Succession, "Pruning the Tree," and the Passion for Continuity

As already noted, through most of the company's history, the family and business head were one and the same person because the succession rule was the simple one of primogeniture. Each elder son became the ruling patriarch in turn. And when there was no elder son, the baton would be passed to the eldest nephew. Although women might find themselves at the head of the company for short periods, this was viewed as a temporary stewardship until a willing and capable male heir could be found.

Yet, as remarkable as was this family business' success, the principle of primogeniture was not without problems. The Zildjian family patriarch was not always up to the task of meeting new business challenges with the same degree of initiative shown by his predecessor. Just such a problem arose in the late 19th century, as a member of the family relates in a sketch dealing with the company's early history:

"In 1865 Avedis (II) died leaving two sons, neither of them of age.The business and secret process therefore passed to Kerope Zildjian, a younger brother of Avedis.From 1865 to 1910, Kerope managed the business competently but without the imagination that his brother had shown.He continued to enter cymbals in appropriate exhibitions but did not make personal trips to stimulate business as his brother had done.He was more content to fill orders as they came in."

Primogeniture, as a succession principle, relied upon an ascriptivecriterion, that of sex and birth order, rather than basing the transfer on an achieved status, the family member's demonstrated competence. It meant, in consequence, that leadership of the business wasn't always placed in the hands of the most qualified child.

Today, for the Avedis Zildjian Company, rule of primogeniture is coming to an end. This is in keeping with important cultural changes that the Zildjian family and a growing number of American business families have come to accept.Such changes have expanded business and professional opportunities for women. Competence, sometimes defined as skill, knowledge and experience, must become the overriding criteria for leadership succession in order to effectively confront the competitive demands of business today.

At the very start of the article, I noted that a passion for continuity can lead a business family to put the interest of its business above even the interests of the family's internal tranquillity. Though painful, this is sometimes necessary for survival.

In the case of the Avedis Zildjian Company, at least during the American century, Avedis III had to "prune the tree," as his granddaughter and heir apparent Craigie Zildjian described the need, recognizing that management opportunities in the company were beyond the reach of a younger brother and his children, to whom he had given some stock.Avedis saw the business as still relatively small and was worried about the possibility of internecine family conflict that could result from expanded ownership.What Avedis III did instead for his younger brother was to help his children with their education, so they could pursue other business opportunities.

Armand Zildjian follows his father's wisdom in this regard.Though Armand and his brother, Robert, had worked together for many years, Armand recognized the dramatic difference in their styles.Exercising the leadership and control that had been granted to him by their father, Armand successfully negotiated a separation agreement with his brother. Robert now operates his own manufacturing facility under a different brand name in Canada.

Two of Armand Zildjian's daughters, Craigie and Debbie, third generation granddaughters of Avedis III, are poised to guide the company, not just as interim stewards until a male successor can be found, but as permanent successors. They are inheriting the mantle of leadership because of their demonstrated competence as members of the company's current management.

A brother, who in an earlier era would have been preferred simply on the basis of gender, is no longer active in company management.He wanted, according to family members, operational control of all aspects of the business but the company needed more of a team player in order to continue its growth. Yet ultimate control of the business, Armand believes, should rest in one hand, not several.

Although three of hisfour children have some stock ownership (a third daughter chose a different career and was never involved in the business), the voting control will eventually be entrusted to Craigie when she has matured sufficiently in her mastery of the business, at which point the transfer of leadership can finally take place.A non-family member currently serves as Chief Executive Officer, while Armand retains the title of President.

"Pruning the tree" and thus limiting control to just one branch of the family, and even to just one of several siblings in that branch, obviously means restricted opportunities for other relatives.So, does that not dampen the passion of the family for the business?To the contrary, I would argue that focused leadership and passion go hand in hand. Avoiding diluted control for many family businesses is essential for survival and continuity. It is more than just a matter of avoiding the feuds that could lead to litigation and possible liquidation.Focused leadership also sustains the intensity of the passion that gave birth to the business and nourished it through good times and bad, through lean years and as well as the years of plenty.

Although I have spoken of passion in the context of the Zildjian company's concern with product quality, its missionary attitude towards market research and product promotion, not to mention the family's adroit blending of Old World craft skills with 20th century technology, there is just as obviously a very personal dimension to such passion, a dimension that I believe captures the true essence of the leadership capacity of the exceptional entrepreneur.

There is a story about Avedis Zildjian III, the American nephew who answered his uncle Aram's call in 1927 to accept the baton of leadership, a story expresses the very essence of the entrepreneur who is not just a competent businessman but a man of business passion as well.As his son Armand relates the story,

"In 1939 the boiler in the laundry next door blew up, and the ensuing fire took most of the Zildjian company with it.However, four to five days later, Avedis had the business up and running. On another occasion, Dad went to light the oven, but let too much time elapse before lighting it. This caused an explosion that burned his entire face, and he was taken to the hospital.That same afternoon he came back with his face completely bandaged and went immediately to his desk, where he typed out some bills the way he did every night.He was unstoppable!"

Indeed, Avedis III was unstoppable, like the company he brought from the Old World to the New, from its pre-industrial roots into 20th century United States industrial culture, the company founded by his ancestor Avedis I, in Constantinople, almost four hundred years ago--the company that his son Armand has continued to modernize and expand, and that his granddaughters will soon inherit and carry forward to yet another generation of Zildjians!

The stakes of survival in any family business are high. But how does one measure those stakes when the family business has survived through close to four centuries?The burden now rests on the shoulders of Craigie and Debbie.Together with their father, they are openly addressing what they consider to be the major issues that will allow to continue as a family business.

One is their willingness to recognize that they, simply by virtue of being family members, are not necessarily the most competent to run the day-to-day operation of the business.Hence, they have empowered a non-family Chief Executive and have a non-family CFO as well.They have also added non-family members to their Board of Directors. In so doing, they seek a more objective and broader base of expertise. They both know that the decisions they make must meet the needs of the business as well as the needs of their families.

Even while their children are young, with the oldest still in high school, they are talking about establishing entry criteria for family members who may wish to join the business. And, perhaps, most important, not simply for their survival, but for their prosperity, they continue to discuss with a passion of their own their visions for the future. It is the power of this dynamic that may ultimately do the most to ensure that "Zildjian" will remain at the forefront of cymbals for generations to come.