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June 2008 Archive for Leave a Legacy

RSS By: Kevin Spafford, Legacy Project

Kevin Spafford is Farm Journal’s succession planning expert for the Farm Journal Legacy Project.  He hosts the nationally-televised ‘Leave a Legacy’ TV, facilitates an ongoing series of workshops for farm families across the U.S., and is the author of Legacy by Design: Succession Planning for Agribusiness Owners.

Is There a Solution?

Jun 28, 2008

Final Segment: Behind the Scenes with a Notable Agribusiness Family 

When an industry giant fails to achieve a lifelong objective, the earth shudders.  Great institutions don’t happen by accident; they are the result of a burning desire to achieve, a big vision, careful planning, tireless execution, agility and poise.  Each trade is founded on the backs of visionary capitalists intent on changing the day’s accepted norms.  To these entrepreneurs, goals are expectations to be met - results to be achieved.

Establishing world changing goals, creating the roadmap to success, assembling the tools of accomplishment and diligently working to achieve is the ‘modus operandi’ of today’s entrepreneur.  I have distilled five thoughts that summarize the lessons from The House of Mondavi by Julia Flynn Siler:

1) As I read the book, I continually asked, “What’s his objective?”  Was Robert Mondavi in business to make money?  Did he want to create a business with high equity value?  Was his goal personal satisfaction, and a sense of accomplishment?

2) Is dissension a hereditary trait?  Couldn’t the ‘lessons’ from Cesare and the indiscriminate discipline from Rosa serve as a vital lesson of behaviors to avoid?

3) Did Mondavi leave a legacy?  Without hesitation, the answer is - absolutely!  He and Margrit left $35 million to U.C. Davis, funded the restoration of the Napa Valley Opera House and helped to establish Copia - The American Center for Wine, Food and the Arts.  All serve as noteworthy and admirable, but he failed to achieve his greatest desire - a family business legacy.

4) Each of us is endowed with strengths and challenged by weakness.  Robert Mondavi used the strength of his vision, the power of leadership and undaunted efforts to create a life style of fine American wines and elegant foods.  Without Robert Mondavi, we may have an industry steeped in inexpensive jug wine and sacramental spirits.

5) In the end, the strengths of his character - ego, drive, desire, and vision - may have been the weakness of his personality.  He was truly a great visionary.  He supported the vision with tireless execution, but he didn’t (or couldn’t) step aside and let those he loved fulfill his fond desire.  The Mondavi family is merely a bit player in the continuing story of this venerable institution.

If business is a commercial expression of self, as I think it is, the Robert Mondavi Winery became a material representation of its founder.  But creating a business that is bigger than self, provides an excellent standard of living and endows a family for generations, is not achieved through normal means and casually accepted business methods.

A comprehensive succession plan may provide a clear sense of purpose and the pathway to achieve multigenerational success.  A complete plan will detail solutions to the challenges facing the operation and will mitigate the three leading causes of failure:

1) Inadequate estate planning
2) Insufficient capitalization
3) Failure to prepare the next generation

A succession plan is built on the following four elements: >>

Countless Opportunities, Ten Tries and Zero Results

Jun 18, 2008

Part V of Behind the Scenes with a Notable Agribusiness Family

An excuse doesn’t substantiate failure; it only appeases the moment, absolves culpability and allows for repeats.  Failure is a lack of intended results.  The function of failure is to instruct and to impose, or suggest, a do-over.  One constant throughout Robert Mondavi’s adult life, and a major motivator behind his outstanding accomplishment, was the desire to create a business that would endow his family for generations to come.

From the days at Charles Krug working with his father and siblings, Robert was determined to build a legacy for the generations.  But, as we know now, that endeavor ended in his ouster.  As he founded the Robert Mondavi Winery, he was intent on family involvement and he positioned his children and the operation as a multigenerational operation.  Robert Mondavi was focused on:

     -  Creating opportunities for each child
     -  Engaging formal and informal mentors in the leadership development process
     -  Exploiting each child’s respective interests / strengths in the winery operation

Michael, Robert’s oldest son, resolved to build a family dynasty.  He joined the Young Presidents’ Organization, promoted involvement in Primum Familiae Vini and hired outside counselors to encourage succession.  He oversaw the implementation of a pre-nuptial agreement for Robert and Margrit Biever [Mondavi] to ensure continued family ownership of the winery in case of divorce or separation.

The Mondavi family had the motivation; possessed the money; had access to the very brightest advisors; devoted hours and hours with internal and external experts; observed the lessons from some of Europe’s great wine dynasties; conspired with business consultants; and repeatedly vowed not to imitate Rosa’s (Robert and Peter’s mother) vindictive disciplinary patterns.

But in the end they failed.  Below I’ve highlighted ten separate attempts, from Julia Flynn Siler’s The House of Mondavi, to initiate a succession plan for the Robert Mondavi Winery.  No doubt there were many, many more.  Succession is the application of a series of interconnected and separate events that constitute a process of transitioning the operation from a limited-life sole proprietorship, to a long-term endeavor with shared roles and responsibilities within a family - the intent is the creation of multigenerational success. >>

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