Legacies Newsletter
by Ernesto J. Poza
Succession is a Transition in Ownership and Management
Research conducted by Louis Barnes at Harvard indicates that when transition occurs only in management or ownership and not concurrently in both, tensions are amplified. I have experienced these tensions, for example, in successors who have assumed CEO responsibilities, but still do not own significant equity. I have also observed these tensions in families where a younger daughter, for instance, and not the oldest son becomes CEO. This “inverted hierarchy”, as Barnes calls it, means that in the transition, the management and owning family roles are reversed, posing adaptation challenges to the successor, the siblings and other family members. More…