success of a business depends on the skills of its people. So, be honest: How many of your team colleagues would you re-employ? How many of them are just “OK” and how many do you put up with because you think you have no choice? After all, an incompetent employee can harm their employer and a dishonest one can ruin them. Considering the risk, it is remarkable how carefree some businesses are when hiring new people. The Incas would probably have been astonished by these questions. Their elite leaders were subjected to rigorous training in special schools called Yachaywasi and Machu Picchu is believed to have housed one of these “Inca Business Schools,” where sons of both the Inca nobility and tribal chiefs from the conquered territories were educated. Seventeenth-century chroniclers describe the curriculum in detail: history, religion, and poetry, as well as arithmetic, bookkeeping, statistics, statecraft, law, medical procedures, and of course warcraft, weaponry, and hand-to-hand combat. All in all, it was a course of study reminiscent of a cross between modern military academies and elite universities. In addition, the curriculum included topics such as discipline, self-control, and pain endurance. The training ended with a month-long test under the supervision of the ruling Inca and, if you passed, you were eligible for jobs in administration and in the military.
The sons of the Inca princes, too, had to excel in the elite school and earn their place in the Inca nobility, just like the potential successor to the throne, who had to pass some particularly strict tests. “On the basis of these merits, he earned…the right to govern, and this was much more important than the fact that he just happened to be his father’s first-born,” writes Garcilaso de la Vega in 1609. Yes, the new ruler was selected from among the Inca’s sons, but this was often a wide circle of candidates, and by law, succession was determined by who was the most able for the position. Furthermore, in determining his succession, the Inca was assisted by a council made up of twenty relatives, all of which sounds well thought through. Automatic succession and poorly prepared personnel decisions are rarely blessed with good fortune, and a decision to rely on your “second choice” frequently comes back to haunt you. But don’t we still fall into these traps far too often?
Once again, the Incas are capable of really shaking us out of the conviction that ours is the most advanced era, and sometimes the twenty-first century is astonishingly archaic. Laws of inheritance under which a farm automatically passes to the eldest son still hold sway in parts of Europe. Siblings, especially daughters, are “subsidiary heirs,” which is a polite way of saying they have no rights of inheritance. It is much the same in many family-run businesses. A poll conducted by the I.F.M., the Research Institute for Family-Owned Businesses, in Bonn, Germany, revealed that more than two-thirds of the owners of medium-sized businesses with over 250 employees would like management succession to stay in the family. Above all, sons are preferred (57.6 percent), little different from centuries ago, and there is no mention here of tough selection procedures or demanding probationary periods in which the candidates have to prove themselves worthy of the position. In this respect, the Incas were astonishingly farsighted.
What Happens When the Prince Automatically Becomes King?
Otto von Bismarck once mockingly observed, “The first generation creates the wealth, the second manages it, the third studies art history, and the fourth generation squanders it all.” Even if one of Germany’s most famous political leaders and Reichskanzler was talking about the economy of the nineteenth century, it is undeniable: even today, countless owner-managed businesses find it difficult to arrange for a qualified successor. Indeed, it has been shown that almost three-quarters of all such companies—which, after all, play a major role in Europe, with up to 70 percent of GDP in some countries—have “absolutely no” or “currently no” succession planning in place. Clearly, they live in a world with no traffic accidents, illnesses, or other similar strokes of fate. The illusion of invincibility is powerful, even among otherwise considered and prudent business people.
While a high value is placed on innovation in technology, software, and marketing, when it comes to another key success factor—leadership—hope is often the guiding principle. Just like hundreds of years ago, mothers and fathers want to believe that their legacy is in the safe hands of their sons and daughters. From a human point of view, that is understandable, however risky it may be from a business perspective. Rarely are the potential consequences of such an approach so openly exposed as in the following example.
“The Best Man Needs Help”
Such was the headline the German newspaper taz placed above the picture of Konstantin Neven DuMont in October 2010. He was the heir to the fourth-largest newspaper publisher in Germany and, at the time, a board member at the media group M. DuMont Schauberg.
The business had been under family control since the beginning of the nineteenth century and, as far as the current patriarch Alfred Neven DuMont was concerned, that was the way it was going to stay, so he brought his son Konstantin Neven DuMont into his circle of top managers. Insiders at the firm were somewhat skeptical about the abilities of his successor, but the new arrival was nevertheless happy to give the journalists a more than confident statement: “I have the qualifications and have already proven that I can do the job at least as well as all those people from the financial sector or the managing directors from other publishing houses.”
A dispute over business strategy between father and son—not least about how to tackle the challenges of digitization—broke out and was further aggravated by an interview Konstantin Neven DuMont gave to the Bild newspaper. Bild was the biggest competitor of the family’s tabloid newspaper, Express, and the interview had not been discussed with the other members of senior management, who could hardly have been happy about it. There were consequences as Bild, quite naturally, took full advantage of the situation.
In November 2010, Alfred Neven DuMont relieved his son of all duties in the business. At the end of 2012, Konstantin Neven DuMont transferred his shares back to his parents and, between 2013 and 2017, he was bought out of the business.
The family learned from its mistakes. The family representatives, Christian DuMont Schütte and Isabella Neven DuMont, now exercise control at supervisory board level, while an external manager runs the operating businesses.
If you find yourself shaking your head in a combination of amusement and disbelief, you might want to think about that just for a moment. Let’s face it: Even in “normal” families, arguments erupt and emotions can often run high on straightforward day-to-day issues. So how much more difficult must it be to find agreement between parents, siblings, cousins, and more distant relatives on matters of business strategy, division of responsibilities, and the distribution of considerable wealth? The heiress to a large family dynasty described the challenge very aptly as follows: “We have to somehow combine this highly subjective environment with the real-life numbers and facts to come up with sensible enterprise decisions.”
Anyone who can maintain composure as they navigate this emotional minefield commands our respect. It is one of the most deep-rooted of human instincts for parents to view their children through rose-tinted glasses. Equally human is the all-too-critical attitude of many patriarchs, whose fear of the loss of power and status prevents a timely handover to a younger successor, or the belief of many founders in their own invincibility, which can completely suffocate the next generation. And all of this is taking place in an increasingly fast-moving and global era which is crying out, louder than ever before, for smart leadership.
“In the twenty-first century it will be far less about simply handing down material assets and far more about passing on the entrepreneurial mentality and aptitude to the next generation,” says Peter May, one of Europe’s leading experts on family businesses.
The Incas also lived in an era of change, constantly faced with new challenges. And they would have been equally familiar with power battles, jealousy, envy, and family feuds, all of which makes their disciplined approach to leadership development even more admirable—an approach which
