Family businesses have long employed non-family members to help them run their businesses. But in recent years, this trend has increased as families seek the help of professional managers to guide their businesses as they have become bigger and more complex.
Of course, employing outsiders doesn’t always work. Just ask Stefan Messer of the eponymous German industrial gas company about professional managers, whose experience with a non-family CEO caused difficulties at the 100-year-old family business. But many families do work successfully with external managers and vice versa - and despite the occasional mishap, the trend is increasing.
In recognition of our Professional Managers Round Table, Family Capital has compiled a list of 10 outstanding non-family managers and why they work well with the families that have chosen them.
In alphabetical order
Per Arne Andersson, CEO of Kinnarps
Appointed chief executive in 2007, Andersson knows about the importance of loyalty - he’s been with the Swedish furniture company for more than 20 years. He has managed to balance the sometimes competing pressures of the family and daily needs of overseeing a €400m-plus business. As he told Family Capital in a recent interview: “In my view we have made a good combination of the two sides - the long-term view of the family, but also outside pressure and professionalism from the non-family appointments on the board.”
Peter Armitage, chairman of OCS
A defining ethos of many family businesses is the commitment to long-term decision-making. That commitment is often reflected in their staff, which are more likely to stay working longer for a family business than for a non-family business. Peter Armitage is a great example of that commitment, notching up 36 years with the UK-based facilities management company that is more than 100 years old. Armitage has worked exceptionally well with the family, but also presided over strong growth for a business, which today is one of the biggest privately-owned companies in the UK, with revenues close to £900m.
Raul Calfat, CEO of Votorantim Industrial
Calfat has been with the Brazilian family-owned conglomerate for more than 20 years, becoming CEO in 2011. In 2012, he was voted Latin America’s top CEO and has shown tremendous skill at working with the family as well as growing the business. He has also ensured that Vortorantim is one of the most committed companies in Latin America when it comes to sustainability.
John Dyer, CEO of Cox Enterprises
Dyer has been with the huge US privately owned media business since 1977, except for a brief period in the early 1990s. Again, that dedication to the business and working well with the eponymous family that control Cox has propelled Dyer up the management ranks to the top position.
Hartmut Jenner, CEO of Karcher
Jenner is a good example of the dedicated Mittelstand senior manager, having worked for the German manufacturer since 1991. He became CEO 10 years later and has presided over strong growth, with revenues today approaching €2bn. Jenner also presided over the establishment of the Alfred Karcher Foundation, which supports young scientists who carry out research in the area of cleaning technology.
Jorgen Vig Knudstorp, CEO of Lego (he has since been appointed as chairman of Lego)
Knudstorp is proof that outsiders with a management consultancy background can make excellent CEOs of family businesses. He joined Lego in 2001 from McKinsey and became Lego’s first non-family CEO. Knudstorp turned the loss making business into the highly profitable company Lego is today.
Oh-Hyun Kwon, CEO of Samsung Electronics
Kwon was appointed CEO of Samsung Electronics in 2012 after a 27-year career at the family-controlled South Korean conglomerate. Not only does Kwon have one of the most challenging jobs in the tech industry - Samsung competes head-on with Apple and the other American tech giants - but he also has to deal with one of Asia’s most powerful families, the Lees. So far, he has done a pretty good job at both tasks.
Sergio Marchionne, CEO of Fiat Chrysler Automobiles and chairman of Ferrari
The Italian-Canadian is credited with the revival of the family-owned Fiat since he joined the business in 2003. He has a strong bond with John Elkann, the chairman of Fiat and the main family member involved in the running of the car company. A hugely talented manager, which is combined with his often informal approach to business, exemplified by never wearing a business suit.
Patrick Thomas, former CEO of Hermes
Few managers know family businesses better than Thomas. He may be best known for being CEO of French luxury brand Hermes, smoothing the way for next generation family head Axel Dumas to take over the business, but the whole of his extraordinary career was spent in family-owned firms. These have including Pernod Ricard (of which he became CFO aged just 33), German cosmetics brand Lancaster and British spirits company William Grant & Sons.
Martin Winterkorn, chairman of the board of management of Volkswagen
Winterkorn knows a few things about working with big family businesses, having starting his career at Robert Bosch before joining Volkswagen (Audi) in 1981. He has been a leading figure in achieving VW’s leadership in the global car industry. At the same time, has been a very important confidant to Ferdinand Piech, the main representative at VW of the Porsche-Piech family that controls the car company.