Understanding the four hidden losses.
Who was my father? Many things. But I’ll always remember him best as a giant.
He was the epitome of a family business founder. In the 1950s, he started a tradeshow production business in Chicago. He poured his heart and soul into the company, growing it from $300K in sales to $12MM. For decades, he served as the driving force, the decision-maker, and the visionary behind our organization. I was the follower.
By 1995 I had been in the business for 30 years. And my idolization of my father waned.
At that time, we were always known as the biggest and best in the industry we served. We were constantly romanced by large media companies that were interested in buying our company. But my father, who was in his 80s, didn’t know what to do when faced with changing business circumstances. I lost confidence in his business decisions, and, in the background, looked for new opportunities to grow the business.
While I kept things going, I did not tell him much. Like any founder, he wanted to know all the details and could sense he was being left out. My dad—he was a wonderful person, but he did not accept aging. Like many aging founders, he was angry, frustrated, and depressed. And it showed.
In many ways he saw me as a competitor, rather than a partner. He feared relinquishing control because he feared losing the very thing that defined him. It’s a common story. The next gen is ready to move forward with creative solutions, which the founder doesn’t understand or agree with. As a result, the founder resists relinquishing control. It’s why many family businesses don’t prosper into the next generation. It’s not just the tense family dynamics, but it’s also all the unresolved business decisions that keep the business from prospering.
Intuitively, I understood what was going on, but I didn’t have a framework for understanding it until long after my father had passed away and the family business had dissolved.
The Four Hidden Losses: Unraveling the Struggles
In 2020, I attended a conference session, “The Leader in Adulthood: Finding Value for the Enterprise and Meaning for the Self,” by Professor Kelin Gersick of Lansberg Gersick, a family business consulting firm. I furiously took notes as he spoke on adult development as it relates to family business succession, drawing on the research of Daniel Levinson and Erik Erikson. He framed the four losses often experienced in the later stage of adulthood by founders as “The Four Horsemen of the Aging Apocalypse”:
Incompetence: The loss of capabilities and lingering self-doubt about one’s abilities, coupled with the apprehension of no longer being the ultimate problem solver and leader.
Irrelevance: The looming fear of losing purpose, significance, and identity as the driving force behind the business.
Incontinence: The battle to manage and express emotions that had long been suppressed, resulting in the fear of losing emotional control.
Impotence: The loss of control over or ability to influence various aspects of one’s life and business, resulting in a feeling of powerlessness.
The first two, irrelevance and incompetence crop up sometimes subtly, often suddenly, when a successor begins making business decisions that doubt the founder’s abilities to keep pace. Natural leadership succession is internalized as a threat. The founder, sometimes unconsciously, questions their belonging and worth.
Incontinence, the third fear, might initially sound like a physical concern. However, it runs deeper than that. It’s a deep fear of losing self-control, whether physical or emotional. Leaders begin to notice the loss of functions that they previously took for granted. Keeping pace with the demands of a thriving business is exhausting.
Lastly, impotence, the fourth fear, delves into the loss of physical prowess and the feeling of power that often accompanies youth. Aging leaders are confronted with situations that they feel powerless to change. Also, older individuals are acutely aware that they no longer move as swiftly as they once did. Regaining strength takes more time, and golf balls, once launched with vigor, no longer soar as far.
Not all founders experience all four losses. Nor do they experience them in the same way. But these crises are the silent undercurrents that, when left unaddressed, can create ripples of discord in the family—and, ultimately, destroy the family business. The founder is frozen by emotions related to the losses. Rationality never defeats emotion. Rational proposals never defeat emotional fears.
Of course, the deeper question is how to help founders navigate the very losses they are loathe to accept. Over the next year, I will be exploring the work to be done. It’s hard work—and work that is often skimmed over in family business succession discussions with so much emphasis placed on developing the next generation leader.
But as my own story bears witness, the next generation may be prepared, but if the founder isn’t, then it all can tumble.
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