A new CEO is emerging - as Lego’s latest big hire shows

Niels Christiansen, the new CEO of Lego - and a new type of CEO?        Photo: Lego

Niels Christiansen, the new CEO of Lego - and a new type of CEO?        Photo: Lego

Want to be a CEO? Then it might be a good idea to gain some experience at a family-controlled business. That’s what Niels Christiansen did and he’s just been appointed as the new CEO of Lego, one of the world’s most famous companies.

Christiansen spent nine years as the boss at another Danish multinational called Danfoss. Both Danfoss and Lego haven’t just got being Danish in common, both are also family controlled. And that’s likely to be an important reason why Christiansen got the top job at Lego - he’s worked in senior roles at a family business beforehand. Of course, Lego didn’t say that when it announced his hire last week, but Christiansen’s background at another family business probably didn’t go unnoticed by the toy maker.

As fellow Dane and INSEAD family business professor Morten Bennedsen says, Christiansen’s family business experience was a factor in his appointment at Lego. “Christiansen’s only 51 and with the most amazing CV you can find in Denmark,” says Bennedsen. No doubt, part of that “amazing” bit is having a family business experience.

As the role of family enterprises continues to grow in the world economy, having a senior role at these businesses is shaping a new type of CEO - those that have a proven track record of working with family owners.

Patrick Thomas, the retired ex-head of the French luxury goods maker Hermès would no doubt agree that a new type of CEO is emerging - those with family business backgrounds. Little wonder, to date, he’s perhaps been the ultimate non-family CEO of family enterprises. Thomas worked for three prominent ones, included sixth generation family owned Hermès, and two family-owned drinks groups, the Scottish-based William Grant & Sons, and France’s Pernod Ricard.

By all accounts, Thomas did a pretty good job at all three of them, but his finest hour probably happened when he was at the helm of Hermès. When there in the mid-2000s, Thomas led Hermès’ efforts to thwart a takeover by LVMH, which kept the luxury group in the hands of original family owners.

In an interview with the Financial Times some years back Thomas talked about his experiences working with family businesses and how satisfying it was.  He said: “I’ve got three pieces of advice for young people. First, work for a family business if you can. I always did. They outperform non-family ones, and one reason is their longer-term view.”

Another notable family business specialist senior manager is Paul Drechsler, the chairman of family-owned Bibby Group in the UK. Before joining Bibby, Drechsler worked for many years as chairman and CEO at another prominent UK family business, the Wates Group. Bibby’s current owner Michael Bibby once hinted that Drechsler’s appointment was helped by the fact he’d worked at a family business beforehand. That suggests Drechsler is another good example of this new type of CEO.

That said, sometimes family business expertise at a CEO level offers little compensation for shrewd business decision making

Of course, there’s one big problem with hiring a CEO with a family business background - there aren’t too many of them. Not least because they tend to stay loyal to the business they’ve been with for decades. Like Norbert Reithofer, the ex-CEO of BMW, who’s been with the automaker for 30 years and is now head of its supervisory board. And John Dyer, CEO of Cox Enterprises, the US family-controlled media group, where Dyer has been since 1977.

Other notable non-family CEOs of family enterprises likely to be in big demand include Sergio Marchionne, CEO of Fiat Chrysler Automobiles. Marchionne is very close to John Elkann, the chairman of the Fiat group and the main family owner of the Fiat-linked business empire. Pablo Isla, the CEO of Inditex, the sprawling clothing empire owned by Amancio Ortega and his family most famous for its Zara brand, is also another example of this new type of CEO.

That said, sometimes family business expertise at a CEO level offers little compensation for shrewd business decision making. Martin Winterkorn spent nearly 20 years at Robert Bosch, the German engineering and electronics group, which is owned through a family and foundation structure. Winterkorn then went on to join family-controlled Volkswagen before resigning in 2015 with a shadow over his reputation linked to the diesel emission scandal at the automaker.

But the Winterkorn saga probably doesn’t upset the view that a new type of CEO is emerging - those with family business experience. The appointment of Christiansen at Lego shows they are in more demand than ever and will increasingly be so.