"It's not personal, it's business." This is an adage I've heard many times in my work, and no doubt you've heard it, too. But it rarely applies to family-run businesses—especially when talk of future planning begins. That's because, for family-run businesses, business is personal.
I had a recent experience that emphasised this. A founder of a very successful business wanted to meet to talk about future planning of his business. Within a few short minutes, our conversation shifted away from business and became centred on family: his hopes, fears, worries, aspirations. Building his enormously successful business felt easy when compared to the overhanging task that lay ahead of transitioning his success to the people that mattered more to him than anything else in his life.
The transfer of control from one generation to the next—or when selling to an outside party—is a potent cocktail of emotions and feelings amongst all the stakeholders: fear, anger, entitlement, resentment, worthiness, expectancy take root and, left unattended, can suffocate any planning process.
Families are emotional systems. It follows that no family business is immune to the emotional implications to which planning for the future gives rise. That's why it's essential that all family business continuity planning not only recognizes the feelings that can surface but also creates the space for these feelings to be talked through and managed in a productive way.
What to expect
Attitudes toward continuity can vary among generations. First-generation founders, for example, rightly feel a powerful and very literal sense of ownership. After all, they've invested a significant part of their lives into growing an organization that provides livelihoods for their families, their employees and the families of their employees. Their identity is closely tied to what they've built and they are often reluctant to separate their name from its legacy. This is a common and understandable sentiment that can prevent many from relaxing direct control of the business and allowing someone else to continue their good work.
Issues of trust can also set in. Paradoxically, the first generation often uses the financial resources they've built to shelter their children from the hard work and failures that have contributed to their success. Such sheltering from hard knocks deprives their second- and third-generation successors of key lessons and, as a result, the first generation may inadvertently keep their children at arm's length from the leaders' table, effectively delaying the transfer of knowledge and skills that would otherwise prepare them for more consequential roles—and a full continuation of the legacy.
Tensions can also run high among the second generation and their own children. It's common for rising generations to feel obligated to emulate the founders. This can drive unhealthy levels of overcompensation and competitiveness and, when feelings of inadequacy cannot be quelled, sometimes to disengage altogether. Such behaviours are often detrimental to the business and can derail or delay meaningful continuity planning where all stakeholders engage.
Stressed support systems
The stress of planning can extend beyond the walls of the office and inheritors. Non-financial spouses, for example, are often stretched thin providing emotional support to both their first-generation partners and their second-generation children. In many cases, they are leaned on to guide their partners through the stress and fear that comes with surrendering a life-long post while, at the same time, support their second- and third-generation family members who face their own set of anxieties.
Tensions can arise between those siblings and extended family members who aren't part of the business and those who are. Envy and resentment go both ways: some might be jealous of those who are getting opportunities they feel were denied them and, conversely, those in the business can feel they carry an inordinate burden and envy the seemingly easeful, burden-free life of their non-business siblings or cousins.
Once more, with feelings
When it comes to discussing the future of a family business, emotions can run high. Managing them means acknowledging they exist, that they are natural, and keeping them in full view throughout the continuity planning process. This requires open and consistent dialogue, ongoing feedback from all parties, and unbiased perspectives that can help family members find common ground.
Remember that no plan is perfect. Feelings change, priorities clash, and there will always be unforeseen circumstances requiring thoughtful consideration best borne from proven strategies, not personal reactions. Again, taking steps to listen for—and allow space to express and manage—the feelings that can enter the mix will go a long way to keeping families on the same side through this important yet inevitably emotional journey.
Because of the complexity, families who are successful at their continuity planning balance their heightened emotional system with non-emotional, independent sources of support who can serve as trusted and impartial guides throughout every stage of the process.
Want to learn more? Keep an eye on this space and let's talk.