Dysfunctional family business filter, please listen to your employees
August 13, 2015 10:45 AM   Subscribe

How do we tell our boss (my father) that there are serious problems in our family’s business when he refuses to listen or acknowledge the problems?

We are a manufacturer’s representative firm and (dysfunctional) family business. My father is second generation and owner my brother and I the third. There are 4 main stakeholders in the company and succession is being discussed. All 4 of us are concerned about where the company is going and the numerous problems we see and when we bring them up to pops he refuses to listen.

We don’t want to become the statistic of family business: only 30 percent of all family-owned businesses survive into the second generation and only 12 percent will be survive into the third generation. Surprisingly, only 3 percent of all family businesses operate at the fourth generation and beyond.

Here are some of the problems:

- No long term planning or much short term planning.

- He takes on business deals that often have little chance of succeeding even against the advice of the reps in the field. We go on a lot of wild goose chases.

- He refuses to see that realistic side of things preferring to always be positive. He actually very seriously into the law of attraction and believes that it is the way to work and live his life. He avoids problems even when they are obvious to others.

- Some companies we represent including our most important one do not think too highly of us anymore.

- He has not even visited his most important territory in years.

- There is little good communication between the different offices.

- He comes in late and leaves early daily. He‘s really not working very hard which is his right but he really should delegate things to us. Due to this we are not really being prepared to run the business one day.

- He really doesn’t know what’s going on with his business anymore.

We all just think he is unfocused and getting out of touch with the business. If there is a disagreement he has the attitude that he’s been doing this the longest and therefore right. We all think he is just bad at running a business, but he didn’t use to be this loose and maybe is just losing interest.

We all discuss these things behind his back (which is not good) but we are all concerned and want to have some sort of intervention. We just want things to be better especially as the company is theoretically to be sold to us.
posted by Che boludo! to Human Relations (15 answers total) 2 users marked this as a favorite
Are you willing and able to walk away? Just drop whatever interest you have in the company, give your two weeks notice, and send out resumes? Because that might do it. Tell him you don't want to inherit a shambling wreck of a company that will die and/or kill you.
posted by Etrigan at 10:52 AM on August 13, 2015 [7 favorites]

You have a lot of complaints. Do you have solutions?

Family or not, if I went to my CEO and said "you're doing 1,2,3,4,5,6,7,8,9 wrong" it would not be a very long or productive conversation.
If you're the level of management right below the owner make a plan with solutions, benchmarks and goals. Present that to him.
The only way I've found to effectively address issues above my pay grade is to get more involved and start taking those issues on.

If that doesn't work? move on.
posted by French Fry at 10:56 AM on August 13, 2015 [19 favorites]

By '4 main stakeholders', do you mean that your father does not, in fact, own a majority of the company? If yes, perhaps it's time for a stockholders meeting, at which a new CEO can be elected.
posted by easily confused at 11:24 AM on August 13, 2015 [11 favorites]

I agree with French Fry in that if you're going to bring up problems, you better have at least 3 possible solutions for every problem.

What might work with your father is cold, hard evidence.

He strikes me as an old school, no-nonsense kind of guy.
Numbers don't lie and if you can bring a few pieces of paper that show, explicitly and simply, how a decision he made, or failed to make cost the company money, then you might be better off than having some sort of Airing of the Grievances.

Once he sees how his actions or inactions are truly costing the company money, time and goodwill, he might be more receptive to changing things for the better, albeit slowly.
posted by Major Matt Mason Dixon at 11:25 AM on August 13, 2015 [3 favorites]

Is your father close to retirement? It might be easier to take over the business than it would be to get him to change. If he doesn't want to fully retire, maybe he'd take on a reduced role and let the next generation run things.
posted by alms at 11:27 AM on August 13, 2015 [4 favorites]

Don't even try; this dynamic is one of the many reasons family companies don't survive into the fourth generation. But there is a solution.

You need an neutral third party to conduct an analysis of your company independently, deliver the findings and facilitate the four stakeholders into agreeing to a plan. If he/she is skilled, getting everyone's trust is going to be easy. If you're prosperous enough to have multiple offices, you're prosperous enough to hire a consultant.

Focus on getting agreement that all of you and the business too will benefit from an outside perspective and designing a process for finding/selecting someone who has the tools--interpersonal and analytical--to address the problems. Focus on being transparent and scrupulously fair so Pops doesn't feel railroaded. Try to give him a stake in the outcome, e.g., by crediting some insight he had with sparking the idea.

There are folks that specialize in succession issues, small businesses, your industry, etc. The right person is out there.
posted by carmicha at 11:34 AM on August 13, 2015 [3 favorites]

He sounds proud. I don't think he's going to really hear you (or a 3rd party) alone. Or he might pretend to for a minute, but then will probably go on to do what he wants anyway. He might hear some of the clients, if there's a way of his getting that feedback face-to-face. (Though he will probably then want to step up with a solution that he thinks makes sense, which probably won't be the one you think makes sense.) I don't know, maybe you can ask him if he'll let you handle one or two problematic clients and "prove" your ability to manage them -- he might feel ok about giving you the stress he doesn't actually want.

