Bob Follett on Succession

Summary: Bob Follett leads us through Follett Corporation’s leadership succession from the second generation to the third. This is a family business life-cycle moment when outside managers are often brought in, and governance structures are adapted to reflect the change. Bob offers insights into recognizing talent, doing what’s best for the firm, preserving a legacy, and taking a path other than direct lineage when appointing leaders.

Background: Bob’s father, Dwight Follett, the eldest son of Follett founder C.W. (Charles Walcott) Follett, retired from the roles of president of Follett in 1977 and chair in 1979. Significantly for the future of Follett Corporation, the board appointed Dick Litzsinger, husband of Dona Follett Litzsinger (granddaughter of C.W. Follett and daughter of Robert D. Follett, who started the Follett College Book Company in 1930), as president and CEO in 1977. The appointment capitalized on the skills Dick demonstrated as head of Follett's campus retail business and challenged the family-business succession norm of appointing the firstborn son. Bob accepted the role of chair of the board of Follett Corporation in 1977.

In 1983, Follett sold Follett Publishing Company–the unit Dwight ran following C.W.’s death in 1952 and Bob led starting in 1968. With Bob's support, the other family owners accepted the sale. As a privately held firm competing against publicly held companies, the sale raised the capital needed to compete in two key markets: campus bookstores and the software-based delivery of educational products and services. Bob and Dick managed Follett through periods of change in the educational publishing industry until Bob’s retirement in 1994 and Dick’s retirement in 1997.

Bob ends the interview by encouraging family business owners to make decisions that serve the long-term interest of the family, both in succession and in other strategic moves.

Finally, as the interviewer, I was intrigued by Bob's discernment in decision-making—how he responded to circumstances by choosing between viable paths in ways that supported both business and compassion. Discernment is an important leadership skill in family enterprises and other businesses and is central to our teaching at Loyola University Chicago Quinlan School of Business.

-Katherine Sredl

Reflection Questions

These questions are designed to guide you through the film so that you can integrate Bob's story into your academic learning and understanding of your family enterprise. Consider watching Bob’s video and discussing these questions not only in class but also with family members.

What were the internal and external strengths, weaknesses, opportunities, and threats that Follett faced during the transition from second to third generation? How did these factors affect the board's willingness to accept an outsider (i.e. brother-in-law) in a leadership role?  

How are governance, ownership, and management in your family enterprise structured to build on the strengths of immediate, in-law, and extended family members? How are the interests of the firm and the family represented in governance and management? How would you like governance, ownership, and management to shape succession in your family?

Based on what you have learned in class or your own experience, what do you think were the viable paths Bob faced regarding the potential sale of Follett Publishing Company? What are the challenges on each path? Consider legacy, finance, and control in your answer as well as benefits to family and firm.

Consider times when you or other family members used discernment in decision-making at the intersection of family enterprise and family well-being. If you are not in a family business, then please use a family business in the news as your example. What were the viable paths in that decision? What decision was made? How were conscience and compassion enacted in the decision? How can you evaluate choices in ways that integrate academic learning, personal experience, and compassion?

Women, Ownership, and Governance | Featuring Jean Follett

Summary: Jean Follett, a fourth-generation member of the Follett family, emphasizes the importance of governance structures and processes that contribute to the long-term success of family enterprises as she recalls her service on the Follett corporation board in a non-executive family shareholder position, on the family council, and on the Follett Educational Foundation.  

Background: Family businesses have three overlapping systems – family, business, and ownership – and use formal governance structures – family governance, business governance, and ownership governance – to assess the unique opportunities and challenges of family firms. Family councils are a key tool in family governance; they focus on the family’s relationship with the company, and their processes can build intergenerational connections to the enterprise. Board seats for non-executive family owners allow their financial interests to be heard, and philanthropy creates opportunities for maintaining family legacy outside of the enterprise. 

