From Birth to Succession

 From Birth to Succession

A baby is born.From that moment on, expectations build.What kind of person will the child be?Perhaps later:Will this be the successor to the family business?Will s/he take what the owner has built to new levels?

Lee Hausner is a psychologist and recognized authority in family systems and effective-parenting techniques.She calls the children of family businesses heir apparents because their are so many ‘ifs’ involved in succession.If the heir apparent develops their self-esteem and a unique set of skills; if the family business is presented in a positive manner; and if the family dynamic encourages it’s members, then a good chance exists for a positive transition.The road to succession begins at day one and requires constant maintenance throughout an heir apparent’s life.At the core of the challenge, says Hausner, lies the realization that successors to family businesses are not born.They develop.

What Is This Family Business?

Even before a child can say the words, they may understand more about family business than adults think.Hausner has consulted with family business owners whose work is a continual source of tension and stress.Why would a child aspire to spend their time there?If the business preoccupies the parents 24 hours a day, the heir apparent might grow up thinking of the business as a rival for his or her parent’s affection.

“Children don’t understand why they are unhappy,” says Hausner.”They simply know that they are angry or frustrated.”If the family business is associated with those emotions, it becomes a less attractive option for a career.

Who Is This Child?

After four years of college, five years of professional work and two years of married life, an adult may return home and still be treated like the child he or she was in grade school (Who hasn’t noticed that?).People play roles within the family, observes Hausner: the goof-off, the whiner, the problem child, the achiever.And it’s very difficult for them to step out of these roles when they come into the family business.

To develop the strong successor, families need to look at the ways in which individuals get acknowledged.Says Hausner, those things that are special about a person should be celebrated and encouraged.By and by the heir apparent sees, ‘I don’t have to judged according to a more capable person.I compete only with myself.’

What Are Your Qualifications?

The family dynamic can be such an overbearing environment that Hausner recommends potential successors work at least five years outside the family business, developing their own skills.If not, she warns, they are rarely evaluated fairly in the family business.

“One of two things happens.If they come in, it’s really hard to supervise them critically.If you ask your manager to supervise this heir apparent, the manager will always have the understanding that this person may some day be his or her boss.So you get this situation where the heir apparent is not fully accountable.Or you get the reverse–everyone is too tough on them.They are so tough and critical, the heir apparent burns out and says, ‘I don’t want anything to do with this business.’

“By letting them go somewhere else, they learn they can succeed independently and their place with the family business is not based on them being a member of the lucky sperm club.”If the heir apparent eventually decides to join the family business after spending several years outside, Hausner underscores, “non-family executives can say, ‘this is a family that operates its business based on merit.Even family members are held accountable.”

The Shifting Family Dynamic

An entrepreneur’s drive and dictatorial control may build a business, but only cooperation will ensure its survival.Hausner has seen powerful entrepreneurs encourage competition in the family, then expect cooperation in the business.There are a lot of families, she says, that think they have to treat their kids “tough” within the family to make them competitive in the outside world.That kind of environment breeds enormous amounts of problems when all of a sudden you want all these people to switch to a cooperative model.Sometimes it doesn’t translate.

A Final Word on Developing Competencies

Parents want good things for their children.Highly driven parents may want the best.Beware, says Hausner, not to drive the child toward a fixed goal.Focus on the process of growth, not the final product, she counsels.

“If parents wait for a final product:the A+, the presidency of the classroom, winning the gold-medal in the Olympics all of which are end products, things, then they lose a lot of opportunities to make kids feel good about the process of developing.Being imaginative, creative, a good problem-solver, organized:those are all processes.”

The heir apparent needs to take steps on their own, whether they be baby steps or life-altering decisions.False-starts and scrapped knees may result, but the individual, the family and the business will benefit.