Tuesday, August 30, 2011

Passing along Freakonomics' Scionology to another generation

A recent Freakonomics episode from earlier this month (not the latest one), "The Church of Scionology," talked about the prudency of nepotism for companies. Was passing along the reigns to the company to a scion the best thing for the business?

Overall, the answer: It can be, but not always.

There's some who think that when the successful—the ones who worked hard to make the company what it was—pass along their success to their offspring, who didn't have to work hard to get it, that merely creates a lazy aristocracy. And it does seem likely that those who grow up with the proverbial silver spoon would lack the motivation their company-founding parents had, leaving them unprepared to run the company well when the parents step down.

So, unless those wealthy company founders want their children to be spoiled dilettantes who are only prepared to live off inheritance, they should make their children still have to work for their success.

Of course, that whole notion of wanting to have one's child be the scion who carries on the family name does seem like a pretty arrogant and egotistical in the first place. Of course, that level of egotism seems likely to have been inspired by insecurities—wanting to have the name continue to be famous compensating for poor self-esteem—but those same psychological issues (presumably from the founder's childhood) that make for that need for immortality in name are also the sort that would inspire the hard work to get the company to be successful in the first place.

And if you're the child of a parent is that driven as to not only want to succeed but to be a titan in the business world, to have their name known by the public, and to want you to be a chip off the old block and follow in their footsteps (and has the corresponding ego to go along with it), is there not a greater motivation to rebel against expectations?

It must be that that drive to succeed the parent had brings with it the delusion that the child would have the inclination to want to be anything like the parent, much less to be qualified to run the company.

Of course, that today's entrepreneurs seem inclined to develop the company only to the point where it can be sold off to a large conglomerate for a huge profit may indicate that the desire to pass a company off to a scion is somewhat anachronistic, a lingering remnant of earlier centuries (and from a time when monarchies passed rule of the land through blood rather than merit). Conceivably we may be not far from a time when no one expects to keep a company around long enough to pass it down to the kids, and this will be merely a historic footnote.

The problem will eventually solve itself.


  1. I agree, I have rarely seen nepotism work out well. The quickest way to ruin a child's life is to tell him that his future is already decided.

  2. What about politics? It seemed the game plan was to put GW in office, then Jeb. But that didn't work out thanks to GW really screwing up. But there's another younger Bush waiting in the wings when the public's memory grows dim.

    Of course, this was is Republican answer to the Kennedy clan syndrome.

    Political dynasties can suck even more than royal lines.


So, what do you think?