What one famous family feud can teach us about succession and the importance of aligning next-generation values
Known as the family behind a behemoth entertainment and broadcast empire, the Murdochs appear as something of a TV drama themselves. We're going beyond the tabloid headlines to find out what this famous feud means for Rupert Murdoch's legacy and the succession of his family business.
Next Generation Published on Simple July 20, 2021

When it comes to engaging successfully with the next generation in a family business, plenty has been discussed around their priorities, changing value system, purpose drive, and involving them in the business interests. Ultimately, all of this is necessary to secure family business succession and at its core, this usually involves direct and open communication between the generations, clarity around business goals, and working towards a collective dream that can help to build alignment. However, the factors playing a role in alignment and effect engagement are constantly changing. With global interest growing in areas of sustainable development, and in particular climate change, there’s been an increase of cases that demonstrate there’s a strong disconnect between the goals and ambitions of different generations.

One recent example is the feud that took place amongst the Murdoch family

Having previously distanced himself from the family’s network for how they’d covered the role of climate change, in July 2020 James Murdoch, son of media mogul Rupert Murdoch, resigned from his role on the board of directors of News Corp. His letter of resignation stated that his decision to leave was “due to disagreements over certain editorial content published by the company’s news outlets and certain other strategic decisions.” Before his resignation, a rift in family values became evident when James publicly disagreed with News Corp’s apparent stance on the climate crisis and its link to various events, in particular, the deadly bush fires that raged in the Murdoch’s native Australia in early 2020. It’s clear that this was a catalyst for dividing the family. Fundamentally, the head of the family business often personifies the business itself, and one could easily imagine that Fox News and News Corp could be the mouthpieces of their owners. In this instance, James could be viewed as distancing himself from the family as much as the family business.

Not all next-generation values are created equal

At News Corp’s AGM in late 2019, Rupert Murdoch famously announced that “there are no climate change deniers around here“. However, actions really do speak louder than words and if anything, recent developments highlight that the necessary alignment and follow-through aren’t quite there. This might also be because Mr. Murdoch has, several times in the past, changed his position on this matter. Understandably, contradictions like this can make it even more frustrating for the different generations to find common ground.

But for the next generation, this is not just about climate change, the UN’s Sustainable Development Goals and impact investing. Strong political ties and influence by either a business or older generation can also play a major role in either aligning with the next generation or not. In a scathing 2019 New York Times investigation, it came to light that the Murdoch family played a large role in destabilizing democracy in North America, Europe and Australia. It was, however, clear the heirs didn’t agree around the power they could wield and the views their networks promoted. James, viewed as something of a liberal, want to remain politically moderate, while Lachlan, who tends to follow in his father’s conservative footsteps, wanted to lean into the unstable politics of the moment.

family business succession

Sibling rivalries can be viewed as trivial, but ultimately they depict how the family conducts itself.

The divide has been apparent for some time. From a young age, James Murdoch has often seemed uneasy with his enormous privilege, without ever rejecting it. His disillusionment with the family empire developed in the years before Lachlan emerged as heir and only deepened as the family business became more magnanimous.

Transparency and communication inside and out of the family business

If sibling rivalry isn’t enough, there are also the spouses to consider. James’ wife, Kathryn, an environmental campaigner, put her name to the joint statement highlighting their uneasiness with the company’s public views on climate change. Following the statement, she also Tweeted links to stories about investment company BlackRock putting climate change at the center of its investment strategy.

So much of what has been reported around the Murdoch sibling rivalry demonstrates how basic fundamental interpersonal challenges can lead to larger issues. Many of the dealings show there’s a difference in each heir’s approach or viewpoint, but also that there is a certain degree of underhandedness and one-upmanship. Of course, without knowing what was said behind closed doors, it’s impossible to know exactly what’s going on, but this is a perfect example of how a lack of transparency can wreak havoc on the family business.  A breakdown in transparent communication, internally between all generations, siblings, and the larger family as a whole, as well as externally between the company and the public could all play a role in driving stakeholders further apart. Another living example of this is the rift between the Royal family and Prince Harry and Meghan Markle. The fact that James and Kathryn took to airing their disappointment so publicly suggests that these internal discussions weren’t particularly successful.

Aligning the family to a collective vision and greater purpose

In any family, it can be difficult to get everyone on the same page. In a family business, especially one as prolific as the Murdochs, aligning the family, the business, various agendas and values, and getting everyone to work together is even more complex. If the matter ended with the owners and the businesses, it might still be manageable, but the discussion around next-generation also includes the consumers of tomorrow. Millennials are stepping into roles where they can make their mark, and they choose with their purchasing decisions and stand by what’s important to them. The importance of alignment isn’t only about family business succession, but also about the future of an entire organization. At the same time, it’s important to note that aligning investments to a greater purpose, is not about forcing impact but rather ensuring that investments resonate with the intentions of the families. If individual family members don’t agree with where their family invests, it is critical to raise this with those involved and to try to find common ground.

What does this mean for family business succession?

One of the biggest questions surrounding the Murdoch family feud is what this means for the business itself and who will inherit the media empire. Before James left the business, he was considered the clear heir to the Murdoch throne, but since his departure, Lachlan is considered the next obvious choice and it would appear he’s most likely to succeed his father. However, James and Lachlan aside, there are 4 other Murdoch children, all of whom could be argued as great successors. And let’s not disregard the fact that Lachlan once rejected the opportunity to run his father’s business back in 2005. When it comes to this family business, succession isn’t as straightforward as you might think. The fact that Murdoch senior has, in part, reduced the scale of the empire, most notably through the 2017 sale of 21st Century Fox to Disney, suggests he’d rather streamline operations for his successor than risk leaving anything up to chance. The media mogul is known for doing things in his own way and is anything but predictable, so the future of this family business remains unknown, for the time being.

About the Authors

Francois Botha

Francois Botha

Simple Founder. Strategy Advisor

Francois believes that the next generation of family leaders need new, simple tools and trusted experts with a fresh outlook.

Connect with Francois Botha View Francois Botha Profile

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