I am dating myself. When I was a boy, there was a show called “Lost in Space.” The adventures were of a family, a crazy narcissistic scientist and a robot that were literally… lost in space.
When the robot sensed danger ahead, which happened in every show, it stated, “Danger Will Robinson (the youngest male family member), danger.”
Family businesses do not have robots yet to warn them of what lies ahead. We rely on reading the tea leaves, a crystal ball or gut instinct. In the current age of numeracy, everything can be statistically analyzed, so we can better prognosticate the challenges that family businesses face.
The first danger on the road ahead is the business owner aging out. According to the Conway Center for Family Business, the core age of the central business owner is 60.2 years with 40.3% of heads moving to retirement soon. This would not be so bad if the succession plan was delineated, which in 43% of the cases it is not.
We have an aging crisis coming soon for the typical family business and that crisis could come from a failure to plan, an unwillingness to change or an inability to turn over the reins.
A recent survey indicates that Americans feel that our country is ethically at low ebb. The good news for family businesses is that they are traditionally seen as being more ethical, with 60% believing that family businesses beat non-family businesses in the ethics game. Does the aging out of business owners take with it the values and ethics advantage that family businesses enjoy? Will junior son or daughter maintain the ethical focus, and community commitment that many family businesses have now? One such value is retaining employees during economic hardship. Family businesses are more inclined to retain non-family workers during these periods.
A final danger that is plaguing many family businesses, perhaps now more than ever, is emotional baggage such as guilt and entitlement. Guilt, as some family members choose not to join the family business, and entitlement as some family members believe the family business is theirs because they exist. The emotional and psychological issues of family business are frequently not discussed and as such are not managed. The current generation seems to be acutely aware of their emotions and feels they need to be heard and that their feelings are the truth.
No business owner can force a family member into the family business. This is a recipe for disaster. And, no family member can force the hand of the business owner just because they were born into the family. This is why the setting of barriers needs to be clearly communicated with each family member.
I was recently made aware of a family situation where the owner of an organization was blindsided by a non-participating family member with an offer to buy out the owner. The owner was told by the non-participating family member that they were not running the organization correctly, a malaise the non-participating member claimed they could fix. The offer to buy out the owner came with a guarantee that the current owner could stay with the business for an agreed upon period of time.
How nice. An unsolicited offer from a hostile family member. The audacity! The privilege! The entitlement!
These are dangers, Will Robinson!
Many of those come from outside factors, which are normal to all businesses, but the most devastating can come from inside the family. As generations change, so too do family members’ thoughts and emotions. What one generation considers unethical might be seen by another family member as the way it should be. My own children and I disagree on religion, politics and work-related issues such as how much time off an employee should receive. Setting clear boundaries is one way to avoid these dangers spilling over from work to a family crisis but communication is another balm.
The world is changing, and frankly sometimes I feel like we are all “Lost in Space.” When that loss hits the family business, it is a danger indeed.
