Common Causes of Family Business Conflict & What to Do About Them.
Family Business Mediation Video No 44: Retirement & Other Exits.
By Jon Kenfield. Solutionist.
• Generational transition – “Succession” – is THE major cause of conflict in business families. It always has been, and it’s on the rise as baby boomers retire in increasing numbers.
• “Retirement” means “to put out of use” and it’s a terrifying prospect to many, highly or formerly active individuals, especially competitive business people. Consequently, many family business leaders hang on far too long, often contrary to specific promises and commercial commonsense – and much to the dismay of employees and aspirational, next generation family members.
• Retirement needs to be a process, not an event, planned, managed and implemented over time – to help avoid “culture shock”, depression and “rubber band” returns, a couple of years later.
• The tension between up and coming employees, next genners and in place leaders can become intolerable. Promises made, or thought to have been made, are not kept, creating a sense of impatience, breach of trust, and even betrayal.
• Pressure from all sides – business and family – on a leader who’s not ready to step aside, for many reasons, creates confusion, anger and pushback. The inevitable consequence is festering, bubbling, or exploding conflict.
• Plan retirement well in advance to ensure there is a specific retirement date in everybody’s mind and that the outgoing leader is ready, willing and eager to move out, back or aside when the time comes. Make it a celebration, not a challenge.
• If, as frequently happens these days, the leader does not want to stop working now, or anytime soon, work with them to plan the next stage of their life, including as much involvement in the business as everybody wants, for as long as everyone is willing. This may mean creating roles on Advisory Boards, to replace operational responsibilities, in order to let new people, with new ideas, get into the driving seat.