Family business leaders approaching retirement can learn from a researcher’s description of four styles of departing executives: Monarchs, Generals, Ambassadors, and Governors. The style of a departing executive is a crucial variable in the succession process of any family businesses.

Ivan Lansberg’s family suffered a disastrous family business succession. As a result, he became a family business researcher. He shares the wisdom he developed in Succeeding Generations: Realizing the Dream of Families in Business (HBS Press, 1999). Lansberg, citing Jeffrey Sonnenfeld’s research on both family and non-family executives, identifies retiring leaders’ “four styles of departure” (p. 256).

Monarchs Balk

Monarchs refuse to let go and will not even consider planning for their departure. A familiar stereotype, they are typically authoritarian leaders. And as they get older, they become even less willing to delegate authority and share information. Because the power to change the system and structure a succession plan is usually in the senior owner’s hands, little can be accomplished without the person’s involvement.

Generals Undermine

Generals are as determined as Monarchs to stay in power and retain control, but their strategies are more devious and subtle. For example, they may plot an eventual return to power by – consciously or unconsciously – installing an incompetent successor or timing the transition to coincide with a crisis. Similarly, they may deprive a successor of the training and development opportunities needed to succeed or prevent them from selecting their own executive team. Generals send mixed signals, creating confusion, frustration, and eventually generational conflict.

Lansberg suggests that both Monarchs and Generals “are fleeing from the threat of their own decline and demise.”

Ambassadors Change Roles

Ambassadors and Governors are not threatened by but instead take pride in the abilities and accomplishments of the rising generation. Often, they have been thoughtful mentors.

Ambassadors turn over managerial authority to their successors but work out a continuing role for themselves as advisers or representatives of the family business. Sometimes they are able to continue in an important nonmanagerial function in the company. Ambassadors retain the respect and authority that comes from being elder statesmen, without succumbing to the temptation to directly influence those now responsible for major decisions. They cede their former office space, and publicly and repeatedly affirm trust in the successor and the new management team.

Governors Depart

Governors sever ties with the family company entirely and move on to new challenges, as when an elected official completes the term of office. For example, they may start another (non-competing) business, run for office, teach, travel, consult, and/or devote themselves to philanthropy. Governors may quietly and strategically promote shared purpose in the extended family, knowing how essential that is for long-term family generativity.

Each Style Has Strengths, Liabilities

Lansberg cautions that it is risky to view any given style as inherently good or bad for business, since each style has strengths and benefits which create related issues and challenges in a succession process. Whatever the style, succession is understandably very difficult for the departing executive. “Turning over control of the family business … requires an acceptance of the fact that their centrality in the family – up to now derived in part from their control of the family’s principal source of income – will eventually come to an end.” (p. 266)

Being Pulled to Your ‘Next’

A fresh take on Lansberg’s topic is The Business Transition Handbook: How to Avoid Succession Pitfalls and Create Valuable Exit Options (JWC Publishing, 2023) by Laurie Barkman. Her podcast is called Succession Stories. She observes: “The happiest exits occur when an owner feels that they are pulled to their ‘next.’ Pull factors give you reasons to be excited about your next chapter. Pull factors are things you want to do in the future” (p. 37). The presence or absence of pull factors may help explain why, after a succession process, some wealth creators feel free while others feel lost.

Can We Help?

Change is inevitable, so the question becomes, “Will we change by design or by default?” People who successfully navigate this highly emotional process are committed to a shared mission that incentivizes persistence. Our facilitation skills can help your family business change by design rather than default. Contact us today.