The Illusion of Invincibility. Paul Williams
proven that I can do the job at least as well as all those people from the financial sector or the managing directors from other publishing houses.”
A dispute over business strategy between father and son—not least about how to tackle the challenges of digitization—broke out and was further aggravated by an interview Konstantin Neven DuMont gave to the Bild newspaper. Bild was the biggest competitor of the family’s tabloid newspaper, Express, and the interview had not been discussed with the other members of senior management, who could hardly have been happy about it. There were consequences as Bild, quite naturally, took full advantage of the situation.
In November 2010, Alfred Neven DuMont relieved his son of all duties in the business. At the end of 2012, Konstantin Neven DuMont transferred his shares back to his parents and, between 2013 and 2017, he was bought out of the business.
The family learned from its mistakes. The family representatives, Christian DuMont Schütte and Isabella Neven DuMont, now exercise control at supervisory board level, while an external manager runs the operating businesses.
If you find yourself shaking your head in a combination of amusement and disbelief, you might want to think about that just for a moment. Let’s face it: Even in “normal” families, arguments erupt and emotions can often run high on straightforward day-to-day issues. So how much more difficult must it be to find agreement between parents, siblings, cousins, and more distant relatives on matters of business strategy, division of responsibilities, and the distribution of considerable wealth? The heiress to a large family dynasty described the challenge very aptly as follows: “We have to somehow combine this highly subjective environment with the real-life numbers and facts to come up with sensible enterprise decisions.”
Anyone who can maintain composure as they navigate this emotional minefield commands our respect. It is one of the most deep-rooted of human instincts for parents to view their children through rose-tinted glasses. Equally human is the all-too-critical attitude of many patriarchs, whose fear of the loss of power and status prevents a timely handover to a younger successor, or the belief of many founders in their own invincibility, which can completely suffocate the next generation. And all of this is taking place in an increasingly fast-moving and global era which is crying out, louder than ever before, for smart leadership.
“In the twenty-first century it will be far less about simply handing down material assets and far more about passing on the entrepreneurial mentality and aptitude to the next generation,” says Peter May, one of Europe’s leading experts on family businesses.
The Incas also lived in an era of change, constantly faced with new challenges. And they would have been equally familiar with power battles, jealousy, envy, and family feuds, all of which makes their disciplined approach to leadership development even more admirable—an approach which limited personal preference through compulsory training followed by testing and assessment in front of a central board. Indeed, it is noteworthy and indicative that their eventual downfall was accelerated, at least in part, by a departure from this disciplined approach, leading to a less than clear succession policy and a subsequent weakening of the Inca Empire (see Chapter 5, “Tackling the Real Opponent”). But it is not only family businesses that make mistakes when recruiting their senior managers. Christine Wolff, an experienced business manager and non-executive member of a number of boards, considers “wrong personnel decisions” to be the most serious mistakes she has made in her career to date and identifies the most common pitfalls.
From Christine Wolff, multiple board member:
There are four typical mistakes made in the area of personnel management, all of which I have made myself:
1. Hanging on to average or bad managers for too long
2. Promoting the wrong people, either because you are under time pressure or because you are not focusing on their actual qualifications
3. Giving the job to the person who screams loudest, just to reduce the pressure at that moment
4. Promoting or transferring someone to another department to get them out of the way
And what have I learned from this? If possible, try to avoid time pressure, because under stress everyone makes mistakes. You should be well-structured in your approach, take time to look closely at the qualifications of each candidate, and it is never too soon to start actively developing talented people, something that is often overlooked.
We wonder if you have ever made one (or more) of these mistakes. We certainly have. One thing is certain: If the real cost (in dollars and cents) of poor personnel decisions were included in budgets in the same way as investment in technology or marketing, then recruitment and selection methods would look very different. Let’s do the mental arithmetic for a moment and add together annual salary, bonus, and employer’s Social Security contributions, costs for advertising the position, headhunter and search fees, and the salaries and time of internal people involved in the selection process, not to mention the time required to ensure a professional onboarding for the new recruit once they’ve agreed to start. Even for relatively junior positions, you will quickly be up to a six-figure sum and can triple that in the case of making a poor appointment, not only because the whole process has to start again from scratch, but also because the wrong person in the wrong place can have serious financial impact due to, among other things, lost orders, lost revenue, compliance issues, and resignations from frustrated colleagues. The latter effect refers to the situation when the inappropriate new recruit has people reporting to them, as it is well-known that people join companies but leave incompetent bosses. We have no doubt that, if there were more widespread and robust financial scrutiny of HR processes such as these, the temptation to make off-the-cuff decisions or follow the path of least resistance in matters of recruitment or career development would virtually disappear.
A successful business that wants to stay that way is well advised to take great care in the way it goes about recruitment and selection. However, the reality is often very different. In his talks, Andreas Krebs particularly enjoys the moment when he invites his listeners to take part in a short exercise. “Think of your ten most important key people. Imagine you could recruit them again from scratch. Who would you keep?” Immediately, you can see on the faces of the assembled managers the mental screening process, as they think through the names in their departments. “Her? Yes, immediately! And him? Not in a million years!” Within just a couple of minutes, at least in their heads, most departments have shrunk dramatically. On one occasion, a clearly frustrated manager answered the question by loudly shouting out “None of them!” Most would retain no more than half of their colleagues, and the remainder would not be rehired. So, what does this actually mean? Are we working with people, in our team, in whom we don’t really have any confidence? And we are not talking about serious weaknesses which could justify sacking people, but just the everyday frustration of team members delivering average, ordinary, unexciting work. But whose fault is this ultimately? The employees themselves? Or perhaps those who recruit carelessly and surround themselves with the mediocre, only to then complain about their lack of inspiration and good ideas?
And, just in case you are thinking, “Well, I had no choice” because you inherited your team, ask yourself this: What’s your plan to shift these colleagues from a “perhaps keep” to a “solid yes”? And then from a “solid yes” to an “absolutely must retain”?
Dilettantism, Disinterest, and Delegation
This apparently simple exercise (“Which of my colleagues would I hire again?”) is an acid test for any leader. Anyone who would prefer to see most of their team move on should ask themselves why they were hired in the first place or why they have allowed them to carry on working without doing something about it. How did it come to this? Where were mistakes made? Managers who have been in their companies or roles or business sectors for a long time frequently swear by their intuition, their “gut feeling,” when it comes to candidate assessment. Now, we don’t want to dismiss or devalue the importance of life experience or the insight into human nature gained through many years in the workplace. The question is whether you can consistently rely on this intuition in the heat of the moment, whether this intuition is equally relevant