Freeing the Next Generation from Founders' Insecurities

By Edwin A. Hoover, Colette Lombard Hoover

Much has been written about the personality characteristics of entrepreneurs that make them resistant to succession planning. For example, studies show that many business founders come from backgrounds in which poverty, parental abandonment, or sudden death in the family have contributed to feelings of insecurity. The business, in this scenario, provides a sense of security and well-being that is threatened when the time comes to "let go."

What is less widely recognized is that an owner's insecurities inevitably spread to others in the organization, profoundly influencing their attitudes and behavior and magnifying their resistance to change. The cultures of family businesses thus become immensely important in determining the success or failure of succession planning.

In Managing Beyond the Quick Fix, Ralph Kilman, director of the Program of Corporate Culture at the University of Pennsylvania, describes how a culture is created in a business: "The founder's objectives, values and behavior...provide important clues to what is expected from all members both now and in the future. Other top executives follow the founder's lead and pass on the company culture to their subordinates....Employees take note of all critical incidents that stem from management actions."

Summer 1992


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