With a net value of over $220bn, LVMH founder and CEO Bernard Arnault is the wealthiest person in the world.
The company is Europe's largest by market capitalization AND it's a family business!
And Mr. Arnault is determined to make sure it stays that way. That the company he’s spent a lifetime building remains in his family for generations to come.
Early on, this involved taking an interest in his children’s education. Later, assigning them mentors. And giving them important positions within the organization.
As a result, Arnault’s five children are now all senior leaders across the top luxury brands owned by LVMH - Dior, Tag Heuer, and Vuitton.
And he went further.
He also restructured the business to give each of them a 20% stake in the holding company. Drew up agreements stating they cannot sell the stakes for at least 30 years. And stipulated that any such sale must be to a direct descendant.
His careful but deliberate planning should secure the future of the business he’s worked so hard to build. And the future of his family for generations to come.
Louis Vuitton store window display on Regent street - LONDON, UK
There are lots we can learn from this case study.
Arnault’s succession plan has been decades in the making.
If you’re running a family business, and you’re yet to put a succession plan in place, now’s the time to do it. Whether you’re about to retire or not.
Arnault immersed his children (and successors) in the business. He surrounded them with mentors. Experts unrelated by family, free from the bias of blood ties, imparting priceless years of knowledge and industry know-how.
If you have a successor, or successors in mind, what are you doing to make sure they’re learning the ropes?
As a result of the training they had, Arnault’s children earned the senior leadership positions they now occupy. Turning them into ready-made successors once Arnault decides to retire.
Are you willing to trust your successor(s) with positions of responsibility? To expose them to the realities of running a family business? To prepare them for the inevitable transition that must happen at some point.
Arnault took steps to make his children stakeholders of his holding company.
In an ideal world, everything goes to plan.
Louis Vuitton Foundation Art Museum and Cultural Center