By Dick Haney
Succession, or as some call it- Sucksession, the silent killer of small business, is potentially the Ebola disease of family business longevity. I am going to approach this topic from a different number of directions over the course of a number of weeks. This topic will be analyzed and dissected from the human, social and environmental aspects. I will be using the four stages of business, the wonder, the thunder, the blunder and the under as a backdrop to look at this tremendously important but much neglected issue that all families must confront and deal with at some point in the life of any family business. This is a huge issue in Agriculture but it is the issue that always makes its way to the bottom of the business and family agenda. Too many families don€™t want or don€™t know how to corral this wild issue. It is possibly the most complex issue facing Agricultural business today. But like death and taxes everyone will have to deal with it at some point in time. It is my hope and desire that by writing this set of articles it may help and aid those who are struggling with this most potentially divisive issue, this killer of business and families.
I think it might be useful to examine this topic as if it were a bad movie. If this was the autobiographical account of your family€™s succession saga how would you describe it? Would it be a love story, a horror story, an adventure flick or a murder mystery where the victim is the family or the family business? As with any movie there has to be a plot, characters to play out the action, and an ending. On second thought, maybe I shouldn€™t call this a movie but instead a Soap Opera. And better yet the title of the Soap Opera should be changed in many cases to Succession Saga- The Never Ending Story. I am reluctant to compare the saga of succession to a Soap Opera, but for any that have been involved in one of these rodeos, the comparison may not be too far off the mark. In this the first installment, I want to examine the characters who are participating in the drama. There are a number of major characters, as well as those who play some minor roles, but in this drama there are those that play both supporting and non supporting roles. Let€™s take a look at the cast:
Dear old Dad, that Dr. Jekyll and Mr. Hyde character and I quote from Robert Louis Stevenson€™s book:
“With every day, and from both sides of my intelligence, the moral and the intellectual, I thus drew steadily nearer to the truth, by whose partial discovery I have been doomed to such a dreadful shipwreck: that man is not truly one, but truly two.”
– Robert Louis Stevenson, Dr. Jekyll and Mr. Hyde, Chapter 10
Dear Old Dad €“ The Magnificent
Dad stars in two roles in this drama, and he potentially plays the part of both hero and villain in each role at the same time depending on your view point. His first role is that of head of the family. He fulfills his patriarchal duties in providing his family with the first three levels of Maslow€™s hierarchy; food, clothing and shelter are the basics of any family life. Before I get accused of being a chauvinist pig, for the purposes of this discussion you must allow me to use ancient traditional descriptions as I don€™t want to use he/she every time I refer to someone. Perhaps your family is matriarchal based. If in fact that is the case please just superimpose those words and descriptions where they are most applicable. In your family it could be a combination of Mom and Dad, or just Mom or Dad, but for the purposes of this thesis I will use Dad as the generic term for head of the family. Dad also has tremendous influence over the goals and objectives that the family holds dear. He is a kind, understanding fellow that is a big picture guy that wants to see all members of his family self actualize and be successful. He is the guy that provides moral guidance, helps with the homework, goes to the baseball games and provides positive reinforcement for his entire nuclear family. He is Dear Old Dad the family man.
Dad€™s other role is CEO of the family business. This role goes hand in hand with Dad the family man, as he is striving to be successful for the good of all. He sets the goals and objectives for the business and they are singular in nature. His goals and his families€™ goals are in sync. This is Dad in the wonder stage of the business cycle. He works hard all day to make the business successful and all night to be a good family man. He loves his work and his family and blurs the line between the two. All for one and one for all is the mantra. He is the one that has the Gold and so he makes the rules. This Dad character is a real Chameleon. He is a very complex person. He many times can€™t separate his personal identity from his businesses€™ identity, and his own self worth as a person from his businesses€™ worth. The reality here is that not only does Dad wear the hats of head of the family as well as head of the business, but his perception of how he should play out those roles changes throughout his life depending on how his goals and objectives change. Let me give you an example. When the family is young Dad is the ultimate adjudicator. His word is law and woe be unto those that defy that law. He works hard and is a good provider. He has the dreams and aspirations of all young men. He wants nothing but the best for all. His interests and desires are naively benign and looks forward with great anticipation to the life and the opportunity that is before him. Key here that there is no competition for recognition, no alternative goals and objectives, and everyone is pulling the family and the business plow in the same direction. Dad works very hard. He is a credit to his family and his business. The next stage is where Dad is in the thunder stage of the cycle. The hard work has paid off. He has grown the business, been a good provider to the family and things are rolling along really well. But all during this time his children have been growing up, maturing, acquiring skill sets and most importantly forming and framing their own goals and aspirations The family is growing up, the business is going well and life couldn€™t be better. But hang on Dad for there is a bumpy road ahead. Welcome to the third stage of the cycle and this is where there is a fork in the road. How dad responds to this challenge will in great measure determine the future success of the business and the future success and continued interactions of family members.
