The Ferrero empire and the unforeseen crisis

A lesson on building a second management echelon

My professional insights · Lyudmil Karaulanov · 5 min read

Published: 16 October 2026 · Version 1.1

Every business organisation is exposed to the unpredictable risk of a sudden interruption of the management process. The important question for its resilience is not only about distant generational planning, but about fundamental operational readiness: what happens to the company if the key leader suddenly drops out of the operational field. The historical case of the Italian confectionery empire Ferrero raises the question of how available management capacity allows a large business to continue after a sudden loss. This lesson is an opportunity to apply the concepts of the analysis “When one person holds the whole business: the architecture of replaceability and the second management echelon” in the section Succession and generations.

The Italian company Ferrero, built and developed by Michele Ferrero, applied for decades a model of high centralisation and strict family confidentiality. The company is known for its world-famous brands, but also for its traditional approach in which the family holds the key to strategic management. In many similar companies such centralisation creates a single point of critical failure, in which all operational resources, commercial contacts and financial access are concentrated in one or two people.

The test came in April 2011, when Pietro Ferrero, Michele’s son and joint chief executive of the group, died suddenly in South Africa. By then he and his brother Giovanni were already sharing the management, with divided areas of responsibility and joint decisions. The organisation therefore did not start looking for a successor from scratch. [1]

Giovanni took over the leadership after the loss of his brother. The company’s public history confirms the continuation of the business, but does not prove that “not a single day” was lost, nor does it allow the whole result to be attributed to a specific contingency plan developed in advance. It is more accurate to see the importance of the available management experience and of the existing organisation.

A more clearly documented step followed in 2017. Giovanni became executive chairman with a focus on long-term strategy, and Lapo Civiletti, an experienced in-house manager from outside the family, took on the role of chief executive. The announcement of the change also describes the allocation of functions and committees. In this way family strategic leadership and professional operational management received clearer boundaries. [2]

The analytical lesson for every owner of capital is clear. Replaceability and a second management echelon look like a personnel cost only until the real price of their absence in a sudden crisis is calculated. A resilient business does not require every manager to have an identical duplicate, but ensures that every function, piece of information and access critical to survival has its institutional continuation.

For the owner, the first task is to distinguish emergency substitution from long-term succession. A temporary absence requires powers that take effect immediately, access to contracts and the ability to make payments. A permanent withdrawal also requires a decision on who appoints the new leader, who evaluates him and which strategic questions remain with the owners.

A useful test is a simulation of thirty days without the key person. Can the team run the payroll, service a loan, solve a problem with a major client and approve a necessary expense? The gaps are described by function, not by personality. This is how the second management echelon turns from a list of promising employees into a proven capacity to act.

The family owner is not obliged to give up strategic influence in order to build replaceability. He must, however, give managers real decisions and evaluate them against results agreed in advance. If every action awaits his informal confirmation, formal delegation remains untested.

Where is the point of instability?

What this concept means →

The point of instability arises when personal authority is mistaken for functional security. If knowledge, access and relationships are locked in one person, the deputy by title may prove unable to act. The opposite risk is appointing many leaders without clear boundaries: duplicating titles creates cost and conflict, but not necessarily continuity.

This material is of a general analytical nature and does not constitute individual legal, tax, financial or investment advice.