Invantage Advising

Category: Family Business

  • Why the Concept of Retirement is Destructive and Needs to be Replaced

    Why the Concept of Retirement is Destructive and Needs to be Replaced

    This article was originally published on Forbes.com in August 2018.  It is the first of a series of blog posts that will reflect the work I am very excited to be doing on a forthcoming book, Starting Older.

    Ask any successful, engaged 65-year-old, “Are you ready to withdraw from life?”

    The words “retire” and “retirement” derive from the French retirer, meaning to withdraw.  The common definition of retirement today is to leave your job and stop working. Words shape our vision and thinking.  As long as we keep using the word retirement or any derivative such as “the new retirement,” that whiff of withdrawal, of closure, of endings will linger.  And so will visions of what the word evoked a generation ago: retirement as the time to stop working and, hopefully, enjoy yourself—travel, play golf, hop on an RV, pursue hobbies. At least until aging and infirmity catch up with you or your partner.

    I want to get rid of the word altogether. The reason is that retirement has come to be used to refer to much more than an event—the day you leave the corporation or law practice—but to a phase of life.  A life stage that usually begins in a person’s mid-sixties and is associated with the end of productive work.

    Psychologically, knowing which phase of life one is in provides structure, orientation and meaning.  A “young adult” automatically gets the idea that she needs to find work and relationships that sustain her economically, socially and emotionally. A mid-life adult understands that his role is to fulfill significant responsibilities—support and grow a family, a business, a community.  After mid-life, post-middle-age, but before infirmity, what are a person’s role and purpose?  Pursuing leisure until we face illness, death and the end of life doesn’t work for the vast majority of  65-year-olds. But “retirement” does a remarkably poor job, even a destructive job, of describing the phase of life that today’s 65-year-old is entering. I call it “starting older.”

    Each person needs to understand the challenges and opportunities of this new phase of life, “starting older,” in order to live it with vitality, creativity and contentment. Though “retirement” doesn’t capture the experience or needs of individuals in this phase of life, most people in their mid-sixties do either need or want to make a major change in the type of work they are doing. These changes involve the nature, setting and type of productivity they will pursue in the decades ahead.

    This new stage of life didn’t exist a generation ago.  We’re living a little longer now—four years on average—and that might contribute to the change.  But the main factor is that during the expectable 20 years after age 65, we are more likely to be healthy and want and need to continue to be productive.

    Consider two composite case examples:

    A multi-generational family business is led by a rather patriarchal 67-year-old. Members of the next generation, now in their forties, are eager to assume leadership of the company and frustrated by waiting. The patriarch has actually agreed that it’s time for him to step down. But every time a plan is proposed, “something happens” to subvert it.  The family keeps reminding him that it’s his turn to relax, to step back and enjoy the fruits of his labor.  “Travel, play golf, spend time with Mom.” All the things he’s postponed or deferred over a lifetime of work. The more the picture of a stress-free retirement is filled out, the more the patriarch’s resistance to stepping down grows. He creates additional obstacles, offers new excuses, even stirs up conflict within the family. Why does the promise of a stress-free life of leisure backfire?

    A founder left the corporate world and started a company that she has grown over 25 years into a solid, thriving enterprise that reflects her character, her intellect and her creativity. Simply put, it’s her baby. Unlike her two children, now in their early thirties, the business hasn’t moved away and started its own life.  She has been approached by a range of both strategic and private equity buyers and has embarked on serious negotiations with eight potential buyers over the last three years. Each deal has fallen apart at an advanced stage, usually over her dissatisfaction with the final terms and numbers.  However, all of the offers would have provided her with at least twenty million dollars in net profit.  And she admits to being tired of the unending stress of feeling responsible for every aspect of her business. Her team of advisors wants her to sell. The market for her company’s service in five years is unpredictable. Additionally, she’ll then be in her early 70’s and a less attractive bet for buyers who want her knowledge and network to help the business grow for the initial period after the sale. Why does she resist selling?

    What is stopping these highly accomplished, smart, creative, driven individuals from letting go of their positions or their businesses?  Some of the reasons are individualized and personal.  But there are some general truisms that apply as well:

    1. Human beings are meant to be productive.
    2. Leisure and relaxation cannot provide meaning and fulfillment throughout an expectable 20 years of reasonably good health.
    3. A person who has spent four decades engaged in highly stimulating, intense work with great responsibility and some power is not going to want to give up stimulation, responsibility or the power to affect the world.
    4. It’s much easier to let go of something vital to you if you see something equally engaging ahead.

