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Lessons from the Mob

While Corleone Imports Inc may seem like a distant reality to the way your family business is run, there are lessons that can be learned from The Godfather– not least how NOT to handle a sticky situation

What does your business have in common with Corleone Imports Inc, the fictional business of Francis Ford Coppolla's The Godfather trilogy? Your initial response is (I hope), 'Not a lot'. The Corleones are a Mafia family whose business interests are gambling and protection rackets, not to mention amateur equine surgery.

But while the daily life of Corleone Imports may seem far removed from respectable organisations, The Godfather has plenty to teach family businesses. Despite the bullets, blood and dirty deals, The Godfatherfilms are, as Coppolla himself says, "about a family".

Family vs business: the story of The Godfather
"Fredo - you're my brother and I love you. But don't ever take sides against the family again."
– Michael Corleone gives older brother Fredo some fraternal advice.

Family is important to the Corleones. Ask Vito, the first generation owner or Michael, his successor, and they'd say they always acted for the family. But let's look at what happens in the films.

Vito Corleone has three sons, Sonny, Fredo and Michael, and a daughter Connie. Being a patriarch of a certain generation, his daughter means nothing to him and is married off to the first available thug who'll take her.

Vito has plans for all of his sons. He doesn't discuss these plans with any of them. He doesn't need to – he's the boss. They will do as he says. Besides, there is plenty of time; he's going to be around for a while yet.

Then Vito gets shot. Sonny steps into the breach because the incapacitated Vito wants a family member, no matter how inexperienced, to take over. Like many family businesses, there is a fear of allowing a non-family member anywhere near the seat of power. Sonny's reckless nature drags the business into a war and he ends up dead, leaving Michael to become Don more out of duty than desire.

So in the course of his reign as CEO of Corleone Imports, Vito delivers his daughter into an abusive marriage, while his careless plans for succession leave one of his sons dead. It's not looking good so far.

But what about Michael, the reluctant second generation heir? Is he any better at managing the family? Michael gets off to a comparatively good start, executing his sister's abusive husband. But things go downhill from there. He uses his power over her finances to vet her potential future husbands. He neglects his wife Kay, expecting her to be a nice, submissive baby-making machine like his own mother. This is not a scenario Kay is happy with and their marriage breaks down.

And then of course, there's Fredo. Michael's older brother is a weak character who Michael treats like a child, sidelining him into a part of the business where he won't cause trouble. Fredo resents this; Michael is his younger brother and yet he's the head of the family, not Fredo. Fredo's ambitions lead him to betray Michael inadvertently. So, Michael has him killed. His only concession to family values is that he waits until both their parents are dead before giving the order.

By the end of the second film, of the original Corleone family, only Michael and Connie are left alive, with Michael estranged from his wife and children.

Succession planning
What are Michael and Vito really committed to? The business of course. But the business is meant to provide for the family, not destroy it – as it clearly has done in the films.

Good succession planning puts the family before the business, taking family members'needs into account rather than pushing them into a career they may not be interested in.

My own grandfather arrived in the UK from Poland after World War II and set up an electrical company. All but one of his ten children entered the business, my father succeeding him as CEO. Several of the second generation, including my father, felt that they had joined the business without fully considering other options. In an effort to prevent members of the third generation from 'drifting' into the business, my father and his siblings established a rule, stating that any family member wishing to join the business had to have at least five years'experience of working externally, to ensure that anyone who did join would have both the skills and desire to work there.

Imagine if Vito had said to his kids, "What do you want to do? Michael, you want to be a teacher? Fine. I'll put you through college. Sonny and Fredo? You want to join the business? Work for someone else for five years then come back when you've got some experience to offer. " If Vito had done this, perhaps his children would have lead more fulfilling lives. It would have made a tedious film, but at least it would have had a happy ending. The family business empire:

Absolute power corrupts
"Keep your friends close – but keep your enemies closer." – Vito's management advice to Michael.

Even the smallest family business can seem like an empire to its owner. In fact, the smaller a business is, the more like a dictatorship it tends to be. Both Vito and Michael wield absolute power over their subjects. The staff are like knights in a feudal society – service is literally a matter of life or death.

But while the dictatorship approach works fairly well for Vito, Michael faces a problem that his father does not. Who sets up a family business? Almost always one individual. If more than one, the partners either have a shared vision or the differences are quickly sorted out and one buys out the others.

