideas and interpretations that reflected a growing and diverse family.
Many emerging family leaders work out their personal values within the family business, defining values that sometimes wind up in opposition to the parent's. Joe Perrino and his father, Nick Perrino, introduced in Chapter 2, found themselves in a tug-of-war of values: Joe's entrepreneurial energy pulled against his father's approach to protect the business. While Nick feared Home Run Inn's competitors, Joe saw opportunities. Both Joe and Nick valued relationships, but only Joe was able to see the value of reaching across competitor lines (despite its risk). “Different” did not mean renouncing his father or the company that bore the imprint of his values. Home Run Inn's message today is the same as it was in 1917: Delicious pizza, made with homemade sauces and sausage without a single additive or preservative.
Joe said, “It's how we've done it ever since we opened our original pizzeria on Chicago's South Side. Consider it our family's way of bringing our history home to your family.”
People care deeply about the reputation and values of the companies they work for, and none more so than family members in a family business. Tradition and values moor a company through the endless sea of change. Values are sacred. To abandon them is to violate the sacredness of its history and tradition. Change the values, and no longer is there a family business, for values come from human beings.
Too often in family business, the mythology teaches us that the only way that we can add value to the family firm is to be the next CEO of the company. In my nearly 20 years of working with family businesses, I've learned that successful large multigenerational families need leadership of all shapes and sizes. They don't just need a CEO to be successful across generations. They need a strong family council leader. They need leadership on the board, and informally in the family. They leverage the talents of all family members, not just those of their CEO. They tap into the leadership of the daughter, who is the social worker, to lead difficult discussions. They invite the entrepreneurial in-laws to share their talents on the board. The essence is that they honor the talents and passions of all of their family members, and make their participation in the family business a choice.
Family Planning
Nonfamily corporations typically reflect the personality of their CEO. When business booms, the CEO gets the credit. When things go south, the CEO gets the boot, along with a golden parachute. To change the company, the company must change the CEO. A family business, on the other hand, derives its identity from its history, drawing its strength from the unity of the family. It is forged not in the boardroom but around the family dinner table.
“No matter where you go and what you do, you always come back to the family dinner table.” This could be the Ferragamo family credo. More than anything else, Massimo remembers the fun. “Having this large family, all working in the company as we grew up, it was fun. And at the dinner table, with eight people, minimum, every night is fun.” That also included conflict, which, for a family with strong-minded individuals, was part of the fun. “Six different minds and people can disagree and have different opinions, and discussions in the family can be quite heated sometimes, but when you get up from the table, no one ever left saying, “He wasn't in agreement with me, but I'm going to do it anyway.””
The Ferragamo dinner table was the focal point of family unity, and their center of gravity. Conflict is an indicator of family health when it is incorporated into a common vision that provides direction and purpose for the entire family. Everyone can have their own sense of identity and still pursue the same vision.
Even in their disagreements, the Ferragamos remained a tight family. When any family member had any kind of problem, the rest of the family was there to help. “It's an incredible healing process,” says Massimo.
Family unity is forged for a higher purpose than the continuation of the family and its values. It is unified around the opportunities the family business creates for their employees and its mission in the world. According to Alex Hoare, eleventh-generation CEO of private bank C. Hoare & Co., their family values have been translated into a mission of treating others how you would want to be treated—a rarity in the banking world:
Family values permeate the culture and act as a compass—a set of guiding principles for both nonfamily and family employees.
Family businesses instill their values into the culture through effective family strategy. Rather than seeing succession planning as a finite process, seeing it as the creation of a family strategy broadens the scope to fully encompass the breadth and depth of the changes that will happen through the succession transitions. A family strategy is much more comprehensive than the traditional succession plan.
Carrying a family business from one generation to the next is not about replacing the parent with the child. It's not that easy. Pierre Taittinger doesn't call it a succession, but a transmission. “I would like to leave at 65-years-old maximum because I think it's safe. It's forced me to organize my future, to organize the transmission.” When top management retired, he replaced them with brilliant 30-year-olds, young enough and smart enough to know what they were doing within five years. Pierre also employed two of his children, his son Clovis to be the export manager, and his daughter Vitalie the artistic director. “They are a reflection now” of the Champagne Way.
A family strategy uses the articulation of a clear mission, vision, and strategy and builds them into concrete actions and governance that will unify the family business for generations.
Mission
As I stated earlier, values are nice, but they mean very little if they aren't put into action toward an important goal or purpose. When you start a business, you get to choose your business partners. In a family business, you inherit your business partners. This is why it is critical for each generation to develop a sense of mission. Put another way, each generation of a family business needs to articulate and commit to a reason for being—a mission—that is about more than just money. This is the expression of why we want to be in business together and what can we achieve together, for our families, for our community, for our businesses, that we couldn't achieve alone.
This is the system-centric mission that provides the foundational reasons for the family to sacrifice for each other, their employees, and the business. This mission both taps into the values and the legacy that went before, while looking forward to the impact that a family can have if it works together toward common goals.
Succession planning will not work if there is not also a strategy for family unity. This process must be worked through with the next generation. In a family business, it's not simply a swap-out at the top. It's not merely about replacing the CEO. It's a seismic shift at the base that creates and allows for healthy family conflict.
New leaders in a family business do not heroically swoop in to save a company or take it to new heights. John Burke, Joe Perrino, Bill Wrigley, and Mike Hamra emerged as leaders from the struggle they had with their fathers. That struggle helped shape their identity, strengthen their values, and forge a fresh vision. They are more than just leaders of companies; they are stewards of a legacy. For Pierre Taittinger, the legacy is the Champagne Way, a set of values, and he is only one of many guides who preceded him and in the years to come will follow him.
The trap that some successors fall into is forgetting they are stewards of a legacy; they force change not in keeping with that legacy. An assault on the values of a predecessor is rarely successful. In general, successful emerging leaders create conditions in which the predecessor trusts that the successor has the best interests of both the family and business in mind. The successor must become a servant to the family legacy. That includes a respect of its heritage—an appreciation for and understanding of the unique circumstances that shaped the organization to date. Being a servant to the legacy also means operating the business according to family values and defining a vision that reflects the values. Finally, the servant leader has great empathy for the difficulty of change: What am I asking those who have gone before me to sacrifice?
Selfishness and dismissiveness are contrary to the very nature of a family business, which is called to serve the greater good rather than the greatness of an individual.
Back to the Future
A grand vision boils down to two questions: Does it fulfill the family business mission? And can we make it happen?
Generative leaders cast an inspiring vision while leaving space for the contributions of other stakeholders, future generations, and often times the contributions of employees and partners. Their values drive strong relationships.
This can be seen in the partnership and relationship between the Taittinger and Kopf families. A partnership created in 1947 and built on a foundation of values by Pierre's Uncle Francois Taittinger and Rudy Kopf of Kobrand Corporation brought “The Champagne Way” to California, launching Taittinger as a brand in the United States.
Building on the alignment in values between Kopf and Taittinger, the families expanded their relationship creating a 50/50 joint venture to build the famous winery Domain Carneros “By Taittinger” in California. Domaine Carneros is now producing and selling more that 700,000 bottles of sparkling wine a year as well as 300,000 bottles of Pinot Noir.
So generative leadership, built on values, can build relationships that can improve on what has been given to it and form a lasting foundation for the next generation.
“When you die,” Pierre says, “people will not judge you by the amount of money that you made; they will judge you by the amount of happiness they had with you.”
Pierre has a profound understanding of what his family gave him: skills, knowledge, and values. But he didn't stop there; he used his values and leadership to build and expand on the relationships and values that are critical to Taittinger's success.