I think that's sort of will ultimately work - slowly taking over the things he doesn't really want to deal with anyway ("let us worry about that for you"). And damage control - giving him some low-risk vanity projects on the side. Maybe, you could at some point have an honest conversation with him. "Do you really want to deal with this, Dad? What do you really want to spend your time doing?" And yeah, see if you can arrange some kind of honorary position/title for him that will flatter his ego and accommodate his interests, but keep him away from actual business. (And call the new de facto CEO something less prestigious that won't trip him off, like "Director of Operations" or whatever.) Something along those lines, anyway.

tl/dr what alms said.
posted by cotton dress sock at 12:48 PM on August 13, 2015 [1 favorite]

It is possible you have discovered one reason why so few family companies survive to be multi generational. My focus, if I were you, would be on finding a polite and constructive way to walk away, which will be hard enough.
posted by deadwax at 12:53 PM on August 13, 2015 [3 favorites]

I agree with the need for an outside perspective as carmicha suggests. The question is how to persuade dad that process is necessary. Is there a board of directors? Does it have outside directors? Or does the company have a law firm your father trusts? He may not want to listen to you, but if you work through the outside directors or law firm, they may be able to persuade him. Or try involving an auditor, or banker.
posted by beagle at 1:00 PM on August 13, 2015

Cotton dress socks' ideas about relieving Pops of the burden of things he doesn't want to do anyway are good. That's another way a consultant can be helpful; it provides cover for him to get out from under things without admitting or acknowledging any loss of interest or competency. He can grumble about the consultant all the way to the golf course.

A good consultant won't just get the four sharesholders to agree to a plan; s/he will negotiate contingent commitments including realigning responsibilities and reporting relationships. S/he will preferably stick around for a little to make sure things are on track. Full disclosure: I am a consultant who deals with organizational midwifery, so I am biased. So many times, though, my clients have gotten unstuck just because they were paying somebody else to be the confessor, older sibling, tough love strategist. Paying for help creates momentum and a sense of urgency born of the desire to "get our money's worth."

Another idea for a different kind of outside party involvement... Would he accept a coach ostensibly for a different kind of issue to which he admits (e.g., Coping with the kidz' crazy Internet ways. Justa buncha tubes amirite?) but really for all of the other stuff?

On preview, beagle's comments about the influence of outside interests/advisors are good too. And Pops' wife, if still alive, might be able to lean on the need for succession planning and "making sure the kids have their act together before you hand over the reins."
posted by carmicha at 1:02 PM on August 13, 2015

Or what about getting someone--either an outsider or perhaps you and your brother as part of your "taking over the business" education-- to talk to the major customers about how they see things, what's gone right/wrong, points of frustration, etc. perhaps preserving their confidentiality? Handled well, it creates a very targeted to do list vis-a-vis not only customer relations, but products, processes, etc. You can learn an awful lot that way and it gives you another chance with the important ones that are beginning to drift away. If you and your brother took the time to meet with the significant and/or growing customers, visit the forgotten territory, etc., you could help create the brand new day and shift the relationships.
posted by carmicha at 1:14 PM on August 13, 2015 [1 favorite]

It sounds like you do need a third party to talk to your father. Are there any trusted family friends - old friends of his age/generation - that can advise him? It sounds like he did well with the business when he was younger but may be losing touch with age. If he has any friends who have gone through similar experiences (running a family business and handing it over to their children gradually), maybe they can approach him and talk to him.
What about your mother or other family relatives? Do you think they can talk it over with him?

Your father doesn't sound like the sort who would welcome a 'consultant' or 'hard evidence', but if you can find someone he is genuinely close to that could be your advocate, I think that could help.
posted by aielen at 1:43 PM on August 13, 2015

There are consulting companies that deal with exactly this, right down to the dysfunctional family issue. You would want a company that specializes in this, and not just a general consulting company. They have processes and help plan succession and work through the stuff you haven't even thought of.

How you get your father to agree to bring them in? That one's all you.
posted by clone boulevard at 2:50 PM on August 13, 2015 [3 favorites]

Maybe this is obvious or completely off-base but I'll go ahead and say it - I think transition planning, for your father, means acknowledging that he's not going to live forever. Telling him that he needs to start turning things over is like saying that his productive years are behind him. Losing responsibilities at work means he's one step closer to losing his independence, losing people his age who he's close to, losing his driver's license, eyesight, etc. If he doesn't act, you might lose the company any at some point in the future but for him, looking ahead, he's going to lose everything, including his life, regardless of whether he does something with the company.

I don't know how you help people prepare for that loss but I think love and respect would be the best place to start. Maybe if you say, Dad, I love you and I'm so proud of you for building this company but I'm scared because I don't know how you do it and I'm worried I won't be able to do it as well as you do. I don't know if that will work but I think talking about it like that flatters his ego which is imperative for preserving his pride.
posted by kat518 at 3:33 PM on August 13, 2015 [1 favorite]

First of all, based on your past question history, this has been an ongoing issue for you, yes?

It's really hard, because people in N. America aren't savvy in business dealings with other cultures. Perhaps your father has relationships that he's cultivated and wants you to recognize that? Maybe he wants to be admired for his prior work. So some sucking up and respect would maybe get you a long way.

Second of all, it's hard to get older people to see your way, in any business. I was a marketing manager of a business, and I was doing some exciting things, until the owner came in and his second in command, and they put the hammer down on me. I was following direction of the General Manager, whom he had hired, but woe betide me, because I was now caught in the middle of a conflict.

My eventual solution was to walk away. I can only serve one master, and my GM was a good one, but these other folks were all full of crazy.

You seem very talented, and educated and curious. Why do you stick with these folks? Why don't you find a friend and strike out on your own? If he is driving it into the ground, as you say, and he has the power, then why not go do something else? If he does not, then why are you worried?

Respect goes both ways. If you have a valid reason for questioning your father, and others see that, then go for it, but at what cost will you take your father away from his business? It seems a shame. It might be nicer if you bowed out and went your own way with some other people and let them go at it as they like. Just my two cents, maybe that would make you "selfish," but it would keep you from fighting with your family, and maybe give you some peace of mind.
posted by Marie Mon Dieu at 4:04 PM on August 13, 2015

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