One of the more difficult business challenges is to engineer succession between generations (especially in family businesses)such that value is preserved. As in so many other areas Walmart is an example of getting it right:
It's important to note the incredible growth of Walmart AFTER Alice, Jim, Christy, and S. Robson Walton inherited ownership of the chain.
Walmart in 1992 (year of Sam's death)
Revenue - $43 billion (or $127 billion in 2013 dollars)
U.S. stores - 1,922
International stores - 8 (Mexico and Canada)
Walmart in 2013
Revenue - $466 billion
U.S. stores - 4,005
International stores - 6,148 (26 nations)
What did the Walton heirs do after Sam's death? They continued to risk their original inheritance, plus the much greater earnings since then, invested in the company they believed in. They continued to select talented leaders who successfully earned the trust of hundreds of millions of customers. They approved the many important strategic moves offered by those leaders over the past 22 years.
Assembled by John Dewey – commentator Cafe Hayek.
Governance which develops workable succession processes thus has the potential to add greatly to value retained – and grown.