Putting Succession into Perspective
Dr Hans Michael Jebsen, Chairman of Jebsen and Co, can look back on a company history that has seen the family-owned trading group navigate extremely stormy political times, along with economic choppy waters. It’s with this perspective, in which survival has sometimes been a more pressing issue than succession planning, that he views the process of passing on the baton of leadership.
The roots of Jebsen and Co stretch back to the company established in 1895 by Jacob Jebsen and his cousin, Heinrich Jessen, to facilitate trade between China and Europe. That business subsequently divided into a Jebsen enterprise operating out of Hong Kong, Jebsen & Jessen in Hamburg and a Jessen arm based in Singapore.
Dr Hans Michael Jebsen is the third generation of the family to head the company. Under his leadership, professional management runs the business within a structure he describes as a low hierarchy.
In partnership with the Jessens over the last 120 years or so, the Jebsen family has successfully ridden out some turbulent times. During the last century’s two world wars, the fact the company was trading between Germany and the then British colony of Hong Kong brought severe disruption to the business and imprisonment for family members.
“During the wars it was, literally, survival that counted; survival of the individuals that were carrying responsibility for the company, not only the shareholders but everybody else involved,” Dr Jebsen explains. “We have no idea these days how existential these issues were at the time.”
Economic crises, such as the waves of inflation during 1970s and the financial crash of 2008, and the disruption to business models brought about by developments such as containerization in the shipping industry and today’s digital revolution, have also proved challenging.
The qualities a successor requires
Currently, the issues around identifying an eventual successor are not as problematic as they were during wartime – when it was often difficult for a family member to even be present in Hong Kong – but someone still has to be found who is ready, willing and able.
Dr Jebsen has clear ideas as to what constitutes ‘able’. “Successors have to be prepared from a professional point of view. They also have to have the type of personality needed to lead a family enterprise not just work in it – and these are very different propositions.”
He says such leaders need judgment, empathy, and the ability to make decisions – some of which may be unpopular. They must also be able to take the long view. “In addition, commitment to a family company also involves a certain degree of sacrifice. The legacy is important as is the sense of being a steward.”
Family rules dictate that no successor can view the Jebsen chairmanship as an inheritance. Instead, they have to earn their shares in the company by paying back a substantial amount of the share value.
“This gives a totally different sense of ownership,” Dr Jebsen points out. “What we’ve tried to achieve through our particular succession model is that each and every generation is again placed within the Generation One model; that means totally involved, totally committed, and totally responsible by also being totally in charge.”
Adapting to a changing world
Though he believes continuity is very important, Dr Jebsen stresses that this doesn’t have to mean continuity in the same line of business. “Today we are involved in both mining and manufacturing, as well as trading, and multiple facets of the service industry. But it’s still the same spirit and the same partnership that guides us, though this is a very different business to what it was in the 19th century.”
He cites the sale of Jebsen’s shipping company, after over 100 years’ involvement, as a particularly emotional wrench. Shipping has played a central role in the identity of the business, and there was also the deep sense of loyalty the business felt to generations of seafarers. “But even that cannot get in the way of a decision that is necessary in view of paradigm shifts in the industry.”
Succession planning is just part of the broader goal of keeping the business going, in Dr Jebsen’s opinion. “We now live in very dynamic times when disruptive forces can wipe out entire business models, and for the businesses threatened in this way, succession issues become almost irrelevant.
“What really matters is the corporate existence. Whether the company makes product A or product B is not the first priority. The first priority is that it continues as a going concern.”
Dr Jebsen says that to serve and add value is the great motivator for someone in his position and, while it is still only a theoretical question, he would consider handing over to a leader from outside the family, if it was necessary to bridge a generation gap.
“As a business leader and owner, one has to think about more than wealth preservation, but also about an operation and a legacy that you want to go on, and about the many individuals whose livelihoods and pride depends on the company.”
A very young Dr Jebsen welcomes a group of sailors from Shanghai to Denmark