Are there situations that you seem to run into more than others?

Business Leader Post, July 3, 2013

Thomas D. Davidow, Ed.D.

Yes there are! The saddest and most difficult is the situation where the business leader is the father and passes away prematurely, leaving the business/stock in control of the mother/wife. He had been the authority in both the business and the family.

Succession had been a topic for discussion, but nothing had been implemented. Part of this problem falls at the feet of the attorney. The estate plan is usually driven by taxes--if the patriarch’s estate flows directly to the spouse then this is not a taxable event--or the message that “you should keep control of your business because you do not want to let your “kids” control it. The assumption (without sufficient knowledge) by the attorneys is that you can’t trust your offspring. This is a “bad message” and the topic for another column.

The consequence of that advice is chaos. The chaos bubbles up over time, or it happens immediately. Interestingly enough, it has been my experience that the spouses (the women) after initially feeling overwhelmed and totally unprepared, rise to the occasion. It usually takes them a couple of years to figure out how the business is run; and either they step in and get more involved, or they stand back and support the key people in the system, both family and non-family.

What they seem to be unable to do is provide the necessary discipline and accountability to family members within the business system that their husband provided. They desperately need a different decision making process than the previous one and are unable to create one despite or because of the chaos. The psychological barrier to their developing the new system is successfully and collectively grieving the loss of the father/husband. The fear is that if they learn to get along without him, then they will lose him. Not true, he just comes back to them in a different way.