BY PROF. ENRIQUE SORIANO
WE MAY show pity over George’s unfortunate state, but his situation is not so different from that of many founders. They continue to drive the business forward, obsessed with making loads of money, very particular with their stature or reputation in the community and in effect continue to declare to all and sundry that “I am in charge and in full control of the business that I built from nothing!”
The Georges of this world remain at the center of all major decisions and they tend to have little trust in others. They do not have senior level and independent-minded executives but managers or trusted assistants that were with him during the company’s startup years. Typically these “managers/assistants” have nary any decision-making function and as a result, the corporate culture is highly paternalistic. Unless a transformation or major shift to a more professional structure happens (where managers are empowered) before the founder dies, these types of founder-centric firms do not always survive. George knew that succession planning was an inevitable event but he chose to set it aside. That was his biggest mistake.
Why do founders refuse to give up control?
A most fundamental question begs to be answered. Why do most founders refuse to give up control or even share power with their offspring?
I am using the term ambivalence. It is the only word that best describes one of the founder’s dark secrets. And it’s a damaging behavior that is causing many failed successions.
In George’s case, when he deliberately postponed naming his successor, death came knocking and it was too late.
In hindsight, George avoided naming a successor because he didn’t want to hurt family members who would not be chosen to succeed him and his reluctance to plan a succession plan resulted in rivalry between himself and his children.
The late psychologist Harry Levinson clearly defined rivalry as a “fundamental psychological conflict in family businesses compounded by feelings of guilt. For the founder, the business is an instrument and an extension of himself. So he has great difficulty giving up his baby, his mistress, his extension of himself, his source of social power, or whatever else the business may mean to him. Characteristically, he has great difficulty delegating authority and he also refuses to retire despite repeated promises to do so.”
Levinson added, “this behavior has certain implications for father-son relationships. While he consciously wishes to pass his business on to his son and also wants him to attain his place in the sun, unconsciously the father feels that to yield the business would be to lose his masculinity. At the same time, and also unconsciously, he needs to continue to demonstrate his own competence. That he alone is competent to make “his” organization succeed.”
In the case of George, he fit the description highlighted by Levinson. George went on to procrastinate and instead of doing what’s necessary, he maintained a façade that he was still in control.
A Founder’s Dark Side
According to Peter Davis, in his well-written article, Three Types of Founders–And Their Dark Sides, “Much of the difficulty in passing the business to a new generation arises because many founders are not aware of, or willing to deal with, this dark, less constructive side of the personality. The children are controlled like everyone else. To them, father is an all-powerful figure, almost God-like. Sons are expected to enter the business as a matter of loyalty; they are given little choice.” (To be continued)/PN
