The Family Business Patriarch Breaks His Silence and Asks: “Why wouldn’t we do that?”
Even if you don’t live in Illinois, you may have heard how dire the prognoses are for the state’s five pension funds. In this Sunday’s Chicago Tribune1 was written an Op-Ed piece by Dick Ingram, Executive Director of the Teachers’ Retirement System, the biggest of them. He took on the role two years ago, and since then has been speaking inconvenient truths to power: this notoriously gravely mismanaged pension fund today faces steep challenges that, unless overcome, will drive it to premature extinction. Hundreds of thousands of retired and active teachers will be cheated out of their promised retirement income by the pols and union bosses who for decades abused long term trust for short term votes.
As I read the piece, it struck me that in certain ways the situation is analogous to many family business transitions. No, I don’t contend that past patriarchs have abused the family enterprise, purposely stacking the deck against future generations. But by their inability or unwillingness to communicate with future leaders and stakeholders, they risk premature extinction of their family business.
It’s not about us
I’ll paraphrase Mr. Ingram in a new context; he eloquently writes about the pension problem in a way that sounds eerily like conversations I have had with families. Silence or miscommunication between generations of business owning families usually breeds misunderstanding and missed opportunities for a smooth, productive transition. After his anger subsided, a once prickly patriarch asked “This isn’t really about me, is it? It’s about my daughter.” The daughter who hopes to, and they all hope will, take on increasingly responsible roles – eventually taking the reins from her father and leading her siblings, cousins, and future generations to even loftier heights. But unless this transition goes smoothly, she won’t get off the ground. “Can we fix it?” he asks. Yes, I explained, we can. But the solution may be painful and involve sacrifice. He thought a moment more and posed a perfectly reasonable question: “Why wouldn’t we do that?”
The Schizophrenic Patriarch
Here’s why I think some don’t. Business patriarchs and family patriarchs share a title, but not necessarily traits. The stereotype patriarch of business is a powerful, controlling, unemotional autocrat. In a family, the patriarch is a protective, loving benevolent leader who is always in control. How many family business patriarchs can be both? But family business transitions seem to require the best of both personae, and finding them both in one person is exceedingly rare. For those many patriarchs who don’t possess both, the common reaction to the thorny issues of transition is fear: fear of losing control, fear of the unknown. And rather than risk failure because of a decision without enough information, he sticks to what got him here: his bold, mile-wide independent streak. At times over the years it has cut a wide swath to be sure, leaving carnage in its wake. And that was OK, when it was business. But will it still be OK when the carnage is family?
Speaking truth to power – especially inconvenient, uncomfortable truth – is always hard, but as Mr. Ingram wrote, we are at our best when we think of the future instead of the present, especially when the present is challenging and difficult. When we sacrifice for the next generation, we do great things for today. Who among us would not strive, in lean times and good times, to make the future better for our children and grandchildren?
That is how we have to approach family business transitions. It is not about us, it is about those who come after us. They might not even know or appreciate the sacrifice made for them, but what does that matter? Business owning families can transition generational leadership – if we focus on the future.
Why wouldn’t we do that?
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1. Chicago Tribune, Sunday, December 9, 2012. ‘Why wouldn’t we do that?’ by Dick Ingram
Category: Ownership & Governance
Tags: Leadership, start with why
About the Author: Chuck Meek
Chuck brings a unique background and perspective with regard to transition planning in privately held businesses. He earned his A.B. degree in Russian Studies & Language from the University of Chicago in 1984. After serving as a Naval of…
I think that the controlling nature that got many business patriarchs where they are is what leads to the issures around transitions – as well as human need to avoid thinking about one’s own mortality. Mr. Meek very clearly spells this out in his article which speaks to the heart of transition issues I have seen. It also speaks to the need for advisors to speak “inconvenient, uncomfortable truth” at times. Or as my colleague says, “It is our job to sometimes disagree with a client without being disagreeable.”
Mr. Meek cuts to the chase. Generational transitions are never easy but when the focus is on leaving a positive legacy for future generations the patriarch can rest assure that their sacrifices will be appreciated and hopefully remembered by the succedding family members.
Complex issue … if you are a patriarch, most likely you grew up in a pre-therapeutic culture (the 40s and 50s) , so your “communication” skills are not organic to today’s popular culture. Hard to learn that later in life, even if you want to … Also, fear drives so much of the entrepreneur, especially the fear of survival in the early years, so I’m sure it must be hard to let go of that fear, even when the business is successful, many years later. Great post, Chuck!
Very insightful, Chuck. In my experience successful transition and succession in family businesses almost always requires an advisor to communicate the “inconvenient, uncomfortable truth” to each party. Your reference as to how rare it is to find a patriarch who understands the difference between his role in the family and his role in the business is well done.