Running away from succession

A former CEO finds insights in great literature into why some business owners resist passing the torch.

By Robert A. Brawer

Expert perspectives on family business run the gamut from the advice of lawyers and management consultants to the ministrations of psychologists. While impressive in their range, these perspectives are by no means exhaustive. Another source of potentially useful management insights is often overlooked: great literature.

The stuff of novels and plays, from King Lear to Major Barbara to Buddenbrooks, promotes self-scrutiny in the most non-threatening way. Writers of fiction deal with fallible flesh-and-blood characters like ourselves, whose attitudes and choices lead the reader to ask what he or she would do under generally similar circumstances. They also allow us to see multiple viewpoints simultaneously, a real advantage in dealing with situations in which we are hard put to see beyond our own biases and agendas. Unlike psychologists, imaginative writers provide a context in which, for example, the leader of a family business can see how loss of self-controlÑthat is, failure to act rationally and responsibly in providing for the next generationÑleads to the kind of destructive consequences few want to contemplate.

Of those owners who say they are committed to passing along a successful business to the next generation, few actually do the things that facilitate a conflict-free transitionÑestablishing and maintaining a healthy relationship with their children while young and training them appropriately when they are ready to come in. Little wonder things go awry. Little wonder effecting a smooth succession in a family business has always been among the most vexing of management problems.

One of the best examples of the psychological obstacles to succession can be found in two novels by the noted American writer John Updike, Rabbit is Rich and Rabbit at Rest (Alfred A. Knopf, New York). The two books tell one continuous story about the head of a family automobile dealership whose unwillingness to accommodate his son in the business leads to untoward consequences. Grounded as it is in an all-too-human problem, UpdikeÕs story of paternal irresponsibility has always enhanced my appreciation of businesspeople who have treated their sons and daughters with understanding and respect.

I will tell you of two such CEOs I know after describing the insights into family business in UpdikeÕs novels.

 

The hero in middle age

UpdikeÕs aptly named central character, Harry ÒRabbitÓ Angstrom, has inherited his Toyota dealership in a mid-sized Pennsylvania city from his father-in-law (his wife and mother-in-law actually own the business). A star basketball player and hometown hero in high school, Rabbit has now settled into middle age. Contrary to the novelÕs title, he is not rich; he makes a comfortable living, but his life is fraught with the anxieties and problems that nag those who experience the deadening effects of habit and routine. Rabbit embodies the inchoate yearnings of all those who as adults have had to accept second-rateness. For years, RabbitÕs deepest impulse has been to run from his job, from his family, and from himself. His heartÕs desire is Òto break out, to find another self.Ó Paradoxically, though, Rabbit abhors change, even as a Òdeadly stalenessÓ pervades his life. Anything that bodes a shift from the status quo poses a threat to himÑhis sonÕs desire to learn the business, for example.

His son, Nelson, has nothing of his fatherÕs imposing physical stature and seems, to his father at least, a Òshiftless, arrogant goof-off.Ó A central conflict in UpdikeÕs novel arises from NelsonÕs announcement in the middle of his senior year at Kent State that heÕs through with college and eager to take up with Rabbit in the family business. For Rabbit, this news couldnÕt be worse. Why canÕt the boy finish his education after all the money RabbitÕs invested in it? Why does Nelson carry on like a hippie instead of a normal person? If he wants to go to work so badly, why doesnÕt Nelson go off and get some job experience elsewhere? All these questions sound reasonable enough under the circumstances. On the face of it, NelsonÕs desire to join the business at this point seems premature.

Yet Updike makes it clear that Rabbit has an unspoken agenda of his own: to avoid, at all costs, bringing his son into the business at any time. What sound like perfectly legitimate objections turn out, as we soon realize, to be fueled by RabbitÕs unwillingness to let goÑan unwillingness, we might add, characteristic of CEOs who let their own emotional hangups block responsible decisions regarding the future of the family business.

We never doubt that the intensifying tension between Rabbit and his son owes far less to the traditional generation gap than it does to RabbitÕs own internal conflict. He is torn between what is expected of him as a father and a family business head, on the one hand, and the very real threat that he feels Nelson poses to him, on the other.