    The patriarch and the business owner in the examples above are likely to be experiencing great anxiety about what their lives will be like after the sale or succession is complete. Yet their advisors rarely talk to them about what they will do next. Someone who has not spent considerable time planning for a productive future may only see a black hole ahead and will unconsciously resist changes that on the surface seem both logical and desirable.

    I’d like to see everyone who is rounding the corner of age 60 begin to think about the next phase of their productive life. By the time they sell, or step aside or “retire,” they should have a pretty clear vision and plan for fulfilling the psychological necessities that all of us gain from work—a sense of having an impact, making a contribution, being connected, being creative.

    Copyright Prudence Gourguechon 2018.

     

  • Preventive Medicine for Family Firms

    Preventive Medicine for Family Firms

    Thanks to the The Family Firm Institute Practitioner for publishing my article on “Preventive Medicine for Family Firms Facing Predictable Stress Points”. I emphasize the value of getting negative emotions and fantasies out in the open and under discussion. The toxic potential of a transitional event dissipates with airing, continued awareness, deepening understanding, and some straightforward strategies.

    For many people, it is counterintuitive to bring up anticipated bad feelings, conflict, or possible negative outcomes. We want to hope for the best, not voice our fears and doubts. But in fact, it is much better to voice potential dangers and obstacles and agree to face them as a unified group.

    I focus on 3 key family enterprise stress points, events which are predictable. Knowing an event is going to occur in the normal course of things means you can implement some preventive measures to decrease emotional fall out. In the article, I look at three typical stress points in the life cycle of a family business: divisions in status, the “classic” mid-life crisis of 40-somethings, and the life phase I call “starting older”. Read the full article here.

  • Getting Comfortable with Power: Ten Tips for Women Leaders

    Getting Comfortable with Power: Ten Tips for Women Leaders

    Women leaders get a little squirmy when it comes to the idea of wielding power. But getting comfortable with power and using it confidently is an essential part of being an effective leader.  Like it or not, all women leaders are in a bind because great leadership requires a high degree of agency–independence, forcefulness, ease of decision-making, dominance.  Yet gender norms still expect women to be communal– nice, interpersonally sensitive, collaborative.  Managing these conflicting demands is a career-long challenge for women leaders.  Meanwhile, though, you have to learn how to appreciate and use the power you have.  Here are  ten tips.  Some of them are counterintuitive, and some will make you uncomfortable.

    1.Learn the topography of power

    Where does it live? It is valuable to operationalize power—break it down into the concrete actions and strategies where it resides. Among the myriad opportunities to exercise power in a leadership position are: directing the use of resources, setting the agenda of meetings, decide who is included in and who is excluded from communications, highlighting what you want people to pay attention to, ignoring what you want ignored, and selecting and removing personnel.

    2. Know and defend your own agenda

    Ideally, you should carve this in stone before you get in your position, or at least as a first priority. What do you want to accomplish with your power?  You will

    immediately be bombarded with “other peoples agendas” or their problems. Your time can be entirely consumed if you’re not vigilant about avoiding a responsive, reactive rather than proactive position.  The reason this tends to be more of a problem for women is that due to some combination of biology and socialization, women tend to be more adept at automatically scanning the environment and registering peoples’ needs and feelings. This strength is a mixed blessing.  You MUST know what your agenda is and your priorities are both in the long run and on a daily and monthly basis, or you will never get to make use of the power you have.  Do not let other people’s problems and priorities divert you from your own.

    3. Be alert to and revise your communication style

    • Don’t apologize for making other people unhappy.
    • Don’t apologize for making a decision.
    • Don’t apologize for not including someone in a conversation or decision.
    • Say no or ignore everything that doesn’t advance your agenda (take a look at Greg McKeown’s book Essentialism published by Crown Business, 2014).
    • Don’t apologize for anything unless you have actually done something wrong that you should apologize for– like a genuine mistake, oversight or unkind act. Then apologize quickly, cleanly and acknowledge the impact of your mistake.  And move on.
    • Don’t explain your decisions. Or if you must, keep it very brief.
    • Repeat yourself when challenged rather than offering alternative arguments.
    • End discussions when they’re not going the way you want.
    • Don’t ask for permission. Go for what you want, and if you’re stopped, so be it.  It rarely happens.
    • Only ask for opinions if you really want them. Don’t seek too much input.
    • Don’t worry too much about social niceties—if someone is hard to reach, leave a voicemail or text; don’t wait until you get in touch with them. But be nice if you can.

