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Spreadsheet to accompany product W33460.

Boards of directors have important responsibilities in the context of top management succession processes. However, their role has not been sufficiently studied in the setting of family-controlled firms. Meanwhile, family executives often play a major role in the performance of family firms. In fact, replacing those family managers has important implications and needs to be treated as a priority by boards of directors. In this industry note, we explore the unique challenges that succession processes pose for the boards of family firms. We conclude that boards of directors should be particularly conscious of the need for planning, coordinating, and overseeing succession processes to meet both the business challenges and the controlling family’s expectations.

In late 2020, Lynn Wilson, a social entrepreneur and chief executive officer of SparqU, Inc., gave himself one year to turn his company around. SparqU, which offered digital literacy training to underserved and underrepresented communities, had been funded by a workforce grant. But when the grant expired, Wilson left his academic teaching position to focus full-time on SparqU and fulfill his passion for helping Colorado’s people of colour, low income, and underserved to become digitally literate and improve their job opportunities. Wilson was all in. But he wondered, would his current promotional strategy targeted towards those needing to build digital literacy skills eventually be profitable ? Or should he consider other segments?

In 2021, the investment bank Credit Suisse Group AG lost an estimated US$6.4 billion from exposure to two hedge fund implosions that occurred within a month. Archegos Capital Management lost US$4.7 billion and Greensill Capital lost US$1.7 billion. Various arrangements between Credit Suisse Group AG and Archegos Capital Management, as well as structural factors at Credit Suisse Group AG, may have contributed to the bank having a higher level of exposure to these collapses than its industry peers. Underlying these miscues were recent changes in leadership, strategy, and tone at Credit Suisse Group AG. All three of these changes appeared to have collectively impaired the skepticism and voice exercised by its risk management group. In July 2021, Credit Suisse Group AG replaced its chief risk officer in an attempt to reshuffle its risk and compliance leadership. The task of the new chief risk officer was to reshape Credit Suisse Group AG’s risk management framework and internal controls, from the top to the bottom.

During an Allianz Benelux SA (Allianz) board meeting held in early 2019, Allianz’s chief financier officer (CFO) had a profound discussion with Allianz’s chief data and analytics officer (CDAO) on improving the company’s profit and loss (P&L) statement by targeting problematic cases among disability claims related to Allianz’s life insurance product. It appeared that certain claims had very long durations, leading to recurrent payouts surpassing the total amount of premiums. Consequently, there were too many claims that could translate into future losses. If this phenomenon persisted, Allianz could lose millions of dollars in revenues. Therefore, the CFO contacted the CDAO and his data office and requested that the team identify the client segments in which the most problematic cases of disability claims occurred. Additionally, the CFO wanted the data office to build a predictive model that could estimate the duration of a claim, to adapt the premium coverage to specific customer segments.

Spreadsheet to accompany product W27373.

Although Mary Barra, chief executive officer (CEO) of General Motors Company (GM), had faced her fair share of challenges while leading GM, Tesla Inc. (Tesla) posed a tougher competitive challenge than anything that had come before. Despite groundbreaking progress with electric vehicles (EVs), autonomous driving, and sustainable development, GM was now living in the shadow of Tesla, which, to some extent, had leapfrogged industry incumbents to become the most valuable car manufacturer in the United States. Further, major EV developments from old rivals from Detroit, Europe, and Asia, as well as blooming EV start-ups—some backed by technology giants—only compounded Barra’s worries. GM had achieved significant success in adapting to the coming age of EVs, but it also faced a number of questions: Was GM’s current strategy sufficient to sustain the company’s success? What technologies, capabilities, or products would be needed for GM to thrive in the new era of global mobility?

