On January 12 2010 a huge earthquake shook the Caribbean island of Haiti, one of the world's poorest countries. It caused unimaginable devastation, claiming the lives of some 300,000 people. If that wasn’t enough, Hurricane Irene struck the country a year later, causing flooding and other damage.
Amidst all this chaos, a long-established and well-known institution in the capital, Port-au-Prince, managed to stay afloat: the Hotel Le Plaza, founded in 1955 by the grandmother of current manager Marc Pierre-Louis. It not only survived the disaster, but also served as a shelter for victims and international aid teams assembled in Haiti. In addition to the earthquake, La Plaza has survived decades of revolutions, multiple natural disasters, and severe economic hardship. How did it do it? And does it have anything to do with being a family business?
The answers to these questions are found in a new book called "The Enduring Enterprise," written by Devin DeCiantis and Ivan Lansberg of the international family business consulting firm LGA, and recently published in the US.
Lansberg is the founding partner of LGA (Lansberg Gersick & Associates LLC) and a former professor of organizational behavior at the Yale School of Management. He currently teaches at Kellogg School of Management. He has written two influential books about family businesses "Succeeding Generations" and Generation to Generation," which he wrote in the 1990s. DeCiantis is managing partner at LGA, and advises executives in both the private and public sector in North and South America, Europe, the Middle East and Asia and has taught at Harvard, Yale and Northwestern Universities. The firm's activities in Israel are led by Mika Mazor and Galit Philosof, who assist leading families in the economy in the process of planning continuity and intergenerational transfer.
Talking from his home in New York, Lansberg says, "I got to know the La Plaza Hotel through a student of mine at Kellogg who was part of the family that founded the hotel. As part of the course requirements, the students were asked to write a paper on their family company, and that’s how I learned about the story."
Lansberg says that one of the things that allowed the hotel to survive and even thrive after difficult events was the fact that "it had multiple generators, storage rooms, and multiple water sources, so if one system failed, they could quickly switch to using another."
DeCiantis details, "The hotel was prepared in advance for a situation where there was a disruption in the supply chain. So, when the earthquake came, they were prepared. Other hotels, which had only one Internet connection and only one generator, with no reserves of fuel for the generator, failed to cope. The hotel became an island of stability, within a wider island of chaos."
Holding most of the world's wealth
In the book, Lansberg and DeCiantis draw inspiration from the stories of family businesses around the world, many of which grew and thrived in the developing world or in countries considered to be the "global south," such as Colombia, Peru, Saudi Arabia, India, Venezuela, and Argentina.
Through various themes that contribute to the resilience of family businesses - redundancy, which is relevant to La Plaza’s story, symbiosis, diversity, and others - the authors present strategies that have allowed businesses to thrive for generations and that can still be learned today.
"This is a book about how businesses can achieve resilience," says Lansberg. "The idea is that economies and companies operating on the front lines of capitalism can also learn something from a Guatemalan family business run by a sixth generation of the family. There is a lot to learn from businesses that have gone through different kinds of upheavals and survived them."
The two make another point: Although 20% of Fortune 500 companies are controlled by families, but from a broader perspective, family businesses are responsible for 90% of all business activity worldwide. "Most of the world's wealth is in the hands of family businesses. Most of the global growth will come from what we think of as developing countries."
La Plaza Hotel’s advance preparation for extreme situations is reminiscent of the way Israeli tech companies sent workers abroad during the war, so that they could continue to provide service even if, God forbid, Israel’s electricity system had collapsed. Lansberg agrees: "One of the important lessons from La Plaza Hotel is that as the world becomes less stable, companies need to shift resources from growth alone to investing in resilience, that is, the ability to survive difficult times and deal with crises."
Another example of a family company, one that has thrived for 150 years, is Indian corporation Tata, whose businesses are extremely diverse, spanning steel and cars as well as software and communications. Tata represents the principle of diversity in business in the book. "When the Tata Group builds cities for its employees (as it did, for example, in Jamshedpur, which is also known as the Steel City), the urban planning is designed to appeal to all types of workers and religions," says DeCiantis. "That's why there are temples, mosques, synagogues and churches there. In the sports sector, you can find soccer, baseball and hockey fields in these cities. This is a society that understands the value of diversity."
DeCiantis explains how this diversity contributes to the company. "It allows much easier adoption of ideas from overseas. It is no coincidence that family members studied abroad in France, England, and East Asia. They understood that no one has a monopoly on good ideas and it's worth being open to as many diverse experiences and ideas as possible."
"In terms of a nuclear family," says Lansberg, "There are studies that show that firstborn children have different characteristics from middle and younger children. So diversity as a characteristic of nature and evolution is essentially embedded in the DNA of families."
Thinking about family values
Samsung belongs to the South Korean Lee family and is considered what is known in the country as a chaebol, a large family conglomerate. The company was founded in 1938 by Lee Byung-chul, but only in the 1960s did it begin to expand into the electronics sector, and later into the chip sector. As of 2025, Samsung is the largest chaebol in South Korea, and its revenue is more than 20% of the country’s GDP.
In the book, the tech giant is used as an example of a principle called symbiosis. DeCiantis explains, "The symbiosis has benefited chaebols like Samsung, LG, Hyundai and many others, as well as South Korea, which has gone from being a poor country to one of the richest in the world." Because of close ties with the government over decades, these companies have thrived due to grants, preferential loans and protection from international competition, and Korea has become an economic miracle. In the case of Samsung, the symbiosis has also been tainted by corruption. In 2017, it was revealed that the company, when headed by chairman Lee Jae-yong, gave former President Park Geun-hye and her associates millions of dollars in bribes in exchange for government support for a merger between two Samsung subsidiaries. The affair ended with the president’s impeachment and charges against Jae-yong.
