Conversations about succession can be paralyzing for founders. Their identities are wrapped up in their businesses, which have provided for their families their entire adult lives. Founders are doers.
Not only are they doers, but they’re emotionally attached to their businesses. They have invested significant time, energy, and resources into building them, and accepting the thought of letting go or handing over the reins can be difficult. This can trigger feelings of fear, sadness, or anxiety. To boot, they may worry that the business will not thrive without their leadership, concerned that the successor will not share their vision or be able to maintain the company’s momentum and success.
Because of all of this, when the issue of succession is broached, the founder often wonders, “What will I do after I leave?”
They’ve never spent time answering that question, so they stay in place. In all likelihood, they will not, on their own, spend any time thinking about possible answers to that question. They are too busy doing what they have done for a substantial portion of their professional lives: operating their business.
It falls to trusted advisors and family members to try to help the founder find a path they can follow. But before anyone can help the founder, it would be helpful to try to understand the emotions the founder is experiencing when faced with this issue.
The Fear of Loss
The first emotion to consider is loss, which can come in many forms, including losing their identity. Founders often derive a sense of identity from their role within the company. Discussing succession means acknowledging the eventual need to step back and redefine their identity, which can be challenging and intimidating.
They will no longer be asked to solve issues. They will stop getting calls. Their calendars and inboxes will be empty. They often hold prestigious positions within their industries and communities. Stepping down from their role may result in a perceived or real loss of status and influence. They fear a loss of relevancy.
Likewise, they often have extensive social and professional networks that are closely linked to their roles within the company. When they step down, they may lose access to these networks or struggle to maintain these relationships.
They will begin to wonder, “Who am I?” and fear no one will remember them.
Loss of Control
Founders often have considerable decision-making power within their companies, and conversations about succession may bring up fears of losing control over the company’s direction, culture, and operations.
The fear of losing control has many dimensions. A founder can have full control of the company but still feel they are losing control of it because they cannot oversee all aspects of operations, whether personally or through hand-picked representatives.
A founder always has challenges with delegation, and as the business becomes larger and more successful, learning to delegate becomes a necessity. However, the founder will often think of the time when they knew everything that was happening.
Without the founder there, they begin to wonder if the people they’ve chosen for succession will do as well as they did.
Handing over complete control of the reigns can be difficult for the founder to accept.
Loss of Purpose
Founders are deeply passionate about their businesses and the problems they aim to solve. Because of this purpose, they are accustomed to a specific work routine and daily schedule.
When they leave, they will struggle to find a new purpose or mission accompanied by a routine that is equally fulfilling.
Loss of Financial Security
Founders may be worried about their financial security after leaving the company, particularly when their wealth is closely tied to the business. Succession discussions will raise concerns about their future income and financial stability.
Depending on the succession plan and the company’s financial health, the founder may face a reduced income or a loss of value of company shares, potentially affecting their financial security.
Grieving the Loss of the Old
Founders grieve the company’s changes after they leave, especially if the company’s direction or culture shifts in ways they do not agree with. They also hesitate to discuss succession because they have not yet identified a suitable successor or do not fully trust the capabilities of potential candidates.
Another factor is that the business is like a first child to the founder. In many cases, they have spent more time raising this entity than they have spent with their children. Now they are being asked to, in essence, give up their child. Put their child up for adoption. It’s not an easy decision to have to make.
The Fear of Mortality
Lastly, succession planning often coincides with the founder’s later stages of life or career, so conversations about succession can remind one of mortality, triggering discomfort or fear.
Discussing succession requires confronting difficult emotions and decisions. Most founders choose to avoid these conversations as a form of psychological self-protection, even if they recognize the importance of it.
To overcome these barriers, founders can seek support from trusted advisors, coaches, or mentors who have had to learn how to approach these numerous fears and losses. They should be able to engage in open dialogue with potential successors while working with the founder to keep their fears at bay. Developing a well-thought-out succession plan can help alleviate some of the anxiety and uncertainty associated with these conversations—and may even prevent one from becoming paralyzed from being able to make decisions because they are wrought with emotion.
Become a Member for Your Expertly Curated Advice
Joining the Family Wealth Library means access to the information the legacy builders need to navigate family dynamics and protect our wealth. We can keep what is ours by managing familial challenges and building trust and transparency.