True, Nelson has been flirting with drugs; he sports a Òpunk lookÓ; he feels that college is a waste of time; he affects a counter-cultural point of view. Hardly promising material for a future executive. Yet Nelson is hardly the Òshiftless, arrogant goof-offÓ his father insists on making him out to be. In fact, he shows a real aptitude and interest in the family business. Nelson has no interest in his fatherÕs proposal that he start part-time in a menial job, washing cars, a suggestion clearly intended to discourage him. (It would be interesting to know how many fathers still adhere to the hoary notion that their children can best learn the business by working their way up from the proverbial ground floor.) Nelson is bright and confident about his ability to sell cars in the showroom, RabbitÕs own bailiwick. But his father will have none of it. His insistence that Nelson finish college masks his own feeling of insecurity.

ÒBut whereÕs his degree?Ó Rabbit protests to his wife, Janice. Updike tells us he hears his own voice in his head as shrill, sounding trapped. ÒWhereÕs his degree?Ó Rabbit repeats. Shortly afterward, he finds his son poring through a standard manual on automobile dealerships, which Rabbit is quick to denigrate, displaying his own expertise on financing, used-car management, and the like. Updike writes: Rabbit ÒdoesnÕt know why it makes him nervous to see the kid read. Like heÕs plotting something.Ó

The fatherÕs own conflicted feelings make him defensive rather than receptive when Nelson shows a degree of creativity in responding to changes in consumer attitudes, a most valuable asset for the succeeding generation in a family business. Zeroing in on the problem of stagnating used-car sales, something Rabbit persists in ignoring, Nelson asks his father why he doesnÕt start buying and selling convertibles. On the face of it, NelsonÕs idea sounds cockeyedÑthe way all creative ideas sound until we start thinking about how much sense they make. But Rabbit is so preoccupied with fending off his son that he ignores NelsonÕs common-sense reasoning: Since Detroit is no longer making convertibles, these cars will quickly appreciate in value in the minds of consumers.

Receptivity to new ideas, especially those attuned to shifts in the market, is exactly what Rabbit sorely needs at this point. The story makes it clear, however, that keeping an open mind is most difficult when your own son sounds the wake-up call. Updike makes us see how RabbitÕs churlishness toward Nelson plays out in one of the most emotionally wrenching scenes in Rabbit Is Rich. Backed by the owners of the dealership, his mother and grandmother, and unbeknown to Rabbit, Nelson buys three convertibles on his own for resale, promising his father theyÕll sell at a profit even though, to RabbitÕs dismay, Nelson has paid way over book price for them. Infuriated, Rabbit turns on his son:

ÒYouÕll promise me nothing. YouÕll promise me to keep your nose out of my car business and get your ass back to Ohio. I hate to be the one telling you this, Nelson, but youÕre a disaster.Ó

At this point, RabbitÕs distraught son, who all along has craved his fatherÕs approval, if not love, reacts by jumping behind the wheel of one of the convertibles heÕs bought and ramming it into another Òas he bends his face to the wheel sobbing.Ó

The episode is instructive: An idea that, if pursued rationally, might have benefited a business in sore need of revitalization and fresh thinking results instead in an almost irreparable breach between one generation and the next. Updike underscores the point by having Rabbit make light of the episode when he blithely admits to his golfing cronies that the third, untouched, convertible sold right away, clearing one-thousand dollars. Equally telling is RabbitÕs co-opting of NelsonÕs point that customers for the old convertibles will be willing to pay way over list price, contrary to RabbitÕs prior false assumption that, when it comes to buying a high-ticket item, people will be averse to impulse purchases.

When, in fact, Nelson does go back to finish out his senior year, Rabbit is relieved, at least for the time being. What heÕs thinking comes as no surprise to the reader, as Updike writes: ÒThe kid was no threat to him for now.Ó Rabbit was Òking of the castle.Ó

How pathetic, yet how true. The urge to protect our turf is more powerful than we are apt to admit, and never more so than when one of our own poses the challenge. RabbitÕs automobile showroom is his castle, and woe betide him who tries to breach the ramparts!

