The Dark Side of Founders/Business Owners

By Prof. Enrique Soriano

“True success is not achieved unless there is a successor to continue succeeding. This principle is not found in leadership books or conferences, but rather in the Bible. Jesus anointed twelve to carry on the gospel of the kingdom and they in turn appointed others to follow them.” (Pastor Myron 2011). This is the way succession is supposed to work, and if it does not, then founders and business leaders have miserably failed to complete their mission and their success will be nothing but full of disappointment, heartaches and their efforts of building their businesses for decades will be all for naught. Worthless.

The statement “I am in full control of the business!” personifies many founders of this world. They remain at the center of all major decisions and they tend to have little trust in others. Unless a transformation to a more professional structure happens before the founder dies, these types of founder-centric firms do not always survive. George knew that succession planning was an inevitable event but he chose to set it aside. Rev. Woodward said it clearly, “We are in desperate need of leaders who will pass the baton while they still have strength to cheer.” Sadly, George never made it.

Why do founders refuse to give up control?

The question begs to be answered, why do most founders refuse to give up control or even share power with their offspring? I am using the term ambivalence. It is the only word that best describes one of the founder’s dark secrets. And it’s a damaging behavior that is causing many failed successions. In George’s case, when he deliberately postponed naming his successor, death came knocking and it was too late.  In hindsight, George avoided naming a successor because he didn’t want to hurt family members who would not be chosen to succeed him and his reluctance to plan a succession plan resulted in rivalry between himself and his children.

Psychologist Harry Levinson clearly defined rivalry as a “fundamental psychological conflict in family businesses compounded by feelings of guilt. For the founder, the business is an instrument and an extension of himself. So he has great difficulty giving up his baby, his mistress, his extension of himself, his source of social power, or whatever else the business may mean to him. Characteristically, he has great difficulty delegating authority and he also refuses to retire despite repeated promises to do so.”

Levinson added, “this behavior has certain implications for father-son relationships.  While he consciously wishes to pass his business on to his son and also wants him to attain his place in the sun, unconsciously the father feels that to yield the business would be to lose his masculinity. At the same time, and also unconsciously, he needs to continue to demonstrate his own competence. That he alone is competent to make “his” organization succeed.” In the case of George, he fit the description highlighted by Levinson. George went on to procrastinate and instead of doing what’s necessary, he maintained a façade that he was still in control.

A Founder’s Dark Side

According to Peter Davis, in his well-written article, Three Types of Founders–And Their Dark Sides, “Much of the difficulty in passing the business to a new generation arises because many founders are not aware of, or willing to deal with, this dark, less constructive side of the personality. The children are controlled like everyone else. To them, father is an all-powerful figure, almost God-like. Sons are expected to enter the business as a matter of loyalty; they are given little choice.” 

Davis drives home a good point, “The children’s behavior depends a lot on the relationship between father and mother. If the mother accepts the father’s behavior uncritically, the children will probably choose not to fight, in order to survive; they may become passive and submissive. When they join the business, they may keep their distance from the founder…”