"In the last decade, since the corruption scandal broke, there has been growing resistance in South Korea to the privileged position that the chaebols occupy in Korean society. You have to read the map and understand when the wind changes," says DeCiantis.
Lansberg sees this as an opportunity to draw broader conclusions. He says, "It's important to remember that in a family you have to hold on to your values, you can easily sell your soul to the devil in all sorts of ways. There's an excellent book called 'Nazi Billionaires' by David de Jong that tells the story of industrialists during World War II in Germany, like BMW, Porsche and Volkswagen, who were originally very ethical people, but as circumstances changed, they started selling bits of their values to Hitler's initiatives. They had factories with forced laborers and they collaborated with all the atrocities he was involved in. "Going back to symbiosis, not only do you have to think about your values and make sure you don't cross certain lines that will ultimately make you regret your choices, but you also have to think about them strategically."
Lansberg recounts for example that, "Companies in Singapore reserve a seat on the board for independent directors who are also well-connected to the government, so that they can understand what’s going on there and how to negotiate with the government when necessary. These are practices that stress the importance of proactive engagement with the surroundings."
At this point in the interview, Lansberg and DeCiantis link the discussion to an article they wrote in "The Atlantic" magazine about a decade ago about an incident on a Korean Air flight in 2014 that has become known as "the nut rage incident."
In this incident, Heather Cho, a former vice president of Korean Air, which her family founded and still runs today, lashed out at the flight crew because she was served macadamia nuts in a bag instead of on a plate in first class. She insisted that the plane return to the gate to unload the service manager, causing a delay of about 20 minutes. Cho was sentenced to a year in prison and released five months later, not before the entire family apologized for the incident.
"Not only did she yell at the flight attendant, she also hit the flight attendant with an iPad. The point is that the symbiotic relationship with the government led to a sense of entitlement," says Lansberg. "None of the strategies we mention in this book are silver bullets. Each one has to be thought through carefully and implemented carefully."
Resilience that comes from upheaval
Lansberg and DeCiantis’ clients around the world are expected to be affected by President Trump’s tariff policies, which could soon include Canada and Mexico. "Personally, I think Americans don’t fully understand the implications of dismantling institutions that have been carefully built over more than 70 years," says Lansberg.
However, he believes that his clients, for whom instability is a daily occurrence, have developed resilience. "Businesses in Mexico and Canada are scared because of the uncertainty and the way tariffs are used as a tool of foreign policy, in a way that is authoritarian. They are putting a lot of effort into trying to develop contingency plans for every scenario. Of course, that distracts them from their own management and the things they need to be doing." But he says that businesses located in developing countries and the Global South have developed a stronger "immune system" over time.
"We found research that people who live far from medical centers develop stronger immune systems than those who live close to medical centers," says Lansberg. "That’s true for businesses, too. If they operate in a volatile environment with a lot of uncertainty, they’re prepared for even tougher times, if they come.
"We spoke to one of our clients, a CEO in Venezuela, who said, ‘I spend at least 40% to 50% of my day responding to circumstances that have changed today, like a government official changing a law. His immune system is working overtime. Businesses operating in places like Venezuela are used to all kinds of upheaval, for better or for worse."
The question of succession
Finally, we discussed a burning issue in family businesses: whether and when is it appropriate to bequeath the business to a manager who is not part of the family? We discussed this in connection with Warren Buffett's (94) decision a few years ago to appoint Greg Abel, currently chairman of the company's non-insurance operations, as his successor as CEO of Berkshire Hathaway. The son, Howard, who has been on the board for many years, will be appointed non-executive chairman in the future. Buffett's daughter, Susie, has also served on the board since 2021.
Buffett also made it clear that his children will not receive the majority of his fortune, estimated at about $140 billion, but that it will be transferred to a philanthropic trust to be managed by his children Susie, Howard and Peter. $1.15 billion has already been transferred to four family philanthropic foundations.
"I have nothing but the deepest admiration for Warren Buffett," says Lansberg. "I think the fact that he is transferring some of his wealth while he is alive demonstrates his sense of commitment to continuity and the appreciation he has for his children."
Berkshire Hathaway is not a classic family company. But in a family business, founders are often wary of giving the lead to an outsider. Lansberg talks about this difficulty of trusting someone else. "When I teach about this issue, I refer to Moses in the bible who led the people of Israel to the Promised Land, but could not enter himself. In the life of every leader, there is a point where they need to create the space so that the dreams and aspirations of the next generation can fill that space."
On the other hand, many family businesses have adopted as a philosophy the choice not to include family members in management, but to keep them on the board or corporate governance level. "The German consumer products company Henkel is a good example of this (the chairman of Henkel's board of directors and owner committee is a fifth-generation family member, Simone Bagel-Trah)."
"Unfortunately, there are family companies that treat board seats as if they were a natural right for family members and do not invest in training good directors," says Lansberg. "At the same time, I do believe that they have added value, if trained properly, due to their access to the company's history."
Under what circumstances, then, can family companies thrive even when the director is not a family member? Lansberg says, "The values of the director chosen have to be consistent with the values of the family. There are companies that have brought in a director with an amazing resume and great experience in the corporate world, but without a fit with the culture of the business. That is less likely to work."
The bottom line is that Lansberg has certainly seen cases where a professional manager who is not from the family has been able to successfully navigate the business. "As a client once told me: the world is big, there's a lot of talent in it, so when you're looking for the next generation of leadership for a business, it's worth looking outside and not just relying on the talent found in the microcosm of our little tribe."
Published by Globes, Israel business news - en.globes.co.il - on March 2, 2025.
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