Narcissism in Family Businesses

By Prof. Enrique Soriano

Recently, I completed a demanding strategic planning engagement with a third-generation family conglomerate in the Middle East. The work was intense but deeply rewarding. Just as I was wrapping up, a trusted governance colleague reached out urgently: Could I make a brief detour to Eastern Europe?

I agreed – and soon found myself part of a three-man team with a critical task: to dissect, understand, and help stabilize a family business on the brink of collapse. At the heart of the crisis was a successor who had become a textbook example of narcissistic leadership.

No names. No countries. Confidentiality is sacred in this line of work. But the lessons are universal – and increasingly relevant for family businesses worldwide.

The Quiet Collapse

The signs were unmistakable:

• Grandiose self-importance
• An inability to accept feedback
• A deep belief in personal infallibility
• A habit of rewriting history to avoid accountability

This wasn’t just poor leadership – it was a ticking time bomb. One that destroys trust, erodes culture, and dismantles decades of hard-earned legacy.

Family businesses live and breathe on emotion – shared memories, implicit trust, pride across generations. But when narcissism takes hold, that emotional connection can become a dangerous shield. Love silences dissent. Silence breeds complicity.

How It Spiraled

The founder, a visionary with big dreams, had every intention of preparing his son to lead. But in his zeal, he overindulged: too much praise, too few boundaries, too much unchecked authority.

When the son finally took the reins, checks and balances were absent. Siblings were marginalized. Experienced executives sidelined or silenced. The board? A paper tiger. To question the successor was seen as betrayal.

Style trumped substance. The successor cultivated loyalists who echoed his every move, while skilled professionals either left quietly or disengaged. Those who remained were too intimidated to speak up and too loyal to walk away.

The most heartbreaking part? The founder was painfully aware. But guilt, fear, and emotional investment left him paralyzed.

The Narcissism Trap

Narcissism in family businesses rarely begins with arrogance. It starts with overprotection – grooming successors in a bubble, shielding them from failure, and creating fragile confidence disguised as strength.

There are two kinds of successors:

1. Those forged in adversity, who earn their respect through accountability and grit.
2. Those handed the crown, who demand loyalty, reject challenge, and seek applause.

The latter mistake leadership for domination and succession for entitlement. They see the business as their personal kingdom, not a shared legacy.

The Path Forward

The answer isn’t confrontation—it’s governance.

Strong governance frameworks provide the guardrails necessary to protect the family enterprise:

• Independent board members who can challenge without fear
• Clear role definitions and performance standards that apply equally to family and non-family members
• Transparent succession plans involving broad stakeholder input
• Advisory councils that offer objective wisdom free from emotional bias

After a focused five-day diagnostic, we dove into interviews, system audits, and culture assessments. Our goal: not just to stop the damage but to reconnect the business with its core values. Restoring trust among family, leadership, and employees is essential. Only then can the company rebuild a foundation sturdy enough for long-term success.

Can this family business be saved? Absolutely – but only if its leaders are willing to do what narcissists resist most: listen, reflect, and share power.

In my next article, I’ll expose the inner workings of the narcissistic mind – how it distorts truth, punishes honesty, and rewrites history. More importantly, I’ll share how families can reclaim their voice before it’s too late.

Because in family business, legacy is never just about wealth – it’s about wisdom. And wisdom requires structure.

*****

The W+B Family Governance Leadership Masterclass: Securing Your Legacy for Generations Only a few slots remain – your family’s future can’t wait.

Running a family business today is more than just profit and growth—it’s a race against time. Succession battles, power struggles, and emotional blind spots can quietly erode what took generations to build. Without clear governance and alignment, even the most successful businesses risk collapse when transitions happen.

The window to prepare is short.

That’s why the W+B Family Governance Leadership Masterclass is returning for its highly anticipated second edition—now set for July 9 & 12, with graduation events in Cebu, Manila, and Iloilo (Dates TBA).

This intensive three-day experience is tailored for business families ready to act decisively. Through dynamic virtual sessions and an exclusive in-person graduation, participants will:

• Master the fundamentalsof family governance and legacy-building
• Decode succession planningto prevent future power vacuums
• Create a roadmapfor harmony, accountability, and sustainable leadership
• Build alignmentacross generations before differences become divisions
• This is more than a workshop. It’s a turning point.

If your family is serious about building a legacy that lasts, the time to act is now. Slots are extremely limited.

Call 09173247216 or Email service@wbadvisoryasia.com

Look for Julia.