Preventive Medicine for Family Firms Facing Predictable Stress Points


Predictable events in the life cycles of families, businesses and individuals lead to predictable psychological reactions.  Foreknowledge of likely psychological fallout from major events and transitions can go a long way to prevent negative outcomes.  Of course every person and family enterprise is unique, and there is some variation in reactions to major changes.  But these variations occur in a matrix whose boundaries are in fact knowable.  Examples of inevitable events in the life cycle of a family enterprise include:

  • Succession (in the business or philanthropic activities),
  • Critical career choices faced by individuals in the family (and these have unique characteristics depending on whether they are in early, mid or later in work life).
  • Accession to or loss of a position of power and control
  • Events leading to two or more “classes” of family members

Both individual and group psychological reactions need to be understood—both are complex and important.  Most often, these psychological phenomena are at least in part unconscious.   And unconscious psychological phenomena can wreck havoc—leading to bickering factions, ill-advised decisions, and resistance to necessary change.

The good news is that we can identify events likely to occur in every family enterprise and accurately predict the psychological stress points that will accompany them, including likely unconscious fantasies, feelings and fears.  Knowledge and anticipation of expected psychological undercurrents allow a family enterprise to take preventive measures, avoiding much of the fallout that an unexamined event might cause.

It’s a three step process:  first, anticipate stress points in the lifecycle of the family and of its individual members.  Second, share knowledge about the psychological stresses that are likely to accompany each particular stress point.  And third, encourage individuals and the family to take specific preventive measures designed to manage the psychology of the event or transition.

This approach makes some people uncomfortable because it goes against a wish to “hope for the best,” “sweep things under the rug,” or a simply  avoid negative, unpleasant, conflictual conversations.  But the best prevention is bringing the potential emotional pain to light, where it can be looked at and discussed. Sometimes open acknowledgement and discussion is sufficient to prevent a problem from arising.  In other situations, open discussion allows for proactive and protective measures to be taken. For family enterprises, the strength of the family’s commitment to its members can be a particular asset.

Here are some examples of inevitable life cycle stress points where the individual and group psychological reactions can be predicted and ameliorated by a conscious proactive process within the family:

  1. A woman in the family takes over a position of power. Both she and the family have to understand the special challenges faced by women in power and the reactions in those they seek to lead.
  2. The classic “mid life crisis”. Many individuals involved in the family enterprise will face a period of restlessness and questioning roughly between age 40 and 45.  Although something of a cartoon cliché, the midlife crisis is actually far from a joke.  At about age 40, the decisions about work and relationships made in one’s twenties and early thirties have borne fruit — or not.  There is a clear path you’ve taken, and not infrequently a panicky questioning about what this means—“Is this the life I really want?”  There is a positive potential to correct course or renew commitments.  And a negative potential for flailing around, impulsively ending marriages or making unwise business decisions out of a need to do something, anything to alleviate the restless questioning.
  3. The challenge faced by leaders in their mid 60’s to age 70, a life phase I call “starting older”—goals have been met, and succession may be in order. But these transitions are difficult both for the leader who is loathe to let go and the generation eager (but perhaps frightened) to step up.
  4. Families face various circumstances that create two (or more) classes of members—those who work win the business and those who don’t, blood relations versus marrying-in, etc. Any time there is a division that creates an in-group and an out-group there is inevitable psychological “regression”. The term psychological regression refers to a situation where significant stress causes a group or individual to lose its best level of functioning—in such a state the group or person’s decisions are less rational and more emotion driven and impulsive, and certain bad but very human behaviors and attitudes are more likely to emerge.  For example, when an in-group/out-group situation occurs, the regression leads to risk of blaming, shame, contempt and alienation.  Open discussion and psychological inoculation can go a long way to preventing these regressive and destructive forces

A preventative approach can help avoid the trouble that can come when these stress points are not acknowledged, examined and discussed by the family or the individuals within it.

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