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Family Business Succession – Why is it so hard to let go?

I know too many rising generation leaders whose parents can’t let go of leadership. Seems to happen often in father-son relationships, and I’ve noticed a disproportionate number of examples in real estate families.  What gives?

 

Here are two recent examples, each with different outcomes.

 

Family Business Succession - Example 1

Juan and his 72-year-old father scheduled the date for their leadership transition three years ago, but as the date approached, Juan seriously doubted whether his father would follow through.  Juan grew more and more anxious as he watched his father deftly dodge any succession conversations. 

 

As the transition date drew close, Juan firmed up his backup plan in case succession fell through.  His father had the power to decide, and Juan was prepared to walk away if his dad refused to honor the transition date.  They had been dancing this dance for too long, and it was hurting Juan’s health, his marriage, and destroying any affection he felt for his father.

 

With no reason to delay and no transition plan in place three weeks before the scheduled transition date, Juan called his father and made it clear that he would resign if succession didn’t happen.  Juan was reluctant to make an ultimatum, but this was his life. His career and his family’s future were at stake. 

 

His father was furious.  He stopped speaking with Juan and instead, turned to Juan’s mother to complain.  She ended up being the lynch pin to save the transition.  At the 11th hour, a few days before the final deadline and to Juan’s surprise, Juan’s father agreed to transition the business to Juan.  Juan has his mom to thank for it.

 

Family Business Succession - Example 2

Sebastian’s experience was different.  He spent five years successfully growing his 78-year-old father’s business, and for the last two years, he and his father worked with a succession consultant to establish a succession plan. As succession drew near, Sebastian’s father suddenly fired both Sebastian and the consultant, turning to Sebastian and declaring, “This business is no longer a family business, and I never promised you a job.” Despite clear intentions, in the end, his father couldn’t follow through.

 

Both Juan’s and Sebastian’s succession plans had rational roots.  Yet both were hijacked by emotion.  Hmm.  Emotion and reason – quite a powerful polarity in family business succession.



Why it's So Hard to Let Go

Family business leaders are notoriously famous for struggling to let go.  Why is it so hard?

 

I don’t know because the leading generation rarely seeks coaching (from me at least) to address the complex emotions involved in succession.  So, I can only guess.

 

But I have some clues.  I know one entrepreneur who recently transitioned his business to the next generation.  This man consults with family business owners regarding succession strategies, so he knows how hard this transition is.  Nevertheless, he was surprised by the anguish he felt at losing the decision authority that once was his.

 

Now he sees a new generation of leaders, impatiently seizing the authority to change all the things that need changing.  I bet every change feels like a repudiation of his prior leadership.  That’s got to burn.

 

Although he serves on the board, he's cautious; unclear about when he can chime in and what he can say.  He’s trying to respect the new decision-making processes, but people still come to him expecting him to make the calls. 

 

I think that is the hardest part.  People come to him, and he doesn’t have the power to help any more. He loves to help people. He’s great at it too.  It’s one of the many reasons he’s so beloved.

 

I bet it’s hard to intentionally give up power, especially power that fulfills your soul.

 

Yeah.  No wonder it’s hard to let go.  Now that I’ve put myself empathically in the leader’s shoes, I can feel the anguish too. 

 

Rational and emotional.  Patient and impatient.  Control and trust. Tradition and innovation. These are just some of the polarities of succession in a family business.  Tough tensions to manage between generations.

 

To learn more about how to manage the tensions of succession in a family business, join my mailing list and pre-order my forthcoming book, Hug of War: How to Lead a Family Business With both Love and LogicOfficial launch is July 12th!

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