After years of advising entrepreneurial partnerships and family businesses – often working collaboratively with their financial and legal advisors – it continues to be puzzling: why don’t they plan adequately for succession when it makes no rational sense not to?
Well, the short answer is: because it makes a-rational (and sometimes irrational) sense not to. But only by addressing the psychological and emotional issues everyone would rather avoid can rational decision making rule the day. What are these issues that – unresolved – spell DISASTER? With thanks to the research and in-the-field expertise of my colleagues, present and past, I offer my own take on the founder and family issues to consider. A primer:
D eath –
- The Founder: “I’m gonna live forever” attitude – or s/he simply doesn’t want to face her/his own demise.
- The Family: Taboo to talk about mom/dad’s death, not to mention life afterward?
I dentity –
- The Founder: “Who am I without the business?” S/he fears loss of identity, which is bound up with the company s/he created.
- The Family: They worry about the Founder without the business – and the business without the Founder.
S upremacy –
- The Founder: “I’ve still got what it takes, they won’t know how to run this company without me.” S/he doesn’t want to relinquish power and control.
- The Family: How to wrestle with the head of the family about a different vision for the firm’s future, when s/he is still the one in control.
A mbivalence –
- The Founder: “Of course I want my kids to take over.” But s/he somehow undermines that process…
- The Family: The next generation want to take over, but feel guilty about pushing mom/dad out. And the spouse may both want and fear retirement.
S olo act –
- The Founder: “I’ll figure it out. I’ve done fine this far, with no one helping me.” Getting professional help is seen as a sign of weakness – or a waste of money. Or time, for someone who’s more of a doer than a planner.
- The Family: Having always relied on, leaned on the Founder, they don’t want to face the realization that s/he cannot just ‘take care’ of this, too.
T ime –
- The Founder: “Not now. They’re not ready yet.” It’s never a good time. And then there’s the heart attack, or buyout offer…
- The Family: The next gen are dealing with the stresses related to adjusting to adulthood: becoming independent, having their own children, marriage (divorce); the spouse has his/her own concerns.
E motions –
- The Founder: “I can’t deal with all that emotional stuff.” Jealousy, rivalry, quarrelling, choosing among the children: all things better (easier) ignored.
- The Family: Jealousy, rivalry, quarrelling, choosing sides: all the old, unresolved issues flare up – and new ones show themselves.
R oles –
- The Founder: “So what would I do if I’m not running the business? Play golf all day?” S/he does not see a future that works once s/he steps down.
- The Family: Change affects everyone in the family, and in different ways. And everyone in the family copes with change differently.
What to do ? What helps? To be continued …
Copyright © 2013 Marlin S. Potash, Ed.D. All rights reserved.