Stephanie Brun de Pontet

Giving Up on Unattainable Goals: Benefits for Health?

Three studies examined associations between goal disengagement and goal reengagement tendencies and indicators of physical health (e.g., health problems, cortisol rhythms, sleep efficiency). Based on research showing that goal adjustment tendencies are associated with subjective well-being, the authors predicted that people who are better able to disengage from unattainable goals and reengage with alternative goals also may experience better physical health. Across the three studies, the findings demonstrate that the ability to disengage from unattainable goals is associated with better self-reported health and more normative patterns of diurnal cortisol secretion. Goal reengagement, by contrast, was unrelated to indicators of physical health but buffered some of the adverse effects of difficulty with goal disengagement. The results also indicate that subjective well-being can mediate the associations between goal disengagement tendencies and physical health.

Retiring from the family business: The role of goal adjustment capacities

A longitudinal study of family business leaders nearing retirement age examined the effects of goal adjustment capacities (disengagement and reengagement) on retirement planning. Goal disengagement predicted taking concrete steps to prepare retirement, whereas goal reengagement was related to having positive retirement expectations. Family business leaders with high goal reengagement capacities who trusted their successor’s abilities set an earlier retirement date than others. Leaders with poor goal disengagement capacities who did not trust their successor were unable to improve their retirement expectations over time. This study shows the importance of psychological variables in the retirement planning process of family business leaders.

Sticky Issues and Predictable Bumps in the Road

While proactively planning for the rise of the sibling generation will improve the odds of a smooth intergenerational transition, its accomplishment requires hard work, tenacity, and patience. There will be bumps in the road and roadblocks. We have alluded to some of these challenges throughout this book, but let’s take a closer look at some of the most common and serious obstacles that an evolving sibling team may encounter.

Why This Transition Is So Hard

The transition from the founding generation to the sibling generation is considered the most challenging of succession journeys for families in business for many reasons. Some significant ones include: the intensity of sibling relationships, the arrival of in-laws, and the difficulties the founder may have in letting go. We will touch on these and other challenges throughout this book. We start, however, with the overarching concept of complexity. Moving from one decider to needing to coordinate multiple decision makers for the business and the family is a fundamental change with a powerful impact. In addition, this complexity typically emerges in the context of important changes in the business (e.g., strategic, structural, technological, or financial evolution) and the family (e.g., aging parents slowing down) that increase the emotional intensity of every decision or change that must be considered in the process of transition.

Challenges and Opportunities Facing the Siblings

The sibling partnership stage is generally more intense and volatile than any other. As a result of their growing up together, the level of intimacy is higher among siblings than it is in the cousin generation that follows. This deeper knowledge of one another can foster a particularly strong partnership between individuals who can finish each other’s sentences, share each other’s passion, knowledge, and commitment to the business, and care for one another as only siblings can. On the other hand, some siblings really know how to get under each other’s skin, have a harmful shared history that leads to mistrust, or are simply constantly in competition for the attention and favors of their parents. Whether the family history is good or bad, it will have profoundly shaped each individual and the dynamics between them, making the emotional tenor of the family business particularly intense for siblings.

Building the Business and Family Systems to Support the Sibling Partnership

The appropriate management structure of an enterprise at the sibling stage will vary depending on the business, industry, markets served, number of employees, etc. It is beyond the scope of this book to prescribe optimal management structures, but it is almost certainly necessary to move the company away from the hub-and-spoke model of management that is common of many businesses at the founding stage. Hopefully, the company has grown to a size where running all decisions through a single-decision maker is impractical. At this stage we often also find the business faces complex choices, such as whether to take on debt to build a second plant or expand into another area or acquire a local competitor, that benefit from the wisdom and challenging questions a board of directors can put to management.

Managing the Outside Risk

Susan’s story is a composite of the many, many stories we have heard from spouses in business-owning families. Quite simply, it is hard to marry into a family business. The arrival of in-laws in the family system is a significant event; it represents growth in the family and the possibility of a next generation, but it also generates a lot of anxiety. These new family members often make a business-owning family edgy. The perceived danger for family businesses is that an unhappy spouse can threaten a sibling partnership and destroy any sense of team cohesion, in particular if the couple’s tension comes from the family member’s involvement in the family’s business. A spouse can represent a value system that differs from that of the family she or he is joining and may not understand what life in a family owning a business is like. In addition, unless the business is protected by prenuptial and shareholders’ agreements, an embittered spouse can gain access to assets and cripple a family company financially if the couple divorces.

Developing the Sibling Partnership

Successful transition to sibling generation leadership requires preparation and effort by all stakeholders of the family business. The complexity of the sibling stage in a family business typically requires adjustments in management, business governance, and the family’s decision making. Ideally, the senior generation works with the next generation to plan for these changes. Too often, however, generations clash rather than collaborate. Founders may not realize the difference between the owners’ role and management’s role because they have been doing both, and they may not always understand how differently their children will have to deal with decision making. In addition, many founders resist letting go of authority and will struggle with change of any kind. As a result, sibling team building often falls to the siblings themselves. This chapter will provide some guidance on the core elements the siblings should address in developing their partnership.

Conclusion: Enjoy the Journey and the Destination

Sometimes with all the time and work required to become an effective and successful ownership and leadership group of siblings, it is easy to lose sight of what a family business is really all about: family. It’s about each sibling’s own family and extended family, Mom and Dad, brothers and sisters and their spouses, and nieces and nephews. Without their love, happiness, goodwill, and support, a sibling partnership can falter. If things aren’t working well for the family, it is fair to ask: why bother?

The Case for Sibling Partnerships

Planning for the continuity of your enterprise has never been more relevant. As the baby-boom generation (persons born between 1946 and 1964) is reaching and passing the age of 60, our culture is facing an unprecedented “bubble” of individuals moving toward retirement age. In an extensive survey of family businesses, wealth management advisors Laird Norton Tyee found close to 60 percent of family business owners were over 55 years of age, and 30 percent indicated they were 65 or older (Laird Norton Tyee 2007). Further, the American Family Business Survey found close to half of family business leaders planning to retire within the next ten years (American Family Business Survey 2007), suggesting the process of succession is now underway or around the corner for countless business families.