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The Regeneration Of A Company’s Leadership Can’t Be Done Recklessly

“In Family business, The first generation found the company and has the drive and the dedication to move it forward. The second-generation rides the wave. It’s the third generation that presents big problems. Usually, people of the third generation want to lead the company with their own methods and rules. They’ve seen Broadway; they possess all the benefits” (Gale Petronis). Regeneration in family companies has more severe challenges compared to public companies. In public companies, the choice for leadership regeneration is broader, it can be chosen from internal or external. However in the family company, the children of the founder are the first choice (mandatory), so the founder has a challenge in educating his next generation to hold the baton of leadership. Meanwhile, the same thing might not happen with Camargo Correa, due there are no rumors that indicate that Mr. Hallack can inherit his position to his family members or relatives.

Several years ago I was invited to discuss with a senior businessman about the survival of the company in the hands of the next generation. We discuss the differences in age conditions that he encounters between companies in Japan and companies in other countries.

According to him, companies in Japan, in general, have a long life until the hands of several generations of successors, while in developing countries, generally only survive in the hands of the second generation, after that many experienced a fall in the hands of the next generation.

In Japan, before the next generation is given the company leadership baton, it is first formed from the ground up as a staff, transferred from one department to another, then promoted from Supervisors, Managers, GMs to Directors, and then the President Director.

Meanwhile, according to his observations, in developing countries, parents of business owners do not carry out regeneration of the next generation from below.

Many after their children come home from study abroad, immediately placed as a Director and even the President Director. As a result, due to a lack of understanding of the company’s operations, coupled with the spirit of bringing knowledge learned from abroad, the resulting policies are often inappropriate or not suitable for the conditions in the parent company.


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