“As ye sow, so shall ye reap”
Recent conversations with other family business advisers confirm increasing exposure to business families with serious “fossilisation” issues.
Naming no names, the problem seems most prevalent in families with seriously aged founder/owners (70 and 80-year-olds) from traditional European backgrounds. However, they don’t own all of this space – it’s also happening in traditional Asian and “ordinary” Australian families.
The usual scenario is:
- Parents have created a successful, or very successful business, from nothing and mainly through their own hard work and talent.
- The business is like another child in the family, and often appears to be the entrepreneurial founder’s favourite child.
- If forced to retire against their will, the Founder is likely to pine away and die quickly.
- Children have been brought into the business on the promise that one day it will be theirs. The children (now in their 40s, 50s or even 60s) may have joined at a very young age, or may have come in after obtaining professional qualifications and some years of external work experience. The point is, they chose to enter the business – either by being enticed, bribed, forced, or threatened. Whether or not the choice was made of their own free will is not a significant issue for the purpose of these observations.
- The parenting style has created a sense of dependency and obligation to family. Remuneration does not bear any relation to market rates or value of contribution to the business. Much of the children’s lifestyle has been funded by the parents, either directly or through the business, in terms of buying houses and cars, paying school fees, providing holidays, and covering many other expenses.
- Father is usually a street smart, nuggetty entrepreneur. He favours and supports children who are competent and businesslike (left brained) like him, and sycophants who stroke his ego. He doesn’t have good emotional skills, or has learnt to suppress whatever skills he does have through his endless struggle to build and sustain the business.
- He has usually spent a lifetime telling himself, and everyone else, that everything he’s done, he’s done for his family. He rarely, if ever, seeks agreement or approval for this but gets really cranky when he doesn’t get validation and thanks for doing it.
- Mother may or may not be commercially minded, and may or may not be emotionally sophisticated and family-oriented. I suspect we don’t get to see those families where mother provides the emotional cohesion needed for the family to function properly as a family, and where she gives the emotional support her children need to grow up sound of heart and mind, and to be able to function as resilient adult individuals – especially after growing up under the long dark shadow cast by their entrepreneurial fathers.No, the problems arise when mothers seek to support their weaker progeny who, from an early age, have been profoundly denigrated and disempowered by their fathers and propelled into hopeless competition within their more competent and confident siblings (shades of Spartan hillsides!).
- We then have an ugly cross-hatch of conflict lines afflicting the family: sibling to sibling; father to weakling; mother to strongling; father to mother; and finally – some or all family business members to family members outside the business. This last group may be strongly inclined to avoid, deny, sympathise, pity or pontificate on what they see going on within the family, and within the business.
- The aged parents become increasingly fossilised, meaning they are less able to act wisely and decisively, as they get older. This can lead to more avoidance and denial, which they express as: “it’s all too hard, they’re ungrateful for everything we’ve done for them, I’ll be dead soon and they can sorted out for themselves”.
- The weak child/children don’t have the ability or motivation to get anything resolved for themselves, so they hide behind mother’s skirts, and block any attempt to resolve the situation, either in the family, or in the business. These guys are at huge risk of their lives going completely pear-shaped once their parents (protectors) have gone as they have little to no emotional resilience; take little or less personal responsibility for their own outcomes; resent their stronger / more successful siblings, and try to rely on undocumented promises made by dearly departed mothers – promises that every other family member is almost bound to oppose.
- The strong child/children make multiple attempts at saving the business, which are often going backwards as a result of years of under-investment by controlling parents who are either unaware, or afraid of, progress and modernisation, and who are more into preservation than investment-style thinking. They usually end up fighting both parents: Father is averse to anything that could erode his autocratic / idiosyncratic power base (eg: modern business management systems) and mother opposes anything that could place her weak, dependent child/children at risk of embarrassment or expulsion from the business due to an objective assessment of their lack of ability or value.Is there hope?
Probably not much!
Family and business are both doomed unless somebody within the family finds the courage to take the risks necessary to change the game – and does something with that courage. The problem is that their years of conditioning as a compliant dependent are compounded by the real risk of being cut out of everything by an aggrieved, fossilised parent, if they do take a firm stand.
When the parents die, if the business (and their fortune) survive that long, there’s a good chance their estate will get caught up in legal battles until it’s bled dry. The family’s legacy then gets transferred from its next generations into the waiting arms of its legal advisers, while the long-suffering second generation is left bitter, twisted and destitute by the collapse of everything around them.
The situation is like a stage 3 cancer in the family, and in its business. It’s operable, and operation worthy, but only if the family takes the decisive and painful medicine required to save its life. Many families lack the energy, will, courage or fear required to spur them into action. Sadly, the cancer gets them.