Small Business

Easing Off the Parental Controls


When toddlers are just starting to walk, we learn not to pick them up every time they fall -- if we keep doing so, how will they ever learn to stand on their own? This same principle can apply to family businesses.

My friend and his daughter, whom I'll call Harry and Fran, have been in business together for eight years. Harry purchased the business two decades ago with modest cash and abundant sweat equity. Fran joined the company right out of college. She is very bright, authoritative, and quick to respond in situations that require action. Harry is more reflective, preferring to play things out in his mind and explore consequences before making decisions.

NASTY BLOWUP. Despite their vastly different styles, the father and daughter have a very close relationship -- abundant love and mutual respect. Fran has taken over responsibility for the day-to-day operations and sales and has contributed significantly to the company's recent double-digit growth.

A couple of weeks ago, Fran learned that their warehouse manager (who had been with the company for more than a decade) failed to schedule a large shipment promised to their most important customer. Fran was furious. She lambasted the manager in front of his staff.

The manager responded that if she wasn't happy with him, she should just fire him on the spot. As dialogue between the two got more heated, the manager used some unsavory language and then stormed out of the building.

HOLDING BACK. The next day, when the warehouse manager didn't show up for work, Fran shared the details of the episode with her dad. Harry listened carefully, silently harboring his concerns about Fran's style, the treatment and absence of a long-term key employee, and the immediate lack of warehouse management.

When Harry suggested that Fran call the manager, she rejected the idea, saying his disrespectful treatment of her in front of other employees was totally unacceptable. Although Harry disagreed with Fran, he decided to withhold additional comments, and let this play out a bit longer.

The following day, the manager returned to work, and he and Fran settled their differences. After waiting a few more days, Harry reviewed the matter with Fran and explored ways of how she might have handled the situation differently. Fran listened and accepted her dad's counsel and told him what she learned from the experience.

DAD THE DICTATOR. While she insisted that the manager's verbal abuse of her in front of other employees was not to be tolerated, she recognized that her discipline of him in public had prompted his behavior.

Unfortunately, far too few relatives in business together employ this hands-off approach when necessary. In a contrasting experience, about seven years ago, I worked with a family that struggled to find such a balance -- one sister, two brothers, and their very controlling father, who was basically the sole decision-maker in the business. Let's call him Napoleon.

No matter what happened, no matter when or where, Napoleon insisted that it be done his way. His sons and daughter had limited authority and decision-making power. Whenever Napoleon disagreed with the actions they took, he would instantly assert his authority.

SUDDEN PARALYSIS. Along the way, he'd blame whomever he could find for "almost screwing things up again." As Napoleon once said, "It's my way or the highway."

After Napoleon's sudden passing last year, his children found themselves facing myriad decisions about money, the future of the business, and their relationship as siblings. Still in constant fear of making mistakes, of doing "the wrong thing" -- of which their father would disapprove and override, even from his grave -- they felt paralyzed, unable to make the decisions necessary to move the business forward.

Lacking the tools with which to resolve the inevitable differences among them, the siblings ended up another sad statistic -- they were forced to sell the business.

Parents want to protect their children. We want them to do the "right thing." And we want them to act "the right way." Of course, "the right way" means the way we would do it.

LEARNING THE HARD WAY. But sometimes it's OK to grant some slack. Our children might not make the same business decisions we would make or do things "our way." We have to give them the opportunity to learn from their own experiences and make some mistakes.

In our doing so, we'll teach them not only how to walk but also how to run.

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