Dynasties: Fortunes and Misfortunes of World's Great Family Businesses

Brilliantly insightful and extremely witty, Dynasties outlines 13 business dynasties who have managed to remain rich and powerful for generations. It is written by David Landes .The book starts with the observation that majority of the large companies are family owned businesses and goes on to argue that the world needs family businesses for its own good. The 13 dynasties covered by the book span across Europe and Americas with the only exception of the Toyodas who are Japanese.  The book enables us to witness the heights of achievements that man can reach through sheer hard work, ingenuity and dedication. But with great fortune comes great distractions. We repeatedly witness the later generations of these dynasties succumb to the temptations of fun and frolic, extravagance and the opportunities to have celebrity playmates ultimately leading to the decline and downfall of these hugely successful empires.

The 13 dynasties discussed in the book are spread across three main industries-
•    Banking covering Barings, the Rothschilds and the Morgans.
•    Automobile which takes us through the journey of Fords, the Peugeots, the Renaults,  the     Toyodas and   the Agnellis
•    Mining where you come face to face with Guggenheims


Common threads that Unite them all!

We see a lot of common themes and phases in the journey to success, across all the dynasties. Similar factors that made them successful and some others that made were their limitations.

Humble beginnings

Almost all the dynasties had extremely humble beginnings. The founders came from poor backgrounds and had modest means. Yet what set them apart was their hunger for success and their dedication. So we see Natah Mayer of the Rothschilds slogging away in his single minded pursuit of making money. We meet the ever resourceful JP Morgan and witness the ingenuity of Henry Ford. We see how Sakichi Toyoda relentlessly improved the power looms making them competitive till he gave his son the challenge of making a world class automobile. We come across Rockfeller who combined hard work with remorseless business acumen to become one of the richest men in the world and then there is impeccable foresight of the Guggenheims to spot an opportunity in copper right in the middle of the great gold rush.

Tenacity

Tenacity in the face of adversity is the common motif across all the dynasties. Many of these dynastic enterprises profited greatly from the two world wars. The banking dynasties made money by lending to the war ravaged governments, the auto companies by making vehicles specially suited for war efforts and the mining dynasties by increasing mining of iron and steel for weapons. Here we witness the wonders of the ingenuity of these dynasties. TheToyodas used wooden bumpers on trucks as there was an extreme shortage of materials. Did you know Henry Ford went on a peace mission to Europe to stop the great war and when that failed , he profited greatly by shipping his vehicles to the war torn continent to aid the war! On the other hand, Rockfeller broke the bargaining power of the rail road companies by joining forces with other oil companies

Family matters

 All the dynastic enterprises are about family first and business later. The baring brothers helped their younger brother Charles who had a penchant of getting into financial trouble. We see the Rothschilds marrying among themselves to keep outsiders out of the family. Andree Citroen, when shunned by banks went to his family who helped him financially to start a business which would later grow into an amazing success story . We hear the sad story of the Wendels cobbling up finances to take control back from the French govt when their firms were nationalised, an effort which was fuelled more by an emotional connect than any sound business logic. The book also touches upon the negative aspect common across most of the dynasties which was reluctance in allowing the female family members taking an active part in business. One can only imagine how much more profitable these dynasties would have been had merit presided over gender while choosing an heir.


Marriages for Alliances

Almost all the dynasties chose marriages as a path to improve their social standing. This holds truer in Europe where nobility was given a higher status than wealth acquired through enterprise.

Interesting Anecdotes

The book is filled with interesting anecdotes that make it even more interesting because of the witty tone of the author. You as a reader will get a feeling as if you are chilling in a café talking to a man bubbling with interesting stories. For example, the anecdote of Nathan Rothschild’s terse reply to a haughty peer of the realm. Picture Nathan Rothschild early in his career, toad-like in appearance, hard at work at his London desk. A peer of the realm is brought in. Nathan intent on his ledgers invites him to take a seat. Offended, the visitor boasts about his high standing. “Take two seats” Nathan shrugs.

Or the anecdote of the meeting of Andrew Carnegie and JP Morgan aboard a ship. Andrew Carnegie had sold his steel business to coalition of JP’s and Andrew confessed that maybe he should have asked for a hundred million more, to which Morgan gave a put-down reply: “ And you would have got it”.

Another incident where Philippe Rothschild is boasting of his sexual appetite and saying “ I fell in love eight times a day”.

The Takeaways

The book with all its interesting anecdotes and insights of dynasties doesn’t fail to deliver some important lessons to the keen reader. Following are the lessons that we think one should do well to remember:

1) Your children are your biggest assets

Invest in your kid’s upbringing and make them responsible. Edsel’s untimely death because of Henry Ford’s strict parenthood and constant nagging is a grim reminder that your children are your most valuable asset. The Toyodas could make a world beater car precisely because it was the dream of a father who invested in the upbringing of his son and made him capable to achieve that dream. The Citroens were one smart family with a special emphasis on children’s education.

2)    Don’t hesitate to bring in the specialists

As the business grows every family has to strike this fine balance between ownership and control over day to day operations. The Agnellis with their egalitarian outlook are the best case that we witness as against the Fords who paid heavily by making wrong judgements owing to two main reasons- by not encouraging merit and by wrong choices of men at important positions

3)    Be Frugal

Frugality and financial discipline are the hallmarks of any long term sustainable wealth. Fortunes are built and demolished on this aspect.

4)    Money gives freedom, act free

The book gives an insight into the prevalent social norms in Europe and America. In France, there was always a superfluous pursuit of status over wealth (the country did pay heavily for this twisted tendency). If money gives you the freedom and autonomy to stand against the prevalent norms, don’t hesitate!

This is one of those rare books that should be read by every man/woman of enterprise. It is like a case study of 13 families outlining their ingenuity, their follies and their spirit of creating wealth that lasts for generations. We highly recommend reading this book 

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