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The Case of the Contested Succession

Qualified but antagonistic descendants of a third-generation sign company vie for control.

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“NO WAY IN HELL will I ever report to her!” A lot of us in offices close to the conference room heard it clearly, followed by, “Yeah? Well, I’d sooner walk away from this company than be his underling!”

The board and management of Sign Tempo, a third-generation full-service company in Paradise, OH, was meeting to choose its next leader. Gerald Alighieri, the current president, would be stepping down in four months on his 68th birthday. He had been president for only six years, having VP’d for decades under older brother Reginald, or “Red,” the only member of the Alighieri family with fiery red hair.

The candidates voicing their opposition to each other were first cousins Thomas, son of Red, and Samantha, Gerald’s daughter. The board tasked with choosing Sign Tempo’s next leader consisted of Red, now retired, gray-haired and 72, Gerald, and a half-dozen older Alighieri family members and in-laws related to Beatrice, the wife of long-deceased company founder, Dante.

ABOUT REAL DEAL

Real Deal scenarios are inspired by true stories, but are changed to sharpen the dilemmas involved and should not be confused with real people or places. Responses are peer-sourced opinions and are NOT a substitute for professional legal advice. Please contact your attorney if you any questions about an employee or customer situation in your own business.

ABOUT THE AUTHOR

Created by ROLF L’MAO, Signs of the Times’ mascot. Email him at editor@signsofthetimes.com.

Thomas, known as Tommy around the shop when he was little, had long since assumed his full name and role as vice president of design and production. In his early 20’s, Thomas majored in graphic design at the local state college and contemplated working outside of the family business during his senior year. But the strong pull of blood and money landed Thomas in Sign Tempo’s design department after graduation. In five years, he was head of design and also took considerable interest in the fabrication equipment coming into the shop, as the company’s offerings grew well beyond painted signs and banners. For more than a quarter of a century, he had provided the main force behind product multiplication and diversification. At present, no one knew more about design and fabrication at Sign Tempo than Thomas.

Samantha (never Sam) was the company’s VP of sales, running a team of six reps covering a territory extending more than a hundred miles in every direction. Two years Thomas’ junior, Samantha was always considered the brightest of the Alighieris. A scholarship winner to an out-of-state private university, Samantha majored in engineering. No one was surprised when she moved to Purgatorio, IL for a high-paying job with a prestigious engineering firm. However, after years of feeling she was going nowhere, Samantha returned to Paradise and filled an opening for a sales rep at Sign Tempo. Once in the role, she quickly amassed the highest annual sales among her peers. The decision three years ago to make her vice president of sales seemed a risk, but in the time since, total sales had grown at an annual rate over 20%.

Both candidates had their good qualities and both had demonstrated shouldering an area of expertise … Just one mortal sin, though, and all of us at Sign Tempo knew it. Thomas and Samantha hated each other — unresolvably, it seemed and it dated back to childhood.

The election of one would surely spell the departure of the other. To us, the employees, Thomas and Samantha both represented the heart and soul of the company. The thought of one or the other leaving was anathema. But was it for them? Would one walk away from a comfortable salary, management bonuses, and most importantly, their family ties?
So … as the conference room discussion descended through seven circles of inferno, with shouts and fists pounded on the table, all of us waited and some prayed.

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The Big Questions

  • While it’s unfair to ask you, the reader, who should be elected president — given the limited information here — a fairer question seems to concern the process. How should the board decide?
  • Contested family successions are clearly difficult as they concern both family and business. Have you been part of something like this, and if so, what would you suggest?
Rocco G.
Pennsauken, NJ

Ah, family fun at work. I grew up in a family business and when it came time for my parents to retire, I was willing to buy them out but not with someone as my partner. You need to have a single person in charge. Running a business by committee just doesn’t work and I know from personal experience … The ship needs a captain but only one. Both sales and operations are vastly important to the continued success. Losing either would be difficult, but they are certainly not the only people on Earth that can fill those roles. The company has three options, two right there. If one leaves after the other is picked then the company will have to find a replacement for that person. Third option, pick a different person to be CEO. They have to be careful not to lose both cousins, but again, no one is irreplaceable. Make a choice and move on.

Christine A.
Texarkana, TX

As a board member, I would reject both candidates. The two candidates do not get along and it is clear that will pose problems in the future, which could prove to be detrimental to the company’s financial status. I would request to consider candidates outside of the company and keep both current candidates in their current positions.

Susan E.
Marion, NC

Split the company into two divisions. The two family members are president of their divisions. Hire a COO/CEO to oversee common interactions between divisions. This could be a part-time position. Make sure liaisons between branches are cooperative with each other and the family. Limit common social interactions as much as possible. It ain’t easy but beats breaking up a family.

Carol M.
Los Alamitos, CA

The board needs to look at other options. They both must be able to coexist as they have been. A company should never touch the sales if the growth is at 20%.

Cindy G.
Placerville, CA

If this has been a family business for many years, it seems like seniority in the family would dictate who moves up the ladder. As adults we, oftentimes, have to overlook our personal differences to see the “big” picture which is what’s good for Sign Tempo in the long run. If they are hell-bent on not getting along then maybe each has a liaison to deal with matters that they have to concern themselves with during business hours.

Mark M.
Appleton, WI

I have a real interest in this because I think I will be there in a few years. In this case and the times as they are right now, I would tend to side with Thomas for the simple fact that it is easier to replace a sales person than a fabricating person. Not saying that anyone can sell and get the same results but products can sell themselves sometimes. In my opinion it is easier to sell something than make it. So as a company, I would be willing to lose a salesperson instead of a fabricator. Another idea is [to] … bring in outside management to run the company, leave each person in [his and her] current fields of expertise but where they can reap the rewards of both doing their jobs efficiently.

Bill W.
Norton, OH

Samantha [should be elected president].

V.P.
Houston

Samantha understands financial goals better than anyone due to the role she has played in sales and her track record proves that. Leadership of a company requires creative and difficult financial decision making every day. Thomas is better at managing the day-to-day operations and that is where his talent lies and should stay. Everyone is replaceable, so if one chooses to leave a replacement will be found. The company will be fine either way. But if they both wanted to be fair, they should hire an outside person, with no history or family ties to the company, and let the outsider lead them to victory and everyone stays in the position they are currently in.

Dennis S.

Nevada City, CA

“I feel bad for the people who have to work with these two. IOAFS.”

Robert B.
Oakdale, CT

It isn’t a simple thing; however, the board as a whole has to make the decision and it must be accepted. It might be helpful to confront the two concerned and put it to them simply. Either you both accept the board’s decision, no matter who it is and find a way to get along or … #1: We will bring in an outsider to act as president. Non-voting … or #2: We will sell out and be done with arguments and family drama.

John P.
Skokie, IL

First of all, this board is derelict in its duties. Waiting until four months out to select a new president is unconscionable. They should have started at least two years ago and by now be working to integrate that individual into the president’s role. They also need outside directors to add balance to the family dynamics. This is a hot mess. The board needs to bring in outside advisers to work with them to identify the best path to take the company forward. It may not be one of the younger generation family members, at this point in time. The approach of “Make me president or I will walk” is a pretty good indicator that we are not dealing with mature individuals. An outside president for a few years should lead to better decision making and time to groom the proper heir to the throne. If you want to see how dysfunctional families work in the business world, watch HBO’s Succession.

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