Dave Ciambella

Succession Pitfalls: Are You Properly Preparing Your Children to Take Over Your Business?
November 30, 2007

The truth is some are and others are failing miserably. Enablement in the family business arena runs rampant as parents at times create positions for children when none are available, often overpay their children and do a poor job holding them accountable. Unfortunately, this sends mixed messages to other employees.

Several years ago I worked with a blended family where the father had a child from a prior marriage and a child with his present wife. They owned a successful business in which the son from the first marriage worked in the business for approximately 15 years. His stepbrother worked in the business sporadically, but basically came and went as he pleased and was never held accountable for anything. The kicker here was that his compensation remained constant whether he worked in the business or was out goofing off around the town. This created a great deal of frustration and resentment between the brothers especially since the parents’ estate plan was designed to be split equally among both boys. The child who worked in the business was constantly under the microscope by his stepmother, who resented him despite the fact that he was a significant contributor to the business’ success. Resentment is natural in a blended family environment, but clearly it is unfortunate.  

Hopefully, the above example gives you some insight as what NOT to do when employing your children and attempting to prepare them to take over the business. While it is natural for a parent to want to protect their child, sometimes it is in the best interest of the child, the business and family relationships to exhibit accountability and tough love.

Posted by Dave Ciambella on November 30, 2007 | Comments (0)