Or it may be the beginning of another conflict—and one that could have been avoided had the Hoiles family delineated clear lines of succession and paths to liquidity early on. Unlike families, private equity firms like Blackstone do not have multigenerational time horizons. And in a few years, R.C. Hoiles’ descendants may find themselves again confronting restive minority shareholders who want to cash out of an illiquid investment.
Motorola’s Dropped Call
"What is important is the long term," Christopher Galvin, the third-generation CEO of Motorola, told the Wall Street Journal in 1998. In 2028, when
Motorola would celebrate its 100-year anniversary, he would be "standing on the podium, God willing."
Last fall, Galvin resigned, 25 years short of the century mark. Particularly in the technology field, companies are now often compelled in the name of competition to abandon even profitable businesses to create disruptive next-tier innovations before somebody else beats them to it. The necessary originality of thought and rigor of execution to accomplish this is rare enough to find in one generation, much less two—a reality that explains why so few technology companies remain under family control. IBM survived two generations of family management, while Corning is currently prospering under its founding family’s fifth generation. Corning is an unusual exception; Motorola, under its third generation of family direction, as it happens, is not.
Unlike many other family companies that have sold shares to the public, Motorola did not maintain voting stock or special shares for family members. For the past 60 years, the Galvins were always willing to be judged on their performance. In today’s climate, however, the window to prove oneself has narrowed considerably—no matter whose DNA one carries.
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