By Maurie Cashman
Father Knows Best is the name of a TV show that you will remember if you are of a certain generation. While we talked last week about a hidden risk of customer concentration, I want to discuss a more personal, and difficult risk this week. That is the risk that the owner of the business knows what is best for the business, what I will call the â€œFather Knows Bestâ€ syndrome.
This is very personal to me as I am sitting in surgery waiting room as I write this, waiting for an elderly friend to come out of recovery. She fell yesterday in her garden and snapped her femur, the largest bone in your body. The surgery was successful and it appears she will make a full recovery, after extensive physical therapy. When we got the call from the First Responders yesterday they were nearly certain that she had broken her hip, which would have been much worse.
So why write about this?
First, in most families I know, the Father Knows Best syndrome is dominant. The head of the family, whether that be the father or mother either started or perpetuated the business. There is an assumption on the part of that person that they know how best to run the business. There may be hesitancy on the part of the children or employees to question that authority figure. The knowledge and experience of the head must and should be captured, honored and carefully considered. However, the ideas of the next generation should be given the same consideration. This can lead to significant difficulties in planning when the dominant figure refuses to look at options and ideas that do not fit with their perceptions.
Second, there may be a difficulty with discussing the subject at all. Many families have a very difficult time discussing money. This is compounded in larger families with wide differences in careers, ages, incomes, involvement in the business, etc. This difficulty is very real and must be respected when talking with the head(s) of the family, but it can be very frustrating for family and employees, who donâ€™t know what the plan is.
Third, this is also often mistaken for a short-term issue. It can and will have very long term effects on family relationships. Measures that are taken today must be examined in the context of both the ability to create the ownership transition but also in through the lens of the impact on family members far into the future. There should be a long-plan in place for what the senior generation wants to do as they transition away from the business and this should dovetail with the plans of the younger generation. One of the highest suicide rates in the United States is among former business owners. In my opinion, that is the direct result of a lack of comprehensive planning for ownership transition including understanding and understanding the goals and objectives post ownership of the owner.
Our friend is out and recovering well. We are all thankful for that. However, despite the best efforts of the family and a great financial advisor, she chose to do nothing, which is her choice and must be respected. However, options may have been reduced further by this incident. Now we are not talking about a large estate and doing nothing is certainly an option. However, the greatest gift she could have given the family was the knowledge that she had a solid plan in place. They are now left with further uncertainty about her care. She took an online survey that told her she would live to 99.9 years old. That is another 21.8 years. I hope so. I hope those are quality years as well, for her and her family.
So should you for you and yours.