PJ Neal

Thoughts from a more-than-occasional writer

Leading a Legacy: How Outsiders Thrive as Family Business CEOs [Russell Reynolds Associates]

When Guy Laurence lost his job as CEO of Rogers Communications in October 2016, it quickly became the subject of newspaper headlines and evening news reports. Hired in December 2013 to run the family-owned Canadian business, Laurence was a successful, experienced executive. Previously the CEO of Vodafone UK, he came to Rogers with seemingly all the skills, background, and abilities necessary to thrive – yet he lasted less than three years.

Reports after the fact suggest that while Laurence understood how to run a large telecommunications company, he failed to understand the unique challenges that come with being an executive in a family-owned enterprise. Though larger-than-life founder Ted Rogers passed away in 2008, his son Edward leads the Rogers Control Trust, which owns 91 percent of the voting shares in the company. While the younger Rogers “had no official operating role in the company, [he] still wielded undeniable influence,” according to media reports. In a May 2017 profile in The Globe and Mail, several individuals inside Rogers Communications argued that Laurence “lost his job not because he failed to deliver, but because he blithely ignored the advice just about anyone at the company will give you for free: Never forget whose name is on the building.”

All CEOs face challenges, but as Guy Laurence’s story shows, outside leaders of family-owned businesses often find themselves in especially difficult circumstances as they strive to balance family dynamics with the needs of the business. While most public companies take a quarterly approach to results, for example, family-owned businesses are more likely to be looking out forty years. Where public companies can to some extent pick and choose the shareholder issues they address, family-owned businesses are often uniformly beholden to a broad and diverse set of relatives. Some executives quickly fail under these circumstances, while others thrive.

Read the full paper, co-authored with Beatrice Ballini, Shawn Cooper, Pedro Goenaga, Rusty O’Kelley, and Dean Stamoulis, and published by Russell Reynolds Associates.