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The ATF case is a succinct opportunity to explore the many special features of leadership succession for a family business. In 2009 the company was passing the baton to the oldest of three sons in the second-generation family business.

ATF produced metal and plastic fasteners for, primarily, the automotive industry. ATF had grown into a company with more than $50 million in annual revenues. The company had grown in large part through alliances with other family businesses around the world. First-generation patriarch Don Surber had led the company since he acquired it in 1982. Don was known for his charismatic leadership style and his focus on driving value through a network approach.

The case traces the career paths of all three sons and looks at the succession through the eyes of the oldest son, Jason Surber. The elements, constituents, and challenges of succession are evident. The fundamental insight is that business leadership succession is far more than just passing the business leadership baton. It also requires attention to the family, the board, the whole system of external stakeholders, and the future of ownership.

The epilogue in this note covers the period from 2009 to 2012 by describing what Jason did to earn credibility, to incorporate his brothers, and to define his personal leadership philosophy and style. The epilogue thus provides students with an opportunity to consider and define their own personal philosophy of management leadership and their own style. They will see the art of melding styles from the past with their own for the future.

In mid-2012, after successful years in large public companies and obtaining an MBA, middle daughter Jen, 32, is trying to decide whether the time is right for her to enter her mother and sister's small family business to grow it further. Destira, Inc. was a designer/manufacturer of gymnastics wear for girls, headquartered in California. Donna Levy founded the company in 1990, after years of making leotards for her three daughters, who were competitive youth gymnasts, and getting requests from other parents to make the garments for their own children. In 2005, when Donna's oldest daughter, Jodi, joined Destira, Donna gave her a 50 percent equity stake. Between then and year-end 2011, the pair grew the revenues from $550,000 to $1.06 million, increased the number of outlets carrying the brand, upgraded the internal accounting/operations software, and added an online direct-to-customer retail business. The case shows realistic considerations for the individual, family, and business when evaluating whether or not to commit to join the family enterprise.

In early 2014, recent Stanford University graduate Tyler Shultz was in a quandary. He had been working at Theranos, a blood-diagnostic company founded by Elizabeth Holmes, a Stanford-dropout wunderkind, for almost a year. Shultz had learned enough about the company to realize that its practices and the efficacy of its much-touted finger-prick blood-testing technology were questionable and that the company was going to great lengths to hide this fact from the public and from regulators.

Theranos and Holmes were Silicon Valley darlings, enjoying positive press and lavish attention from potential investors and technology titans alike. Just as companies like PayPal had revolutionized the stagnant payments industry and Uber had upended the for-hire transportation sector, Theranos had been positioned as the latest technology firm to substantially disrupt yet another mature sector: the medical laboratory business. By the start of 2014, the company had raised more than $400 million in funding, and had an estimated market valuation of $9 billion.

Shultz's situation was exacerbated by the fact that his grandfather, the highly respected former US Secretary of State George Shultz, was on the Theranos board and was one of Elizabeth Holmes's biggest supporters.

But Tyler Shultz worried about the customers he was convinced were receiving highly unreliable and often inaccurate blood-test results. With so much at stake, Shultz wondered how he should proceed. Should he raise his concerns with the firm's investors? Blow the whistle externally? Report to industry regulators? Go away quietly?

This case and its subsequent four brief follow-up cases are based largely on interviews with Tyler Shultz, and outline the dilemma he faced and the various steps he would take both to extricate himself from his unsavory position and let the public know the full extent of the deception at Theranos.

Five optional handouts are available to instructors to further discussion after the case has been debriefed. The handouts serve as additional decision points for the students if your class time permits.

The case includes theoretical references to family business, organizational culture, resource-based value and leadership.

The case combines primary and secondary data. There is ample public information about Martin Guitar including histories of the company and its instruments. These were used for background. Primary data were provided by the company in the form of customized data and interviews.. The case writer has served Martin Guitar as a consultant and also plays Martin instruments. The case writer had numerous opportunities to interview Chris and his key lieutenants.

In 2019, C.F. Martin IV (Chris) was in his fourth decade leading one of the America’s oldest family-owned companies, C.F. Martin & Co., Inc. Martin Guitar is a globally known maker of fine guitars that are prized by collectors, working musicians and amateur musicians. Chris was raised in the family business and took on the CEO’s position at the age of 30. The case describes the company’s management practices and the culture that has emerged from them. In 2019, at age 64, Chris confronted issues faced by his predecessors over multiple generations: how to prepare the company for succession, and maintain its strong performance as a family-owned company in a dynamic industry environment.

The case is designed for a management course for upper-level undergraduates.

The case, while acknowledging the difficulty of managing a family business in view of the accompanying human issues, emphasizes that sound business practices and procedures, and clarity with regard to the goal, remain the key; a firm is a complex, interconnected system and management needs a systems viewpoint; and technology can only support underlying business processes if there is clarity with respect to these.

SomPack had survived low-cost Asian competition starting the mid-1990s, a revolt by some extended family to try and bring it down with the help of a competitor, the Turkish banking crisis of 2001, and the global economic crisis of 2008 all the while watching its suppliers, competitors and customers collapse. A focus on cost-cutting and internal discipline by the successor, who had been promoted to CEO in 2004, had exacerbated internal discontent somewhat and had led to issues with production planning, but everyone understood that times were tough. Several large customers who had left were asked to return because the alternatives had been worse. By 2012, SomPack was considering expansion into new products in collaboration with its international partners. Then one day, in July 2013, it suddenly collapsed. Could the entire approach have been wrong? What should management have done instead?

Undergraduate, graduate business management.

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CSS 7: Management Science.