However, when a business expands into a second generation, there might be two, three or more kids all entering the business. Suddenly there are several visions where before there was one. And for the business to be successful, there has to be one vision, which means subjugating the others. Furthermore, if the other siblings feel that they have a right to be there, and that there's no reason for any other sibling to be more important than them, it leads to sibling rivalry. This is even more likely if, like Michael, an heir is younger than the siblings already working within the business. The sensation of being displaced as the senior family member can be very threatening, and often gives rise to jealousy and resentment. Internal alliances form. Weaker family members, who are preyed upon by flattering business associates can be a liability, as Michael finds out.

Therefore, when a family member threatens the welfare of the business, which does the new CEO choose to protect – business or family? In Michael's case, the choice is clear. When Fredo betrays Michael, he also betrays the business - Fredo is no longer part of the family and is treated like any other enemy. To Michael, the business IS the family – and if you're not with it, you're against it. But again, this goes against the point of setting up the business in the first place.

Sibling rivalry
While Michael is certainly the most suitable successor to Vito, Fredo feels undermined and cheated. This is compounded by the fact that Fredo has very little to offer the business. However, because he is family, rather than confronting or firing him like a 'regular' employee, Michael sidelines him, leaving him in a lucrative but minor role that makes Fredo seek the approval of outsiders.

When Fredo betrays him, Michael doesn't have a father's protective instinct toward his child. He has assumed the mantle of head of the family with reluctance. He doesn't see why he should have to look after his incompetent older brother and resents Fredo. This resentment turns to anger when he realises that he's spent all this time looking after a weak link in the family only to be repaid with treachery. Michael feels entirely justified in cutting Fredo off.

Again, good succession planning can prevent some of the problems associated with sibling rivalry. But another important step is to ensure that family members are treated the same as non-family members. There should be clear performance expectations that need to be met.

Unsuitable family members know they are under performing. If they are bound to the business with golden handcuffs, they will grow to resent their powerless situation, which only stores up future problems for both the family and the business.

Although it may be uncomfortable, it is best to confront these issues as and when they arise. If it is made clear from the start that family members retain their positions through merit and achieving results, then it will be less difficult, though still painful, to deal with those who fail to make the grade. And I'm sure Fredo would rather have been fired than shot.

Fear, the great motivator
"Luca Brasi held a gun to his head and said, either his brains or his signature went on the contract. "
– Michael enlightens Kay as to how his father does business.

Fear is the driving force behind the Corleone family business. The family does someone a favour and then expects eternal loyalty in return. The trouble with this method of doing business is that it relies entirely on people continuing to fear you.

By the beginning of the third film, Michael has built the business into a large corporation and is preparing to float it on the stock exchange. He hopes to realise his dream of legitimising the business, and then retire.

However, the company has grown to the extent that he can no longer carry the corporation with him by sheer will power alone. He is also older and in poor physical health, making him vulnerable to his enemies.

When Michael attempts to sever ties with the other families, offering them the Corleone's share of crime rackets in return, they are reluctant to let him go, urging him to let them 'dip their beaks'in the profits of his 'legitimate' organisation. Fortunately for Michael, they are all shot in a helicopter gunship attack, but most businesses can't rely on heavy artillery to sever old partnerships.

Connie also sees Michael's fragility and feels that the family needs a strong figurehead. She brings Sonny's illegitimate son Vincent to Michael's attention and gives him the backing he requires to lead the Corleone family into war, against Michael's wishes, while Michael, like Vito in the first film, is temporarily incapacitated.

Fear is a fragile basis on which to run a business. The risk is that family, staff and partners will turn on you when you become weak, as Michael discovers.

Rather than trying to push change through single-handedly, which he is no longer in a position to do, Michael should have spent more time persuading Connie, his nephew Vincent, and his old business partners, that the new direction was right for the company. He could have built up a wave of support to carry his wishes through. Instead, he has to resign himself to retiring and allowing Vincent to carry on the family business in the same bloody vein as before.

Large changes in the direction of a business, like flotation, require a long period of planning and consultation. The larger the business, and the family, the more complicated this process will be. It can be assisted by ensuring that all family members, involved in the business or otherwise, understand the position on shares and voting rights. This is where non-family professionals can be particularly helpful, in arbitrating disputes and explaining legalities.

The moral of the story
The lessons of The Godfather films can be summarised in one simple sentence: the first generation sets up a family business and the following generations spend the rest of the time trying to get the damn thing off their hands.

Perhaps a more pragmatic way to look at it is: the best way to run a successful family business is to communicate with one another; keep business and family issues separate; and remember to keep the family's best interests in sight at all times.

If you haven't seen the films, then I recommend that you do. As a piece of filmmaking, they can't be beaten. If you have seen them, then it's worth taking the excuse to watch them again with your own business in mind. I think you'll find there's a lot to be learned from the life of Corleone Imports Inc. Even if it's just a few tips on dealing with sub-contractors. 

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