On March 28, 2011 there was an article in Yahoo! Finance titled, ‘Why I Fired My Father From the Family Business’ by Mitchell Kaneff. In this article, the author describes starting at the family company when he was fifteen, and after working there for seven years after college, his father made him president. However, as is often the case when there is a ‘hand-off’ rather than a true purchase or acquisition, the promotion was in name only; his father had a hard time giving up control. His father remained CEO and continued to make a lot of the decisions, and there was uneasiness among management about the split chain of command. As the title implies, he ultimately fired his father, and fortunately it went well for their relationship.
This article describes a scenario that I have seen repeatedly. It is understandably hard for someone to create and run a successful business and then hand it off to their son or daughter. Businesses are like children to many business owners; they consider their business their legacy. My sister doesn’t like to leave her baby with a babysitter because she is so worried about the baby and misses it; and that is for just being gone a few hours. Even with the best of intentions when a business owner is handing off the business to their heir, it is like handing off their baby to another person, with the same separation anxiety.
My advice to any business owner giving their business to their kid is, “Don’t look back” – not even to offer ‘friendly advice’. It rarely goes well, and there is too much potential for things to go very poorly and ruin the most important relationships of all: family.
