Far too often we hear about family members having a “sense of entitlement” regards employment within and ownership of the family business. While I am not suggesting for one minute that a “sense of entitlement” paradigm or attitude is not possessed by some family members, I am suggesting that it is not as prevalent as one thinks.

Members of family business have a deep attachment to the business purely because they have been born into it and therefore are acutely aware of the family values and the family legacy. In addition, they have a deep understanding of how the business operates and where it is positioned in the community. The depth of this awareness may be conscious or sub-conscious however it exists in every family member regardless of demographic or status.

You will note the mention of family values and legacy. This is a critical point in understanding why a “sense of entitlement” may be the observed behaviour while in fact the cause is the “weight of obligation and expectation”. Let’s unpack this statement by understanding the definitions (Macquarie Dictionary) of the three key words;

Entitlement – that to which one is entitled, as part of a contract, Will, employment or arrangement

Obligation – (in summary) to be bound or to bind by law, power, force, contract, action, duty, promise, agreement, debt, gratitude, association or relationship

Expectation – (in summary) the act or state of expecting benefit, outcome or profit. A mental attitude in relation to “a thing” being looked forward to

By its very definition, Entitlement is the expectation that the individual has regarding the receipt of benefits to the exclusion of others. It is also a one way paradigm, held by the recipient, where these benefits flow from to the current incumbent to the recipient holding the paradigm.

In this article I want to focus on Obligation and Expectation because they are held by all family members and a perception of the family tradition. More importantly, the weight of these is experienced equally by the incumbents, the recipients and those family members who may not be employed within or own part of the family business.

Family businesses are unique in the area of values and legacy because it is the entire family that demonstrate the family values and it is the entire family that develops and maintains the family legacy. These two also create the traditions within the family, one of which is the handing over to the next generation. For the sake of brevity this article will focus on one family business tradition being the “son and heir” and how the weight of obligation and expectation is experienced across the family in business.

Firstly the incumbent generation; tradition dictates they pass on the business to the eldest “son and heir” because this is how it has occurred in the past. The incumbent may well know that for the best outcome another next-generation family member would be best to take over as they have the competence, drive, attitude, culture and other alignments. However tradition pulls them in another direction that often influences the outcome. They feel obligated that they uphold tradition and consider this to be expected of them by others past and present.

Secondly the “son and heir”; they may well know they are not the best to take over, or they may well not even want to be involved in the business. Yet tradition weighs them down and they accept this is what will occur therefore they behave accordingly, including not expressing their preferences for fear of “upsetting” the incumbent generation. They feel obligated to take over the business as tradition has placed this expectation on them from birth. They also see this as their duty to the family business.

Thirdly the siblings and / or cousin consortium to the “son and heir”; this cohort often respects the tradition with the full knowledge that the “heir apparent” is not the right person or they may know that the individual just does not want it. Due to this weight of obligation and expectation within the family the observed behaviours of this cohort could be that of resilience, silent acceptance, disruptiveness or even rebellion. These behaviours may well be taken for jealousy and a desire to take over however, more often or not, they are an indication there needs to be more thought and discussion to identify the best person to take over. This sometimes results in the employment of non-family members in senior roles.

Gaining an understanding of the high probability that observed behaviours are a reaction to the weight of obligation and expectation provides the opportunity for the family to hold true to their values and legacy while “bucking tradition”. It gives all family members “permission to put the elephants on the table” and have a focused robust discussion about the future.

Succumbing to the mythical paradigm of “entitlement” is destructive to the family and the business therefore it is highly recommended to view behaviours of all family members through the lenses of obligation and expectation. This gives the family a platform to evolve in accordance with the external influences of the business while preserving the family in business.

 

Lloyd Russell is a 4th generation family business member and an accredited family business adviser who is based in Brisbane while servicing clients throughout Australia and internationally. Lloyd is a specialist in family business strategy and governance with a particular focus on inter-generational transfer. He has more than 30 years’ experience in senior management and is an accredited neuroscience practitioner.

Contact Lloyd on 0413 549 748 or lloyd@tcbsolutions.com.au or lloyd@lloydrussell.com.au

Website – www.tcbsolutions.com.au or www.lloydrussell.com.au