    4. Keep control of structures and processes

    Set things up your way.  If you want 6 people on a task force, get 6 people on the task force even though one of the group suggests 10.

    • Beware of the seductive c’s: COLLABORATION and CONSENSUS.  Women are supposed to better than men at making use of these values.  Maybe we are, but overuse can lead to perceived weakness, bullying and paralysis. Learn to live without consensus when you have to.
    • Anticipate, anticipate, anticipate. Think through how people are going to respond when you roll out a plan.  Plant allies in place to back you up, and have an exit strategy in case opposition takes over the process. If you don’t have enough support to push something through or avoid a controversy, consider waiting to put it out there, because failing weakens your power.
    • Know when to quit. Keep asking yourself what am I getting out of this.  If you’re not getting a lot, figure out how to get more (money, opportunities, fun, stimulation, experience).  If it’s hopeless, just get out.
    • Keep your promises and commitments, but within reason. Not if the cost for you is too high.  If it is, bow out, or say you changed your mind. Sorry.
    • Let people come to you. Your neighborhood, your office, your available time.  Even if you can accommodate, resist the urge, because most women do it way too much.
    • Never give up the chair either physically or metaphorically (i.e. control of a meeting, a microphone, an agenda, a project).

    5. Learn to seek, get and use help

    Learn to use an assistant, which may not be so easy as it sounds. Find a private peer group with women at the same level of responsibility that you have.

    6. Don’t wait too long to accept positions of leadership and power

    Men don’t.  Don’t underestimate your competence. If people want you to lead, accept the challenge if it’s a good time for you. And learn what you need to catch up. On the other hand, don’t let your competence be exploited.  Many extremely talented women are unaware of the extraordinary level of their competence. They are used by others in various ways (though this can be unconscious)—for example, put in a leadership position when an organization is in crisis.  Wait until it’s a good time for you to move your agenda forward. Watch out for flattery.

    7. Never underestimate the aggression in women and envy in everyone

    Women are just as aggressive as men, but their competitiveness and aggressiveness shows up in different ways, many of which are subtler. This point is going to make some people mad, but I truly believe it. I’ve seen it often in my clinical practice over three decades.  Expect envy and undermining from some women, outrage from some men.

    8. Be aware of the “Mom transference”

    The most powerful person in every single human’s life was his or her mother.  We all carry ambivalent unconscious feelings and fantasies about this omnipotent woman who once controlled our lives from the moment we woke up till our last diaper change. We tend to unconsciously attach these feelings to leaders and bosses we deal with later in life (that’s the “transference” part, a remarkable useful concept from psycyhoanaysis).  The people in your company or organization are inevitably going to experience you with traces of this early omnipotent mother overlay.  You want to evoke positive emotional traces—be someone who keeps people safe, meets their needs, runs a reliable “home”.  And avoid acting in ways that evoke unconscious traces of the negative mother memories—don’t use language (or finger pointing) that triggers feelings of shame or helplessness.

    9. Prepare to be attacked and criticized unfairly

    From the moment you enter a position of power, you’ll be a target held responsible for everyone’s hopes, demands and disappointments. You can’t meet all these needs, so you will be attacked from time to time.  When this happens, it’s inevitable to feel hurt, and a little psychologically disorganized, so get help from a trusted advisor about whether or how to respond.

     10. Use knowledge you may have because you are a woman to your advantage

    For instance, women are more apt to understand that:

    • It’s not a bad idea to feed your people from time to time. For the eternal child inside us all, food equals being cared about. Free food sends a direct signal to our unconscious that someone is in charge and has our backs. Also, hungry people are cranky people.
    • No one ever wants to be humiliated. You can structure your actions and difficult decisions in ways to minimize humiliation in the people effected.
    • What everyone wants more than anything else is attention and acknowledgement. Build this in to your company, your meetings, everything you do.

    copyright Invantage Advising 2017

    Updated 8.2.17

  • Starting Older: Understanding and Making the Most of a New Life Phase

    Starting Older: Understanding and Making the Most of a New Life Phase

    “What do I do now?” This question hits with a thud just a few times in our lives. Leaving college for the “real world”, after a divorce or when the nest empties, and again with ferocity when one is facing entering a phase of life between mature adulthood and old age.