Dear Old Dad €“ Not So Much
This is where Dad€™s alter ego, the evil twin of Dad the Magnificent, the Mr. Hyde character emerges. This Dad is egocentric, sometimes less than understanding, Dad-Not So Much sometimes emerges later in life, or it is more pronounced because of circumstances that prevail as the business matures and the family grows up. Dad-Not So Much is now faced with a brand new set of challenges. The divine right of Kings role he played just a few years back is now being questioned by those young upstarts- the offspring; the young princes. There is a reason why the young males in a pride of lions are cast out by the Alpha male. It is because competition is neither desired nor tolerated. Those same sorts of competition exist in any family business, but in most situations, at least an attempt is made to placate the young Turks and find a solution to this age old problem. Dad- Not So Much finds not only his authority being challenged, but his goals and objectives and most importantly he may perceive that his vision for the business and the family and the business may be in jeopardy. Now internally Dad-Not So Much€™s perceptions change and he may be more concerned with his own personal interests and not those of the global good of the family. In short, his world is out of sync. His ego comes into play and former young partners become competitors, openness is replaced with secrecy, and individual well being replaces global well being. Now instead of moving the business forward, he is concerned with protecting his position, guarding his flanks and ensuring his legacy. His time and effort is now spent solidifying positions and building walls of defense instead of moving the business forward. This action ensures anger and frustration for many family members and ultimately could mean the breakup of the family and the end of the business. But, lest we forget, Dad has the Gold so he makes the rules. Whether the rest of the family are willing to play the game with the rules that Dad has set up remains to be seen and will be different in every situation.
The unfortunate thing is that Dad€™s survival skills, the things that have made him most successful in moving the business forward may be the same skills he draws upon when he feels threatened by the changes in the business and in the family. The key event is when he differentiates his own survival from that of his businesses survival. He starts to feel like a stranger in his own land and he doesn€™t like it and he will do everything in his power to emerge victorious. He wants to win, and if it means that the business suffers because of his desires, then so be it. If Dad-Not So Much is the €œtake no prisoners kind of guy€, then some of the tactics employed may be using divide and conquer strategies when dealing with family members, undermining the credibility of junior management, undermining of subordinate€™s self confidence and minimizing the importance of input from others in the organization. I€™m sure that everyone€™s father has identifiers that would categorize them as Dad €“ Not So Much as well as Dad the Magnificent. If the succession process is to be successful, it is imperative that Dad understands what role it is he is playing and what stage in the business cycle his company is in. If he is not willing to be exhaustively introspective and deliberately and calculatingly moving down a deliberate track, then he, his family and his business could be doomed to failure.
Mom €“ Just About Always Magnificent
Mom plays the role of providing the maternal glue that holds both the family and the business together. She usually has the respect of all family members and uses quiet diplomacy, a gentle nudge and all round respect of everyone concerned to keep the peace. She provides the balance that is so important for this process to be a success. I have knowledge a number of families where tragically Mom passed away early due to disease or other calamity, and these families have suffered greatly not just from personal loss, but from Mom€™s good guidance and judgment at the family business table. Behind many successful business succession plans there is a Mom that has been instrumental in putting the deal together by keeping directional, focused and balanced and keeping other participants at the table when without her the whole thing would be a disaster. Mom has spent her whole life making compromising decisions and too many times for her own good it has meant that she is the last in the food line at the buffet, that her own career aspirations have been put on hold for the better of the collective good, that she has unselfishly gone without such that others in her family could have what they wanted or needed. I have every respect for the good job that Moms do both in the family and the business and I do believe that they do not receive the credit they deserve.
Here again there are a great number of roles to be played by Mom and Dad€™s offspring and their partners. At the risk of oversimplification, I will attempt to describe some of the roles.