 

Emotional distance

In Rabbit at Rest, Updike brings his family business saga forward about 10 years to the beginning of our own decade, when we see Rabbit Angstrom still resisting the changes that have taken place around him. Nelson, now in his early Õ30s, is running the car lot, though only after his mother and grandmother have bent RabbitÕs arm to allow him to do so. At 56 and semi-retired after a heart attack, Rabbit hasnÕt mellowed. He is still on the outs with his son. Nothing has changed in their relationshipÑor, more accurately, lack of one. RabbitÕs wife, Janice, understands all too well this emotional impasse between her husband and son, and reminds Rabbit of the truth about himself. ÒMen have this territorial thing,Ó she says. ÒYou think of the lot as yours. He [Nelson] thinks of it as his.Ó

UpdikeÕs point is clear: Just because RabbitÕs son is now ensconced in the business doesnÕt mean that anything is fundamentally different from before. Rabbit is still unwilling to let go. Worse, his contempt for his son appears to be at least partly responsible for NelsonÕs drug habit, which, Rabbit discovers, Nelson has been milking the business to support. At this critical point in the novel, Nelson is sent off to a rehab center for six months and Rabbit, after a long hiatus, once again finds himself in charge.

Now any family business head who has followed Updike to this point cannot be faulted for feeling that Òit canÕt happen here.Ó And yet if the novelistÕs story seems far-fetched to us, we cannot deny that he has made the turbulent emotional life of his characters vivid and real. More, for practical purposes, Updike makes NelsonÕs temporary removal and RabbitÕs return to the showroom underscore a vital fact that in a family business, or any business for that matter, the notion that it is possible to turn the clock back in the face of inexorable change is one of lifeÕs grand illusions.

As we might well expect, Rabbit Angstrom is quickly disabused of the idea that he is again Òking of the castle.Ó The people whom Nelson has hired from his own generation make Rabbit, the titular head of the dealership, feel superannuated. The new computer technology confuses him, and a savvy young saleswoman makes him uncomfortable, especially with all the business sheÕs bringing in from young, independent-minded women of the Nineties. Nothing is as it was, especially for a man who is so fearful of change, so wed to the past. Updike writes:

Ò...his words [to the new generation of salespeople] drift away like the speech of old people on the porches when he was a boy. Not for the first time since returning to the lot does he feel he is not really there, but is a ghost being humored. His words are just noises....These two youngish men [new accountants] feel like the real management of the firm.Ó

Later, after Nelson returns from rehab, Rabbit entertains a fleeting vision of a father-son collaboration; but then, just as quickly, he understands that any type of business relationship with a son whom he hasnÕt related to as a father since the boy was 10 is only a Òpipe dream.Ó In a family concern, Updike reminds us, the gap between one generation and the next is only as wide as the emotional distance between them.

 

Healthy self-restraint

Novelists writing about business have long had the reputation of being negative in their point of view. In truth, there are few heroes in American literature about life in commerce. Rabbit Angstrom is certainly not what weÕd call an admirable character, but it is precisely because he is revealed as vulnerable, as fallible, even at times his own worst enemy, that Rabbit has an abiding interest for us. (Unless, of course, we regard ourselves as infallible.) For heads of family businesses especially, John UpdikeÕs work is not a negative tale, but a cautionary one. Rabbit Is Rich and Rabbit at Rest make us understand, in a familiar, Middle-American context, how the loss of self-control can make the process of succession in family businesses so treacherous.

With Rabbit Angstrom in mind, I am all the more struck by the ways in which some CEOs I know have managed to ensure continuity in their own family businesses. Contrast RabbitÕs unwillingness to exercise self-restraint and accept his son as a business partner with the attitude of a father who recently co-founded an asset management company with his daughter. For many years, the father was a managing partner of another asset management firm; his grown daughter was a successful portfolio manager in her own right. One vital element in making their new collaborative enterprise a success was that they have always had a close father-daughter relationship, based largely on his respect for her independence of mind. Interestingly enough, while she had always shown a lively interest in finance, he told me that he rarely discussed the subject with her at home. Instead, he let her interest in finance and subsequent choice of a career in asset management develop on their own.

Their decision to form a partnership evolved naturally, from a mutual regard for each otherÕs prior professional experience and abilities. My acquaintance has made an effort to structure the organization so that he and his daughter function in concert yet work independently when it comes to managing the various portfolios of the firmÕs clients. Father and daughter complement each other in an unusual example of what he calls Òtrue peer respect.Ó His efforts to balance personal involvement with professional detachment exemplify the advantages of self-control in family business.

Obviously, not all family businesses are built on this kind of parity. LetÕs face it: The fun of heading up a privately owned and operated business is the freedom to run things without the constraints that outside shareholders and financial analysts impose on public companies. The prospect of having to transfer authority and a degree of control even to a family member does not go down easily, but a CEOÕs natural resistance to the idea breeds conflicts that we know can jeopardize an otherwise healthy business.

