The agony of quitting the family firm - business members quit due to lack of opportunity - Family Business: Observations - Brief Article

Nation's Business, Sept, 1995 by Sharon Nelton

Last year, Maureen resigned from her family's general contracting business, and Paul quit his family's plastics company. They feel they had no other choice.

Maureen and Paul (not their real names), both 35, gave many years to their companies--Maureen, eight, and Paul, 10. Their reasons for leaving were strikingly parallel: They felt they had no opportunity to advance or achieve in terms of making decisions or taking on responsibility. Both experienced conflict with the senior generation over the direction of the company.

Both desired to be owners of their families' businesses one day, and Maureen was the obvious successor to leadership. But Paul, whose company was bound up in a power struggle between his father and himself on one side and his aunt and uncle on the other, had no ownership. While Maureen held minority ownership on paper, she was expected by her father to treat her portion as his, abiding by his decisions.

Paul worked well with his father and faulted his grandfather for willing ownership of the business equally to the four children, leaving no one in control (one had left the business earlier but still was an owner). Paul's father was virtually forced out by the remaining siblings.

Unlike Paul, Maureen had difficulty working with her father. Although she had held an excellent corporate management job before she joined the family firm, her father belittled her, telling her she didn't have the skills necessary to run the business. Her self-esteem plummeted.

Furthermore, the fact that her parents had not saved money outside the business for retirement and that they expected it to continue to support them in a luxurious lifestyle, even if she did take over, weighed heavily on her. "How am I ever going to support these people?" she recalls wondering. She began to consider suicide.

Maureen and Paul both felt that to save themselves, they had to leave. The unresolved conflicts and bitterness and the resulting departures have been agonizing not just for Maureen and Paul but for the entire families and businesses as well. Paul's family's firm has already been purchased by a competitor--at a price lower than the family might have realized had the members held together. Paul's aunt and uncle have suffered serious health problems, which Paul attributes to the stress of the conflict over the business.

Maureen has started her own business as a consultant. Of quitting the family firm, she says: "For the first time, I felt really free. It was really wonderful." She is enjoying a better relationship with her father now that she's not in business with him.

For Paul, right now, the pluses are few. He's working for somebody else and misses the flexibility he had in the family business. He has to travel a lot more than he used to, so he's seeing less of his wife and children. And he misses working with his father.

"I've been through a heck of a lot in the last year, and I don't know that I'm over it," says Paul. "I don't know that I ever will be over it."

Both Maureen and Paul now earn less.

What could have prevented their leaving? Paul and Maureen respond to that question next month.