Runza National, Inc. (Runza), an iconic Nebraskan quick-service restaurant chain had saturated its home Nebraskan market, with eighty-two stores across the state. A proud, family-run business, the Nebraskan chain was named after a mouth-watering regional specialty: the Runza sandwich. Also known as a bierock, this savoury bread pocket of Russian and German origins was adapted from a family recipe into the flagship offering. To foster further growth, the Runza team sought to expand the chain across the Midwest and beyond, through options such as company-owned stores, franchising, and ghost kitchens. Equally crucial were the areas in which to expand, with possible markets in nearby Wyoming, Montana, Colorado, North and South Dakota, Minnesota, Kansas, Iowa, and Missouri. Canadian communities also presented opportunities for international expansion. In determining the optimal markets and modes of entry, the company had to consider the effect of local factors on the company’s appeal. Its Nebraskan roots had made it a local icon with a devoted customer base, but the next steps beyond its home state would shape its future. Which states of the United States should they expand into, and was Canadian expansion viable? What market types—larger cities or smaller towns—were the most desirable, and which mode of entry was most feasible?

In the fall of 2019, “flight shaming,” a growing environmental movement, was gaining speed. The movement, which was sparked in Sweden and popularized by Greta Thunberg the previous year, sought to express the “unease about flying experienced by environmentally conscious travellers.” As a short-haul airline, EasyJet plc (EasyJet) needed to determine whether this was merely a passing fad that it could ignore or a threat that might damage its reputation and growth ambitions for the future. In the latter case, EasyJet would also need to determine what it should do to mitigate such risks.

In May 2022, Shopee Pte. Ltd. (Shopee), the e-commerce division of Singapore-based Sea Limited (Sea), was at a critical juncture. Over the past several years, fuelled by the growth of its e-commerce business, Shopee had achieved rapid revenue growth. Starting from Singapore and Southeast Asia, the company had expanded its international footprint to countries in Europe, the Indian subcontinent, and Latin America. But early 2022 brought several new challenges for Shopee: Sea’s stock price plummeted as investors sold off high-growth and unprofitable Internet stocks; and Shopee exited France and India rapidly because it was facing pressure from multiple sources, including an industry association in India and the Indian government, which had banned sales of Shopee’s best-selling game in India. Shopee had to carefully choose an appropriate strategy for further international expansion. Should it pause its international expansion and consolidate in the short term or carry on with the rapid pace of expansion?

Marlow is a new menstrual health company that developed the first-ever lubricated tampon for smoother and more comfortable insertion and which aimed to deliver the product through a direct-to-consumer subscription model. During its first year in business, the team of female founders focused on product development, including completing the research and testing required to secure regulatory approval from Health Canada and the US Food and Drug Administration. After successfully raising $500,000 in an angel pre-seed fundraising round, the team was ready to bring its innovative product to market. In preparation for the launch, Marlow needed a comprehensive marketing plan that identified the consumers who would benefit most from the product and who would be willing to purchase it. Key messages and a communications plan had to be finalized highlighting Marlow’s differentiated advantage, and the financial estimate for the first year had be forecast and presented to investors.

Following the Arab Spring of 2011, the centuries-old co-operative movement helped the emancipation and financial independence of women in Morocco. One such woman was Samira Smahri, the founder and president of a co-operative called Attadamoun, which nationally and internationally marketed a unique product native to Morocco now used around the world: argan oil and its derivative products. The co-op, founded in 2014 and located in Sidi Bibi, a small village in Morocco, had experienced steady growth and given women a sense of hope and new-found freedom. However, this was all put on hold with the onset of the COVID-19 pandemic. Accordingly, Smahri had to decide whether to persevere under extremely unfavourable conditions or to shut down the co-op that meant so much to her and the co-op’s emancipated women employees.

Sheree Evans and Danielle McFarland had spent five years trying to build and launch business management software for the health and wellness industry. After an attempt with Mystro, an online payment gateway, they pivoted to create a new business, Therapair, a multi-sided platform. They had enough funds left for just over three months of operations and needed to decide whether they should continue to invest in their businesses or walk away from them.

