Sunday, October 21, 2018
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The real problem is fear

For months, I had been helping Tom, who works with his siblings in the manufacturing business started by their parents. The family has a constitution; their discussions appeared open, they seemed harmonious.

The family met every month, with the minutes documented by the sister. But when I followed up on decisions made in these meetings, everybody politely looked at each other and shrugged. Nothing concrete really happened.


Not happy with this, I bid them goodbye. Panic raced through their faces. The patriarch requested that I talk to each of them, one by one.

I started with the father, then the mother. At first, they insisted that their children were worthy successors (everyone had MBAs, everyone had been trained, everyone was “a capable child”). I agreed the children were highly qualified, so why were their suggestions not being implemented?


The parents could not put their feelings into words, but I discovered they were operating on fear: fear of losing control over the business they created, of losing authority to younger ones, of becoming perceived as marginal when they retire.

“Parents often fear that if they give up part of their prior monopoly on family decision making to the [kids], they would gradually be pushed aside and lose their place and influence,” says US adviser James Hughes in the book “Family Wealth.”

As for the younger generation, I thought they resented control. They were apparently relieved not to be taking on major responsibility. Again, it was fear: fear of making mistakes, of wasting company money, of disappointing parents.

One time, Tom tried to look into diversification, but when his father questioned it, he shelved the plan.

“There [is] a fear that [children] would take responsibility as requested by their parents, and then at the first opportunity to exercise this authority, their parents would pull the proverbial rug out from under them by vetoing their decisions,” says Hughes.

Once these deep-seated fears were acknowledged, the real work began. We established a system of accountability: before any plans could be implemented, parents and children would anticipate problems and prepare to respond to them, but without being paralyzed by unfounded fears of failure. Detailed feasibility studies would be done, advisers called in, pros and cons analyzed before deciding on a course of action.

Thereafter, walang sisihan. If plans failed, proponents should not be blamed, because everyone had voted to go ahead. In turn, proponents had to inform the family of every step to allay everyone’s fears.


The succession and decision-making process had to proceed slowly than what their constitution dictated, but it should not be at a standstill, for Tom and his siblings to learn how to take responsibility while at the same time earning their parents’ trust.

This was four years ago. The process had fits and starts, with several missteps. But when his father passed away last year, Tom confidently assumed leadership, with the support of his brother and his sister. His mother still sits on the board, and her advice remains indispensable.

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TAGS: family business, manufacturing business
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