Rejecting the dynasty: a successor from Mitsubishi (2005)

A succession that chose the business’s continuity over the founding family’s rights

The core of this succession decision was that the founder let go of his own family’s right to inherit the company, in exchange for the continuity of the business. Nobutsugu Shimizu, who built Life in a single generation from a trading merchant back from the black markets, had decided early that he would choose his successor by ability rather than by blood; as an extension of the 1988 return to the core business in which he removed his own brother, he carried that idea into both the choice of president and the shareholder structure. In that the man he raised was an outsider from Mitsubishi Corporation, and that he handed even the top-shareholder seat outside the founding family, it has a character unlike the succession of a family firm.

That said, the choice to entrust the company to a successor brought in from outside held together only because twelve years were spent raising him, and because the founder let go of his own shares while still alive. That the founder decided not only whom to choose as successor but when, and down to which rights, to release — in this the thoroughness of the succession can be seen. How to shift to a structure that does not rely on the centripetal pull of the founding family? For a company moving from owner-management to its next stage, Shimizu’s choice stands as one model, and will keep being asked of as such.