Kinbor, a pioneer and top brand of creative planner journals in China, was launched in 2015 by Guangbo Group (Guangbo), a leading stationery manufacturer and worldwide exporter. In January 2022, Jessie Yu—Kinbor’s, founder and general manager— was facing several urgent issues in moving the start-up forward. Like many intrapreneurial projects, Kinbor was only contributing a small fraction to Guangbo’s total annual revenues, so pressure to boost sales and scale up the operation was mounting. In addition, Kinbor’s incongruence with the parent company’s business model was making integration a challenge. Externally, major stationery industry competitors were launching their own creative planner journal brands, thereby intensifying the market’s competition. Kinbor had to find the right strategy to address these issues.

The Procter & Gamble Company (P&G) was named a top ten plastic polluter by the Break Free from Plastics coalition in 2019. P&G faced backlash over the plastic waste associated with the distribution of consumer goods in single-use sachets. While sachets provided access to everyday household necessities to low-income individuals, they also created negative environmental externalities. The company had to decide how to tackle the problem of waste they were responsible for and, at the same time, deflect accusations of greenwashing. How could this environmental issue be solved without raising prices for low-income individuals? What did P&G’s key stakeholders expect? How could P&G achieve the “triple bottom line” by caring for profits, people, and the planet?

On June 5, 2021, an eleven-story building developed by the BROAD Group was completed in Changsha, China, in just 28 hours and 45 minutes. This building, known as the Holon Building, had the advantages of a long lifespan, short construction period, strong earthquake and typhoon resistance, low cost, high comfort and energy savings, and global transportability. Because of its standardized installation and 100 per cent factory prefabrication of all modules, Holon was well suited to various types of buildings. However, as a newly emerging technology, the Holon Building needed time and great effort to gain wide acceptance. BROAD's chairman and chief executive officer, Zhang Yue, was wondering about the feasibility of Holon buildings’ global market expansion.

In April 2022, the chief executive officer (CEO) of Agilus Work Solutions (Agilus) was considering how to handle the future of work at the company. With the company’s employees having worked primarily remotely since the beginning of the COVID-19 pandemic in March 2020, he wondered if now was the time to bring them back to the office. If so, would employees return to the office full-time, or was a hybrid model preferable? With employees having conflicting viewpoints on the issue, the CEO knew that whatever option was chosen would need strong justification and to be skilfully communicated to Agilus’s employees from coast to coast.

On March 5, 2022, Ronni Kahn sat at her desk in Sydney, Australia, reflecting on what she was going to share at an international conference on leadership. Kahn was the founder and chief executive officer of the food rescue organization OzHarvest, a charity with the goal to nourish Australia through redistributing food and food waste to those in need. Kahn’s work involved a combination of running OzHarvest and being an international ambassador for and keynote speaker on sustainable food practices and living with purpose and meaning. As Kahn reflected on the work that had been done over the last eighteen years, what were the leadership lessons she had learned that she could share with others?

In early 2021, Kent Fawcett was a food entrepreneur facing typical questions around scaling his enterprise, Local Pulse. Driven by a personal passion for food as a means to heal both people and the planet, he developed a line of shelf-stable plant-based foods, including breakfast cereals and dehydrated hummus. Since 2018, he had been offering his products online and at the local farmers’ market in Kamloops, British Columbia. He started selling Local Pulse goods wholesale and was beginning to understand the scale at which he would have to produce the goods in order for his business to be financially sustainable. Fawcett was not sure if he was ready to take the financial risk of investing in new facilities to grow the business.

Luigi Lavazza SpA (Lavazza) was the largest coffee maker in Italy and the seventh-largest coffee roaster in the world. Despite its success in global markets, Lavazza was finding it difficult to make its mark in the United States. After establishing its North American subsidiary in 1989, Lavazza entered the US market in the 1990s with strategic partnerships with restaurants and hotels to cater to US consumers. But even as a strong global brand with thirty years of experience in the US market, Lavazza continued to struggle. As competition in the global coffee industry intensified, Lavazza could no longer afford to be complacent with its performance in the US markets, and it sought to increase its market share. However, Lavazza faced a key strategic decision: should it try to introduce US consumers to the “Italian way” of drinking espresso coffee, or should it create a new brand identity and a new portfolio of products that were more aligned with the tastes of US consumers?