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| Succession & Failure |
Failed 100 Year Plans
Daniel Gross
01/01/2004
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Under Chris’ management, Motorola missed out on opportunities in areas that seemed related to its core competencies: wireless e-mail, wi-fi, flat-panel televisions and satellite radio. Worse still, once Robert Galvin retired from the company’s board in the spring of 2001, Chris remained as the only family member on the inside. His brother and two sisters had elected not to join the company. The Galvins today own about 3 percent of the company’s stock—not nearly enough to exert effective control. In the end, the Galvin family failed because the enterprise—and the market and industries in which it competed—had grown so complicated that it was probably beyond the capabilities of any group of family members—let alone a single one—to master. Steering the corporate ship through these shoals required a captain who was both a gambler and a visionary. These skills cannot, alas, be taught at the Harvard Business School, nor can they always be conveniently passed down from one generation to the next.
Decline of the House of Morgan
When J.P. Morgan died, the
Wall Street Journal declared: "There will be no successor to Morgan." But,
of course, there was. In fact, three
generations of Morgans have been involved in banking since the death of the man who, a hundred years ago, bestrode the world of finance like a colossus. But while the name lives on, the family’s influence has faded.
What happened? Regulation, spurred in part by the firm’s success, changed the bank’s business model. And in later years, even as circumstances required greater preparation, the patriarchs neglected to mentor the succeeding generation by inculcating an ethic of management and hard work. As a result, the bank—in its treatment of the family that created it—ultimately reciprocated the indifference they had shown the institution.
The first great Morgan banker was not the titanic J.P., but his father, Junius Spencer Morgan, who set up shop in London in the 1850s. He assiduously groomed his son, John Pierpont, born in 1837, to join him, just as the Rothschilds prepared their male progeny. Junius helped establish J.P. in business in New York, and they worked together closely until Junius’s death in 1890.
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