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Last Updated: Thursday, 9 December, 2004, 00:00 GMT
Knowing when to hand over the reins
Pensioner
When should an elderly boss pass on the family firm?

Family firms can be beset by some unique - and sensitive - challenges, none more so than major disagreement between father and son.

QUESTION
Sandy Bell, UK
I am a partner at a firm of chartered accountants, and am taking over a client from a retiring partner.

I would like your advice on what best to do with the client - a family business with seemingly unsolvable problems between father and son.

The company is a well-established manufacturer, with excellent products, long serving and loyal staff, a good customer base, and has always been profitable.

So what's the problem?

Firstly, the father, in his 80s and the majority shareholder, does not wish to let go of the reins and wants to remain involved in the business that he started.

He does not believe his son, who is in his 50s, is able to take over. The son is responsible for the accounts and the computer system, which has a sales order processing system that he developed.

Secondly, the accounts are woefully and perennially late, as the son is always "a day away" from getting them up to date and ready for audit.

The ideal situation is for the father to remain involved in some way and allow the son's undoubted abilities with the computer to be productively employed.

The accounting should be removed from the son's responsibility and the accounts brought up to date, and quarterly management figures produced.

Over the years we have unsuccessfully suggested that they sell the company (father does not want to), allow the son to run the firm for a year (father will not allow this), and that they appoint a chief executive and run the risk that he may recommend that the son has to go (again rejected).

If a solution can be found for father and son to work in harmony, the continuing prosperity of a well established British manufacturing company can be secured.

What are your thoughts?

ANSWER
Nigel Nicholson, UK
It is the advisor's curse to be frustrated by people's inability to heed good advice and help themselves.

I understand why you have put forward your recommendations, but as a psychologist I always think it is helpful to try to see what it is that people really want, or more importantly, what they are afraid of.

In this case, sensible as your suggestions are, they may hit up against these issues.

First, old founders and leaders hate to let go because it is tantamount in their minds to letting go of life. Some truly dignified and contributory role needs to be found for elders.

It is great if one can build faith in their ability to find new fulfilments, even at an advanced age, but it is often better to find them some mentoring and networking role, promoting the people and its business, and maintaining the dignity of their status as the figureheads and elders of the tribe.

The son's issue is more complex. The lack of executive experience and competence is worrying here.

Bringing in non-family expertise looks like part of the answer, but you clearly anticipate the scope for this to end very badly all round.

On the positive side, the son seems like a motivated and committed person. He does not deserve to be punished for shortcomings that he has never had the chance to correct.

It seems you see a solution within reach, along the lines of some new role, but this needs to be "discovered" by him rather than imposed by you or an incoming chief executive.

This is where you need to practice the "judo" of smart questioning and problem-solving so he can take charge of his own destiny, guided by a shared vision of his own liberation and what can benefit the business, and involving him especially in the appointment of a new chief executive.

Father and son need to be reassured that they will have future roles, and some say in what these are to be - remember their powerful attachment is an asset to the company culture, if it can be incorporated.

The remit of an incoming chief executive has to be initially to help explore with them a range of options about how they might contribute.

Good luck!


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