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Expectations of Management Choosing the right CEO from the cousin consortium.

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Presentation on theme: "Expectations of Management Choosing the right CEO from the cousin consortium."— Presentation transcript:

1 Expectations of Management Choosing the right CEO from the cousin consortium

2 Agenda/Introduction n Background-Tobin Brothers & key Players n Outline a story that’s worked n Management, not equity succession n Detail the distinct phases of our Plan n Reasons for its success n Expectations Analysis

3 Tobin Brothers Funerals n Largest family owned Funeral Co. in Australia n Founded in 1934 by my grandfather and his three brothers; n Currently 13 active family members n Turnover of $22+ million n 130 Staff, across 19 locations n 4500 funerals annually (1 in 5 Melbournians) n FBA’s 3rd Generation Family Business of the Year Award (1999 & 2004)

4 Martin Tobin n 3 rd generation MD (since late 1998) n Arts/Law at Monash n Solicitor for four years n MBA at Melbourne Business School n FBA’s Victorian Chapter Committee

5 The Tobin Family

6 Road blocks to Succession Planning n Reluctance of incumbents to let go n Difficulty selecting one family member over another n Incumbent has nothing to do in retirement n Concern that his/her successor will fail n Fear that his/her successor will do better

7 1st to 2nd Generation (late 1970s) n Kevin Tobin, conservative, prudent founder n Des Tobin, restless, innovative nephew n Second eldest of 4 second generation cousins n Des evolved as natural successor n Broad support of his three cousins n Long wait; Kevin retired in 1981 at age 71

8 2nd to 3rd Generation (early 1990s) n TB far bigger and more complex n Funeral industry more competitive n Several non-family senior managers had emerged n Eight 2nd and 3rd generation Tobins in the business n No natural family successor within business

9 Phase 1-Recognising the Need 1992/93 n Des, at 55, at peak of working life n Conscious of his mortality n Saw company needed new blood n First hand experience as a successor n Had a life outside of work n Importance of enlightened incumbent

10 Phase 2-Building the Framework 1993 n Family & Board agreed to role criteria n Agreed to go outside company if necessary n “Cousins” assessed against agreed criteria (plenty of self assessment) n Potential external “cousins” assessed (from which I emerged) n Management team and family consulted n Decision communicated to staff from outset

11 Agreed Role Criteria n Business related tertiary qualifications n Strong communication skills n Time management skills n Natural Leadership qualities n Ability to handle stress n Ideally, some experience outside the business n Preparedness to embrace IT

12 Phase 3-Leadership Development n Detailed program written with my input n Escape mechanism created n Exposure to all areas of business; service delivery, administration, sales/marketing, staff training etc n Further training; MBA at Melbourne Business School ( ) n Formal management responsibility

13 Phase 4-Changeover Nov 1998 n By late 1998, we were ready n Des had just turned 60; I’d just turned 33 n Decision communicated to staff and externally (advisers, business media etc) n Handover function (not a retirement roast) n Occupied MD’s office and employed new PA n Des relocated to another branch

14 Phase 5-Transition n Des stayed on as Executive Chairman n Clear demarcation of duties established n A real job; specific projects, adviser, consultant, mentor, devil’s advocate n Other involvements; FBA, Golf, writing n Monthly quality time meetings

15 Post Mortem n Far from smooth sailing, but it worked n Des ultimately sold equity too n “Cousins” supportive of my leadership n Company still performing strongly n Model for other internal applications (ACC) n Vehicle to join the Speaker’s circuit

16 Reasons for success n Treated succession as a process, not an event n Enlightened incumbent leader n Started thinking about it well in advance n Established objective criteria n Found someone who met them, rather than the nearest “fit” n Communicated plan to all stakeholders n Treated process as investment not a cost

17 Reasons for success (continued) n Focused on successor’s development needs, and treated them as an investment, not a cost n Built in processes for retiring leader to support, advise and mentor the successor n Provided successor scope to develop own leadership style n Created a meaningful ongoing role for the retiring leader

18 Expectations of Players Inherent Tensions n Incumbent n Successor n “Cousins” n Staff n Advisers

19 Expectations of the Incumbent I’m out of here (sort of) n Retain a meaningful role (for a while) n Freedom to step back n Maintain a reasonable income n Contribution recognised n Strategy & Legacy respected n Experience utilised

20 Expectations of the Successor Be gentle with me n Actual, not notional leadership n Scope to build own management team n Scope to use own advisers n Given a reasonable honeymoon period n Ongoing appraisal/recognition n Return to father/son relationship

21 Expectations of the “Cousins” We’re with you, provided…. n Our role & contribution is recognised n We’re kept informed and have a say n Our investment is well managed n We progress and develop too

22 Expectations of Staff So what’s Changed? n Cultural lag n Sceptical about prospect of change n Slow to embrace change n Reluctance to acknowledge change n But change happens (whether they admit it or not)

23 Expectations of Advisers Business as Usual n Assumption of continuity n Treat successor as a new client n Re-articulate value proposition n Change of personnel?

24 I’m not afraid of death; I just don’t want to be there when it happens Woody Allen


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