Jean shares examples of how the relationship between the three systems of family business and governance structures adapt to address the needs that arise as families and their enterprises evolve, such as when families expand across generations. In the third generation of the Follett family, management consisted mostly of men who had married into the family. The women of that generation were shareholders who strongly identified with the business but were not employees. Jean describes her aunt, Nancy Waichler, as a transformative governance leader. Nancy was the first woman on the Follett board, serving in a position created for non-managerial family shareholders; Jean recalls that, “By the time my generation came along, there was no question that women were going to be on the board.” 

Jean describes the processes that made her work on the family council impactful: communicating between the family and the boardroom, organizing annual family council meetings, educating the next generation, and serving as connective tissue across several generations and family lines. The non-managerial shareholder seat on the board allowed family owners to know what was happening on the board and have a stake in it. In discussing the Follett Educational Foundation, Jean emphasizes philanthropy as a structure that emphasizes the stewardship of a family’s legacy.  

Working with governance experts at Loyola Quinlan’s Family Business Center helps many family enterprises such as Follett identify the best practices for effective governance structures and practices, including corporate boards and family councils. 

As an educator who grew up in a family enterprise and believes in the potential of family enterprise, I am grateful to Jean for interlacing her experiences with her knowledge of governance structures for multigenerational, shareholder family enterprises.  

Reflection 

Let’s apply what we’ve learned by creating a family council. First, recall a time when someone made the written or unwritten values of a family, family enterprise, or community come alive through their behaviors. Examples of a person demonstrating values enacted through behaviors could be a grandmother demonstrating the value of connection through preparing a monthly family meal that brings to the table her three children and four grandchildren, or an aunt who demonstrates the value of curiosity by encouraging it: anytime you text her with a question about anything, she replies. For the family, business, or community you recall, name the values, the person who demonstrates them, and how they enact them. Name the people who are carrying out those practices.  

Now create a family council that brings the values enacted through the behaviors you identified above to life through governance structure, leadership roles, and decision-making. What are the council’s structure, roles, and decision-making processes? What are the committees and what are their responsibilities? When do meetings occur? How does the council broaden participation among family members who have not worked at the enterprise, but might be shareholders? What information should be shared between council and management, and in what directions does the information flow (back and forth, one-way)? What are the strengths and weaknesses of your council structure? Feel free to use resources beyond this case to define the questions. 

Let's apply the concepts of philanthropy and stewardship to your family’s legacy. The Follett Educational Foundation provides opportunities for family members who are not employees of the company to remain involved in the family's legacy. What philanthropy or other stewardship would fit your family? For example, if your parents are mechanical engineers and entrepreneurs, then perhaps an engineering scholarship at a local university would be a good fit. If your family loves camping, then perhaps nature conservation would offer an opportunity for stewardship.

Britten Follett on Women and Successor Legitimacy

Britten Follett, CEO of Follett Content Solutions and 5th Generation Follett family member offers viewers the opportunity to learn how women successors establish legitimacy while maintaining legacy in family business. This video is of interest to women planning a career in their family's enterprise, women switching careers and business sectors to work for their family's enterprise, boards managing succession, and the wider family enterprise sector concerned with developing successful and resilient families and enterprises.

Britten brings to life a key takeaway from family enterprise education, research, and consulting: family sets family enterprise apart from other enterprises. Thank you, Britten, for generously sharing your commitment to family enterprise.

Katherine Sredl
Lead Scholar, Follett and Litzsinger Family Enterprise Learning at Loyola

Reflection Questions
Consider reading these Ignatian Pedagogy inspired reflection questions after viewing the video to make your family enterprise learning experience transformational.

• What, if any, assumptions, thoughts, or feelings did you have about young women taking leadership roles in family business?
• What do you think or feel about this issue after watching the video?
• What about the video might have caused this change?
• What one thing can you do after watching this video? Some ideas could be: start a conversation with my parents/daughter/board about the future, check out Loyola's Family Business Center programs, ask AI to summarize "women succession in family enterprise"