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April 26, 2019

When Should You Fire Your Child? Part 2

 |  By: Mike Opperman

Is the child in the right role?
Can you shift jobs or responsibilities so they are in a better fit? 

“This is a tricky topic to broach with your child, but in our experience, people who are struggling know they are,” Walsh and Francois say. “They may trudge on out of pride or a sense of obligation, but it will wear them down.” Ask your child what they are interested in to determine where the best fit might be within the business.

Could you be the problem?
It’s not uncommon for the older generation to resent the younger generation nipping at their heals to take over the business, Walsh and Francois say. 

The toughest question to ask and answer is this: Is the problem truly your child, or is it you? 

“Sometimes the desire to be needed can morph into the presumption that the next generation is not and will never be ready,” Walsh and Francois say. “If there’s even a chance this is why you want to fire your child, pump the brakes.”
Ask yourself if you want the business to be successful in your lifetime, or if you want it to thrive after you are gone. If you want longer-term success, then you will need to establish a succession plan that carries success forward.

The “fire, not fire” decision is multilayered and made more complex by family dynamics, Walsh and Francois say. For example, if there is more than one child who can succeed you, then you may still have options for continuing the family business. But if this child is the only interested or possible successor, you will need to figure out how the business will continue when you want to retire. 

If all of the options don’t work and firing is the solution, Walsh and Francois advise you to wear the right hat: the employer one, not the parent one. “You are letting your child go as an employee, but not as a child,” they say. As one story goes, an executive, wearing his “CEO hat”, told his son he was fired. Immediately afterward, he put on his “dad hat” and said, “Son, I’ve heard you’ve just been fired. How can I help?”

 

For additional articles on transferring the business to your children, see below:

10 Steps for a Successful Management Transition 

Brothers Prepare To Take Over The Family Farm

Avoid These 5 Estate Planning Mistakes

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