A billionaire with no master plan for his family business
Bertil Hult is no fan of conventional wisdom. A severe dyslexic, he left school at 16. After the Swedish bank where he was a runner insisted he travel to London to work and learn English, Bertil realised it was easier to acquire a language through experience. He restarted his formal schooling, only to quit university at 23 after founding what became EF Education First, the global educational travel and language training group.
Bertil organised his first group tour to the UK in 1965 for just 33 students and two teachers. The private company declines to reveal revenue or profit growth, but EF now has 52,000 employees in 612 offices in 114 countries. Forbes puts his net worth at $6bn.
At 78, Bertil is semi-retired. But the founder, known as a hard-driving boss in his day, is adamant that he will not entrust the running of the complex multinational to professional managers alone: “A family business, at least the sort of business we have, should be run by the family [or] at least one family member. Otherwise, it’s better to make it a public company.”
The family, though, like the business, has multiplied; so have the complexities of succession and inheritance planning.
Bertil has four sons. He once assumed they would all work at EF. “All four of us were going to do our part and we were going to love it, because Bertil loved it,” says Edward, known as Eddie, sitting alongside his father in the group’s Zurich office. “It was a pretty good plan,” recalls Bertil, his Swedish accent a contrast to his son’s American one. “You tried for a few years [but] I think none of us really bought into it completely,” the younger man points out gently.
Max, 37, now a film-maker, ruled out working at EF early. Philip, 49, and Alex, 44, did join, though the latter has stepped back from the group lately. Edward, now 41, described by his father as a patient listener and a good explainer of complicated ideas, joined EF later. Currently chief executive for North America, Edward is set to become chief executive of the whole group alongside strategic-thinking Philip as chair. This simple-sounding outcome belies the work the family has put in.
Bertil only started to think about what would happen next in the 1990s. There was no family summit. Addressing his father, Edward says: “I think the way you work is not that you plan, necessarily. I don’t think EF was built by some master plan.” Instead, Bertil “has an incredibly strong gut and intuition what the right business decisions are”.
Edward set out on an academic career, until he realised he enjoyed the teaching more than the research. In 2011, his brother Alex offered him the chance to run Go Ahead Tours, an underperforming tour business for adults, to see if he enjoyed being part of the family company. The opportunity was “low risk, high reward, because [Alex said] ‘We’ll just close it if you mess it up. And if you figure something out, we’ll keep it’”. Go Ahead flourished, EF kept it, and kept Edward, too.
Initially, he struggled with imposter syndrome. “I know you never take a new graduate student, no matter what degree, and stick them as a president for a company that has 100-plus staff members, if they’ve never really worked a day of their life besides some internships and some other side jobs during school.” Edward made a point of working with different teams and encouraging open communication.
In 2014, Philip suggested the three older siblings and their father should enrol on a week-long Harvard Business School course for family entrepreneurs. It made them appreciate the future was “much more complicated than we thought”, says Bertil. Edward is even blunter: “We realised we really had no clue what needed to be done.”
The Hults enlisted HBS to give tailored advice, bringing Max into what was sometimes a heated discussion. “Most families who have big companies are probably not the easiest to work with,” says Edward. “We’re not an exception.” They accepted they needed clearer rules to govern family members who worked for EF. They also now acknowledge the need for a next phase for “generation three” — Bertil’s 13 grandchildren, the oldest of whom is just turning 18. The Hults learnt, for instance, that it is the third-generation’s spouses that tend to cause problems, because, Edward says, “they’re thinking about their kids” and not the wider family they married into.
Edward says that in due course the Hults will need to answer basic questions such as, “how do you get a job?” with EF as a third-generation family member or spouse, “how do you progress; how do you get promoted; who has the right to promote you; how can you get fired, can you get fired?”
“It’s a challenge,” says Bertil, the billionaire with no master plan. His own legacy, though, seems assured. EF is an international brand, official partner of the 2020 Tokyo Olympics and sponsor of a top professional cycling team. The family name is now attached to the Hult International Business School, which runs as an independent organisation.
Yet commercial pressures abound, some caused by EF’s success. For years, Bertil interviewed every job candidate himself; last year, though, there were 450,000 job applications, now handled by a network of hiring managers.
The tide of globalisation that helped to lift EF has started to ebb. The responsibility of taking young people out of their home countries and keeping them safe and happy is complicated by everything from immigration controls to terrorist threats. “If you are in the car industry,” says Bertil, “you can call back the [faulty] car to repair it . . . if you’re in the furniture industry and something breaks, you can repair it. We can’t. We cannot make any mistakes, ever.”
Edward says: “Bertil always used to tell me — which I didn’t really understand until I got older — ‘It’s not about having great ideas, it’s about knowing what great ideas to say no to’.” As befits a future chief executive, he paints a positive vision of EF’s future, based in part on the continuing need to tackle biases about culture, religion, behaviour and nationality by bringing people together. “I see lots of opportunities,” he says.
Three questions for Bertil and Edward Hult
Who is your leadership hero?
Bertil: This hasn’t come to mind. I don’t think I have or have had one.
If you were not a CEO/leader, what would you be?
Bertil: I would have loved to have become an architect, but my high school grades were not good enough for me to get into architecture school.
Edward: At one time, I thought I would love to be a teacher. I am not sure what exactly I would be, but it would be fun to do something that would keep me outside in the field and more active.
What is the first leadership lesson you learnt?
Bertil: When I had just started EF, I only had one employee, my assistant Else. One day the phone rang, and I whispered to Else, “Say I am not here at the moment.” After that she got red in the face, and when I asked her what was wrong, she said, “Bertil, that was the first time I ever lied”. It made me think I should never ask anyone to lie for me. I promised that to myself, and it is a promise I have kept.
Edward: Keep things simple.