A New Generation Takes Over

Kim Jong II announced recently that he plans to pass leadership of North Korea to one of his three sons - which one he has not yet said. Coincidentally, just a couple of days before the radio broadcast outlining the communist dictator's plans for succession, another dynasty, the royal family of Napa wine, the Mondavi brothers, healed a breach that split the family apart 50 years ago.

Neither Robert Mondavi, 92, nor Peter, 90, proffered an olive branch precisely, but close enough. The two will be united on the same label glued to a small barrel of wine to be sold at the Napa Valley Auction next summer. The wine will come equally from the cellars of the sons of the brothers.

Robert and Peter's sibling rivalry erupted into a war of the vineyards when they quarreled over how to run the wine business, Charles Krug that their father had bought for his sons just after World War II. After leaving the company in 1965, the eldest son didn't spend too much time on sour grapes. He built the eponymous Robert Mondavi Winery by helping to introduce Americans to the pleasures of chardonnay and merlot. Under shareholder pressure he sold the company to Constellation Brands late last year for $1 billion. Meanwhile, his younger brother toiled in his own vineyards, growing the Charles Krug Winery into a major force in Napa Valley with over 850 acres under cultivation

January was a big month for family business dynasties. On January 18, at a hastily called board meeting in New York, a cable-owning family divided over the sale of a satellite unit. Cablevision Systems Corp's founder Charles F. Dolan, 78, had nurtured the sickly unit, Voom, and had big plans for its future. Cablevision's chief executive - and Dolan's son, James, 49 - wanted to get rid of the troubled offspring. The board of directors, spooked by recent financial penalties borne by the board of WorldCom and Enron, voted with the son against the father.

So what do Kim Jong II, the Mondavi's and the Dolan's have in common? The conundrum of succession.

According to a study quoted by Ivan Lansberg, an expert on family business and author of "Succeeding Generations: Realizing the Dream of Families in Business," published by Harvard Business School Press in 1999, less than 30 percent of family businesses make it into the third generation and less than 10 percent make it into the fourth.

This research is backed by folklore translated into just about every language and culture. English speakers quip: "Shirt sleeves to shirt sleeves in three generations." In the east, sages nod: "Rice paddy to rice paddy in three generations."

In order for succession to go as smoothly as possible, according to Lansberg's analysis, the current generation leading the business must incorporate the aspirations, or dreams, of the succeeding generation into a "shared, collective dream." Jungian though this may sound, it's a pretty simple idea. The older generation, founding or inheriting, must listen to the ideas of the younger in order to make a transition successful.

Easier said than done. "People don't like to let their kids make any business decisions. They give them nominal power but not real power," says Peter White, managing director in the family advisory practice of the Citigroup Private Bank. It is not that the parent sets out to kneecap the kids; it's just that he can't really separate his own identity from that of his business. The over identification with the business can blind a parent to what's in the interest of the next generation - not to mention the future of the business.

Is this so very different from a parent who can't really appreciate the difference between his vision for his child, and the needs of the child himself? Like the parent who can only imagine his child as a doctor, a lawyer - an Ivy League student. Whose dream is it, anyway?

Says Mr. White, "Everything that is an issue for a family business is true for everyone else. The things that good parents do for their children cover pretty much the same waterfront whether it is in a business or simply a family."

The Korean press has reported that Kim Jong II favors his younger son, who, reportedly, "has a hard glare." Perhaps a hard glare suggests a shared vision with that of the notoriously tough second-generation communist dictator.

Ms. Bailey is a business writer and family therapist practicing in New York.