How do I tell my son he can’t be CEO?
The board prefers my daughter, instead of my son, both of whom are in their late 30s, to be CEO in our family business,” says E. S. “I agree with the board. But my son expects to be my successor. He will get angry and hurt if he does not make it. A friend told me to let Human Resources break the news. What do you think?”
My reply: I do not agree with your friend. Your son will never forget and might not even forgive the fact that you did not have the courage to talk to him when needed. Suppose Human Resources gives him the bad news, do you really think he will not confront you?
You sound as if you fear your son, for undisclosed reasons. Are you afraid he may turn violent and harm you, himself, or others upon hearing the bad news? Then ask another board member to be present when you talk to him.
I am concerned about how your son will interact with his sister afterward. If their sibling bond is strong, then it can weather this momentous issue. If not, discuss with your daughter on how to inform your son.
It is human to feel hurt when we don’t get what we want, but why does your son have these expectations? Did you promise to make him CEO? If so, then tell him that for the sake of the business, his sister is a better choice and he should support her.
If you communicate to your son that you love and treasure him, that being CEO is not a measure of his essence as a person, he should be able to handle the news well.
Your children are millennials, and research shows that millennials and Generation Z are more sensitive than older generations to any sort of critique, however gently phrased. So tread lightly but firmly.
Tell your son that people have different types of intelligence, as Harvard psychologist Howard Gardner points out, and not everyone is cut out to be CEO.
Now if the board feels that your son is a CEO-in-the-making, but that he is not yet ready, then encourage him to build on his strengths and improve on his weaknesses. Have a heart-to-heart talk on what he concretely needs to work on to someday lead the company.
In some family businesses, the CEO role rotates among qualified members, and perhaps, this can be the case in yours. Some enterprises create major roles for the runners-up, but if merit is not taken into consideration, the results in these cases are mixed at best.
Are you afraid of losing your son, that he may be so hurt that he will no longer work with you and with his sister? In professionally run nonfamily businesses, emotional blackmail is not tolerated, but your circumstances are different.
How invaluable is your son to the company? How strong are your family bonds? How much are you personally willing to sacrifice if your son threatens to leave? You need to discuss these issues with your daughter and the board.
In the worst case, if your son decides to leave, then give him your blessing and support to chart his own path.
“I am in charge of investments in our family business and I am trying to be professional about managing our money,” says A. S. “I took risk-profiling tests online, but I got different results. How accurate are these tests? How should I invest?”
My reply: Risk-profiling tests are popular, and I have taken some myself. But results are not set in stone, because like any psychological test, these are subjective and depend on factors we may not be conscious of at the time we took them.
For instance, take your mood and recent experiences. Rationally, we supposedly invest in a bear market (when prices are low) and sell in a bull market (when prices are high).
But since tests are “based on the recent experiences of the taker, [we may] invest too aggressively and defensively at the worst possible time,” says Singapore-based GE Life director Philip Loh in The Business Times.
Loh gives the 2009 financial crisis as an example. “Most who [took tests] early [on] would have indicated their preference for risk aversion. In hindsight, early 2009 was one of the best moments in history to invest aggressively as most markets have about tripled in value since.”
Instead of taking risk profiles, study the market carefully, and discuss your options with finance professionals with solid track records.
Queena N. Lee-Chua is with the board of directors of Ateneo’s Family Business Center. Get her book “All in the Family Business” via Lazada and the ebook version on Amazon, Google Books and Apple Books. Contact the author at [email protected]
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