One of the biggest threats a family faces is when the patriarch or matriarch of a thriving business is suddenly silenced by illness or death. Overnight, a family’s ability to function is tested, and their livelihood thrown into uncertainty. Once amicable relationships suddenly unravel with distrust surpassing grief.
Like the sudden impact on the support column of the Francis Scott Key bridge that caused the entire truss structure to fall, a sudden change in the family leadership can cause family relationships to fall like a house of cards. Through well-intended benevolence, the founder typically holds the majority of power and control, reinforcing a dynamic known as “cordial hypocrisy,” in which the remaining family members agree to get along even though each family member has a cross to bear. While seemingly keeping the peace, this communication pattern builds resentment over time and tends to compound under pressure. The cost is often increased resentment, stalled decision making and crippling distrust. The family frequently turns to their advisor for help,
I was present at a recent family meeting during which the matriarch and her three adult children were wrestling with the aftermath of gaining control over a business left rudderless the moment the patriarch (the founder of the family business) suffered a heart attack. Frustration was running high: The matriarch stepped into a role she didn’t want and felt incapable of handling; one son was increasingly angry at the reins put on him when he tried to make more risky investment decisions; another son was passionate about seeing his father’s vision succeed; and the daughter, who didn’t work in the business, wanted to be included in the decision-making process. In the balance, a $200 million family business was careening into an uncertain future with a battle for the helm underway in the captain’s quarters.
Proactive Steps
If the family had taken certain actions before the patriarch fell ill, they could have avoided some of these challenges. Here are some steps they should have taken: