Hubler For Business Families

Preparing for the Unthinkable: Loss of the Entrepreneur

A real-world case study (first in a series)

Key Takeaways:
  • Family businesses typically have little time or inclination to prepare "early" for the loss of the entrepreneur who heads both the business and the family.
  • Family dynamics, as well as business disruptions add special stresses to family enterprises.
  • When some family businesses lose their founder, successors are unable or unwilling to understand the impact of their loss and acknowledge those feelings.
  • It is essential to share grief with other family members. Don't pretend it's business as usual.

No one expects to die prematurely. After all, when wouldn't anyone consider the death of a loved one "premature"? In a family business, the entrepreneur's unexpected death or incapacitation opens a fissure in the business and in the family - double devastation.

Families who own a business typically have no time or inclination to prepare "early" for the loss of the entrepreneur who is often the head of both the business and the family. There is usually no succession plan in place, especially when the entrepreneur is "robust" regardless of age, and certainly no one is prepared for the emotional tsunami and financial impact of such overwhelming loss.

I cannot imagine the doubling of emotional and commercial impact, but several of my clients have suffered such crushing events. I selected three to illustrate strikingly different reactions that can occur after such a loss: the Horwaths, the Carlsens and the Petersons (names and situations changed). Each suffered the premature loss of the family-business owner/entrepreneur. Each coped "naturally." Yet the way in which each business family responded provides valuable lessons on how better to prepare for the unthinkable.

Horwath Family: Avoidance and competitiveness

Mr. Horwath, father and entrepreneur, was the heart and soul of an auto company and larger than life. His long-established business relationships and historic marketplace savvy directed the company's success. Suddenly he was gone.

His two sons vied for his chair and position in the family. Each believed in his own capacity to move the company forward. Each saw it as survival, not mean-spiritedness. Their competition caught their mother, who now owned the company, between two sons she loved. The turmoil in the company inhibited the family's natural grieving process and interfered with succession planning in the company.

Under the circumstances, typical approaches to family business intervention languished. Nothing was resolved in family meetings to discuss the loss of the father, in leadership assessments to determine the more qualified son to head the business or in discussions about creating a board of directors. Horwath family members were simply unable or unwilling to understand the impact of their loss and acknowledge those feelings.

Family dynamics, as well as business disruptions, add special stresses to family businesses. One would think that the intimacy of a family in business together would bring together - rally rather than isolate - family members. In my experience, the opposite often happens: Family members avoid the topic, act as if nothing has changed emotionally and maintain isolated individual business viewpoints. The family is no longer a team. They are unable to share their loss and work through feelings of vulnerability.

The lesson is admirably portrayed in the movie, Zorba the Greek. I see it as a family business tale about an adult son who inherits a mine in Crete. On the way to visit his new mine, the son meets Zorba, a roustabout who cons the son into hiring him to run the mine. As they journey to Crete, the son asks Zorba, "Are you married?" Zorba answers, "Am I not a man? I have a wife, the kids, the house - the full catastrophe."

In the story, the mine turns out to be one catastrophe after another. To the owner son's dismay, Zorba dances and celebrates the catastrophes and embraces life and all it holds. The film's closing line is uttered by the son, "Zorba, will you teach me how to dance?" It captures in metaphor a business-family dilemma: Would you teach me how to embrace life?

Jon Kabat-Zinn, founder of the Pain & Stress Reduction Clinic at the University of Massachusetts, teaches patients to embrace the pain. He uses this concept in the title of his book, Full Catastrophe Living. In family businesses, the paradox is that in order to go forward, you must embrace the loss.

When grieving evolves into competition
Unfortunately, many of the emotional themes I presented to the Horwath family seemed extraneous or even impertinent and did not seem relevant to the family and company's culture. The family did not want to talk about their feelings. The grieving process instead manifested in the sons' competition for the father's role. It has taken many years for them to work through their emotional responses to their father's death.

The brothers continue to work on the strategic issues of the company. The process has helped them be more collaborative, although they continue to wrestle with the challenge of creating a board involving outside advisors. The company has changed from their father's aggressive on-the-fly business approach to one that is much more conservative and traditional, as the son could not rely on his father's reputation and business contacts. Essentially, the son needed to develop a new marketing strategy but was unable to understand the gap between his father's philosophy of success and what the company needed in order to prosper.

A powerful lesson in this case study is to not grieve alone. No matter how stoic one may be, each individual grieves, which makes it essential to share grief with other family members. It is altogether different than merely mentioning it to colleagues or friends. Sharing this experience with others in the family brings them closer together and expedites healing. Making grief part of family meetings allows you to share loving memories of the entrepreneur that also support understanding and health. At the same time, sharing in a family meeting gives family members opportunities to ask each other what support they need. It shares and speaks to grief and doesn't just assume it.

In part two of this article, we will turn to the Carlsen and Peterson families. They, too, shared the trauma of losing the business family founder. What each family did provides meaningful lessons about how a business family might respond - for the better or not.

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