    This phase of life involves profound shifts in relation to yourself, your work, your family, and your engagement in the world. As I thought about it more, realized that as important as it is, it didn’t have a name! I decided to call it “Starting Older”. It’s past “the prime of life” and past late middle age, but it is not equivalent to “retirement” or elderhood.

    If you’re entering this new life phase now and have spent your life in business or the professions, look back ten years. A decade ago you were at the peak of your career–running a business, a department, or an organization, or churning out articles. But now, you’ve been in your career for 30 or 35 years. Your professional life has been, one hopes, very satisfying, and should be a great source of pride and accomplishment. But for many it no longer feels new or fresh. Sometimes you feel like you’re on autopilot, or you’re not quite exactly as sharp as you used to be. Attrition through retirement and death is gradually thinning your business network. Being great at what you do no longer feels like enough or, sometimes, even important. You’ve already mentored a younger generation, in your 50s and early 60s. You really don’t want to mentor that much anymore. Maybe, secretly, you don’t especially want to give, or produce, or join or engage. At least not in the same ways you’ve always done.

    In business, getting on top of the challenges and subtleties of this phase of life can be essential in preventing disastrous missteps relating to succession and timing of “exits” or poor judgment about when or whether to sell a business. In family businesses, generational conflict can fester or erupt when those who are facing “starting older” can’t actually face it.

    Working with clients in my consulting practice who are “starting older” is an exciting enterprise for both of us. This time of life is a chance to pick up threads of your self that you’ve dropped along the way. It’s an opportunity to gently shed or refuse commitments that meet others’ needs but not your own, at least not any more. It provides radical possibilities for being really free, productive in new ways, and even to re-invent yourself.

    This new state of life, though no less impactful than the mid-life crisis, is quiet and often subtle, though new awareness can hit like a flash of light. Still, it tends to inspire contemplation, not revolution.

    Subjectively, it does not feel like the beginning of old age. It begins about age 65, or a few years before. It ends when serious aging becomes more of an issue, in one’s late 70’s or 80’s most commonly. You feel creative and productive, but for a variety of internal and external reasons, just continuing to do what you’ve been doing since you were in your 40’s and 50’s doesn’t make sense any more. So what do you do now?

    You’ve just passed the peak of an arc. Energy and vision drive it upward through your 20’s, 30’s and 40’s. In your 50’s you might realize you’ve accomplished everything you set out to (noticing that with some surprise) and it feels good. A decade later, the pitch of stimulation is gone.

    There is little guidance for those of us hitting this new life phase. It’s not well-defined or characterized in the psychological or sociological literature[ Or the literature on family business]. There’s a good reason for the lack of definition and consideration of this life phase. For most people, it didn’t really exist before. Living longer and living longer healthy and active have literally created a new stage of life.

    I’ve written an article (posted on this website) that I hope will be the germ of a book on this important and intriguing subject. Thousands of words and dozens of books have already been written on aging baby boomers, and how their “retirement” and aging will be unlike previous generations. But I don’t think the psychological and subjective aspects of this new version of aging has been adequately explored or understood. In my article and the book to come, I describe aspects of the personal, subjective experience: a turning inward, a need for change, and a new experience of time.

    There’s a negative side to the life phase “starting older” including coping with loss of power and influence and facing the need to make room for a new generation without feeling injured or undone and grieving for . A person who has not acknowledged that he or she is facing a very different stage of life and who has not had a period of reflection and preparation can experience this new time in life as if they are facing a terrifying black void.

    Because it is a “new” phase of life not often experienced by previous generations, there is no established roadmap for living it with intelligence and freedom. In my article I sketch out some key components that contribute to making this time of life most satisfying: the need to face reality with clarity and courage (and avoid denial), the need to seek novelty and pursue creativity; the importance of increasing freedom, the satisfaction of identifying and fulfilling abandoned dreams and talents, and committing to doing only what is most essential.

    I’d love to hear your reactions to my thinking on this subject—especially if you are one of the hundreds of thousands of people who are now “starting older”. You can read my article here.

  • Preventive Medicine for Family Firms Facing Predictable Stress Points

    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.