By Kathy J. Marshack, Ph.D., P.S.
Forty year old Cathy has worked in her family’s restaurant business for 25 years. Her older brother Charles has done the same. Both have matured with the family business and seen it grow from one restaurant to five. Cathy’s parents, the founders are nearing retirement and want the business to carry on under the care of their children. Cathy and Charles are ready and well trained (both on-the-job and college degrees) for succession. They work well as a team so there is no competition for leadership. Where’s the problem? The problem is the youngest son, Brian. At 35, Brian has never worked in the family firm, preferring to try his hand in other ventures. Unfortunately everything Brian has tried has failed. Always there to help, Cathy’s parents have “bailed” Brian out of one jam after another. Now as they face retirement, the parents want Cathy and Charles to hire Brian and to share ownership and management of the family business with him! Needless to say Cathy and Charles are beside themselves with frustration and fear. They don’t want to offend their parents. After all, without their parents neither Cathy nor Charles would be in the fortunate position of owning a thriving business. However, Brian’s inexperience, lack of maturity and questionable work ethic may cause considerable problems in the business. Neither Cathy nor Charles relish the idea of taking care of their brother indefinitely as their parents have done. This type of problem is all to common in family-owned firms. Being a parent is the single most important job in anyone’s life. Most of us cherish this responsibility and we are very reluctant to give it up when the children leave home. In family firms where children may never leave home, the parenting role may continue indefinitely. In Brian’s case, this appears to be true. A parent’s job is to nurture and protect children so that they can grow up healthy and capable of independent adult life. But parent’s don’t teach independence directly. Independence is a state of mind that children must conquer for themselves. All cultures have growing-up rituals which affirm that the child has reached a stage of maturity wherein they must accept adult responsibility for their actions. The Bar Mitzvah is a religious ritual acknowledging that the young Jewish boy is now responsible for his own spiritual development.
Most American sixteen-year-olds get their driver’s license, which is a type of ritual acknowledging that the teenager is fully responsible for their driving behavior. But just because a child has gone through the ritual doesn’t mean they have made the cognitive leap to mature thinking. In a way, the Bar Mitzvah or the driver’s license is really a license to begin learning to be an adult. To be responsible for all the mistakes one makes on the way to adulthood is the real test of maturity. Parents in family firms sometimes interfere with the growing-up process by being just a little to ready to rescue their progeny. Sometimes Mom and Dad fight over the child because one doesn’t want the child hurt and the other wants the child to face their mistakes. Alternatively the child may be making a bid for independence but the parents thwart it. On the one hand parents complain that their grown child is not very strong or capable of leadership. Then on the other hand, they complain when the child speaks up for himself. One grown son complained that his father would “micro-manage me.” The son carried the title of manager of one department in the family firm, but his father really never let him run the show. And to add insult to injury the father would stop by his son’s house almost daily to advise him how to take care of the son’s family and home. The father’s complaint was that the son “never listens to me.” In a fit of frustration the son quit the company, moved out of state and went to work for a competitor. But within a year he left the job and returned to his father’s company. His bid for independence had been crushed by father’s lack of support. Yet in other situations siblings give each other a hard time. If one child makes a bid for independence by leaving the family business, a sibling who is staying behind may become resentful if the parents are just as helpful to the departing child as to the one left behind. Also family members can feel as if the child who is leaving is breaking family ties and therefore not very loving. In order to acquire that state of mind that makes us an independent adult, a child has to prove him- or herself in the world.
This proof often comes by leaving the parental home and conquering one’s fears about being self supporting. Many CEOs of family firms had no one helping them getting the business off of the ground, so they had ample opportunity to prove their adulthood. But what of their children, who have never had to look for a job? Some children can acquire maturity while working for their parents, perhaps by going off to college. But for most children they will have a very difficult time developing the strength of character required to run a business if they have not had preparation through the “School of Hard Knocks.” If this sounds cruel, think for a moment about where your greatest lessons in life came from. Chances are you grew the most and gained the greatest confidence from conquering the impossible tasks that no one else could do for you. There are a variety of strategies for ensuring that the second and third generations in family firms really grow up. The strategy that fits for your business depends upon the business, the parent’s skills and personality and the skills and personalities of the children. In any case the child needs an environment where they must prove themselves capable of leadership in the family business. For some this means leaving the business for awhile and working elsewhere. For others, it means getting a graduate education before returning to the family business. Another child may benefit by working their way up from the “mailroom” with no preferential treatment from the parents. Finally, some children will be better family members and more capable adults if they never return to the family business. There are two goals in family firms. One is to develop a thriving and competitive business. The second is to develop healthy independent mature adults who can contribute to society. It would be very efficient to accomplish both goals within the framework of a family business, but this isn’t always possible. And these two goals are not mutually dependent. Keep in mind that the business can be successful without the child and the child can be successful without the business. That is, set your sights on accomplishing both goals independent of each other, and you may be surprised how they come together in the long run.