What is required to forestall conflict, at the very least, is the willingness to delegate real responsibility at the outset. Again, this calls for self-restraint of a high order, because it implies a willingness to let a relatively inexperienced son or daughter make mistakes, sometimes the kinds of mistakes we would not allow ourselves to make under similar circumstances.

Another of my CEO acquaintances, who has brought his son into his manufacturing business, feels that it takes about six years to become fully seasoned in all technical and managerial aspects of a complex business like hisÑa fact that argues for firmness yet restraint during a long learning curve. His son, he soon realized, had excellent computer knowledge and a good head for figures. At the same time, his sonÕs lack of maturity as a manager (what his father called his Òplain-vanillaÓ style) had become obvious. His shortcomings were revealed in his weakness at assessing people correctly and his reluctance to take some of the harsh measures necessary to cut costs, most notably trimming his staff.

How did his father handle him? Simply by continually asking tough questions that impelled his son to take needed action and, more important, by raising his sonÕs level of what he ought to expect of himself. The son was accountable to his own performance standards, not his fatherÕs. This business owner thus monitored his sonÕs actions without co-opting the sonÕs authority and making his decisions for himÑanother good example of how parental self-control can make for a mutually advantageous, long-term working relationship.

For heads of family firms, the tendency to put off the inevitable transfer of authority to the next generation is strong. If doing so is patently self-defeating, we are the last to admit it; often we find means to justify it. UpdikeÕs fiction reminds us of our penchant for easy justifications when issues of control are at stake. The story of Rabbit, forever in flight from himself, hostage to his own feelings of insecurity, reminds us of our potential for self-deception, for blinding ourselves to reality. Protesting that what we are doing is in the best interests of our company, we are apt to wind up like Rabbit AngstromÑout of control in every sense.

To be able to shift from wielding authority to exercising self-control in preparing for succession is vital. As UpdikeÕs cautionary fiction reminds us, when it comes to succession, we may be tempted to run from ourselves, Rabbit-like, rather than come face- to-face with our responsibilities to our families and ourselves.

 

Robert A. Brawer is the author of The Fictions of Business: Insights on Management from Great Literature (John Wiley and Sons, 1998). He was formerly a professor of English at the University of Wisconsin-Madison, and CEO of Maidenform Inc., from which he retired in 1995.


Three writersÕ views of generational change

Major Barbara
By George Bernard Shaw

ShawÕs early 20th-century comedy is about the dilemma Andrew Undershaft, a benevolent arms manufacturer, faces when his determination to keep his business in the family runs up against some distasteful choices. As it turns out, the most likely candidate to succeed him is his prospective son-in-law, a professor of Greek philosophy who is exceptionally bright but vocal in his abhorrence of the capitalistÕs Òone true religionÓÑ that is, money. For his part, Undershaft is remorseless in condemning what he calls the professorÕs Òmiddle-class morality.Ó The way in which the two arrive at mutually agreeable business terms is an object lesson in the benefits of honest if painful communication and compromise between competing sets of values.

American Pastoral
By Philip Roth
(Vintage Books, 1997)

RothÕs novel, winner of the Pulitzer Prize for fiction in 1997, portrays how a close personal relationship between a father and son helps ensure continuity in a family business. The book thus provides an interesting contrast with the failures of Rabbit Angstrom in John UpdikeÕs novels. The business setting is a glove factory in Newark, New Jersey. The founding father of the firm, Lou Levov, is not without his quirks and prejudices. Still, he manages his son SeymourÕs apprenticeship with the patience and understanding born of his own trials in starting up and maintaining a highly specialized, quality operation. Seymour, however, is not so lucky in his relationship with his daughter, a Vietnam war protester whose total rejection of her familyÕs values is the central mystery of the book.

Gain
By Richard Powers
(Farrar, Straus & Giroux, 1998)

PowersÕs novel is the story of how the successive heads of Clare Soap and Chemical Company, a family business founded in the early 19th century by three merchant brothers, manage that most difficult of feats: maintaining a family owned and operated business through four generations. Of absorbing interest are the ways in which this family of individualists, meshing its special talents, even eccentricities, maintains harmonious working relationships through decades of growth and change. Equally important, Gain demonstrates how a set of shared family values accrues to the long-term benefit of the business.