The partner has shown a strong desire to be involved in the family business. The partner enjoys working with the elder generation and at least initially shares many of the goals and objectives as Dad. His assumption from the outset is that Dad is a fair guy (well he is Dad after all) and it is taken as a given that as the business moves forward the partner will assume an ownership role and take over the business. Nothing needs to be written down, because this has been discussed with Dad many times and the partner has been assured that it will work out just fine. But, as time marches on, the partner emerges with a vision complete with goals and objectives that may not be compatible with Dad€™s. This is where the fairy tale stops and the nightmare begins. If the partner has let time slip by he can wake up one morning with his own wife and family, financial obligations, an outdated skill set, a limited resume and unfortunately very little bargaining power to negotiate with Dad. Now the partner is furious as he has allowed himself to be maneuvered into a very poor bargaining position with very little leverage. He got to this place for reasons that were very benign. They talked, he trusted and now the roof is falling in. On the other hand the partner might not be suitable to run the business. If that is the case in Dad€™s eyes, (remember he€™s the one that has the Gold) then he has a responsibility to tell the partner early in the game. If the partner€™s expectations are raised and then very late in working life dashed, the effect is catastrophic for both the partner and the family. But, more about that later when we talk about the Prince Charles syndrome.
The €œI Got To Get Out of this Place Guy€
This offspring couldn€™t care less about the Business and he wants to get to those bright lights of downtown anywhere. The sooner that he boards the plane to anywhere Canada and the larger the population the better and the happier he€™ll be. This is the offspring that had no interest in the business from the start and had interests in some other field. Well, that€™s not totally true. I€™m reminded of the story of the Little Red Hen. You all know the story about the hen that wanted help to bake the bread and none of the animals would help. But then after the bread was baked all of the animals wanted to help eat the bread. This describes this offspring. He wants nothing to do with the farm until it€™s time to talk about farm business valuation and then he becomes the hog although he never has been involved in Pork Production.(Get my Gist?) If this offspring has enough jack with Dad, the partner€™s goose could be cooked. The sad fact of the matter is that I am convinced that offspring popularity is directly proportional to the distance that one lives from Mom and Dad and this guy will probably live the furthest away of anyone. When a get together occurs, everyone is on best behavior. Everyone is at their €œSunday Go to Meeting Best.€ This guy is a formidable adversary so if you€™re the Partner, don€™t be taking a knife to a gun fight. Keep your eyes open and your back covered, and watch for those aces up his sleeve.
The Everyone One and the Easy Ones Twice Guy
This offspring is the one that never has gotten grounded. He has been a drain on the family both emotionally and financially. This offspring doesn€™t want to have anything to do with the family business at least not the working side of the family business. Always there with a get rich scheme, but always with his backside between the sheets when there is work to be done, and always at the head of the line for the handouts. Mom and Dad and therefore the business have pumped a gazillion dollars and tons of time into this project and it just never gets liftoff. But, don€™t be concerned, when it gravy train time, this one won€™t be backward about coming forward and getting what he feels he is entitled to although not necessarily deserving of.
The Reasonable Offspring
This offspring has a benign interest in keeping the family functioning, values those relationships and certainly while very amenable to the idea of getting some of the spoils, just doesn€™t want to put the business in the ditch to do it. This offspring usually works outside the business and has quite a live and let live attitude.
The Couldn€™t Care Less Guy
Here€™s the one that doesn€™t value the family or the business and has basically divorced himself from both institutions. But never fear this may allow this guy to reap the benefits as well, because if Dad is the particular psychological makeup he won€™t be able to stand the fact that this guy doesn€™t want a piece of the rock and so will give him a chunk just to placate his conscious and make himself feel good.
The In Laws and the Outlaws
No cast of characters would be complete in this Soap Opera with out having this group in the mix. This is the group that joins the family as the Offspring mature and start their own families. Although plural marriage is illegal in this country, it happens on a daily basis. Anyone who marries into a family by definition and default marries not only their husband or wife, but marries the whole family as well. The two are inextricably connected and intertwined. Introduction of this group into the family dynamic serves as a catalyst for the issues of succession to be brought forth. At the very least it provides the environment for the partner to reevaluate where he stands with regard to security for his spouse and children. Issues that were historically non issues that were regarded as those things that would work themselves out are not at the forefront. Differences in goals, objectives and vision may not be more pronounced than they were previously. The partner is now torn between allegiance to his global family and his nuclear family, and this can lead to dissension and conflict. I am not being negative about the family being expanded to include this group. Far from it, as this is a natural and fulfilling expansion. But it can also be one of the most chaotic obstacles that a family and a business need to deal with. This is especially true if an in law takes a place in the business, as this adds but one more potential area of conflict to the mix. That being said, it can also be one of the most potentially beneficial things to happen to the business as this newcomer could bring a brand new perspective and skill set to the table. It can also be the most devastating.
There may be other cast members in your Soap Opera, but I think that I have covered most of the main characters. In the succeeding episodes,
(I€™ll try not to have quite as many as the Rocky Movies), I will examine how these characters interact and respond which ultimately will affect both the plot and the ending for the business and the family. And when it comes to the family, Succession is the never ending story.