Case Study: The Parents Who Won’t Step Down
 By
Henry D. Landes
Spring 2002
I am a 47-year-old woman who works with two siblings, my husband
(age 50) and my two 73-year-old parents, who simply will not retire.
My parents are president and vice president of the company, and
I am an officer. My dad is the sole stockholder.
Both of my parents are smart—no question about that—but
in some respects they are failing because of age. My mother attempts
to control the day-to-day operations, and it’s becoming
apparent that she must stop. She can barely type an order and
sometimes says things that don’t sound professional. My
father suffers from other age-related problems. Some days they
are fine and other days they almost look goofy. It’s quite
a strain on the other family members, and in the past six months
it has even become obvious to our employees and suppliers.
My two siblings don’t contribute to the business the same
way my husband and I do. They actually work in real estate on
the side—all agreed upon by one or both of our parents.
I have worked with my parents for more than 22 years, and my
husband has worked with them for more than 20. I have spoken to
them quite frankly, and when I do so things improve a bit. Then,
within a week or so, things revert to the way they were. I have
other siblings outside the business who have also tried to speak
with our parents. But our parents started the business, and it
is their life. They live to work.
Theoretically, I can leave, but we would not make the income
that we need to support four children. I do like the business,
and I’m quite proud of what my parents have accomplished.
I admire how they struggled and not only survived but also thrived.
But they have broken all the verbal promises they have made about
turning over the business.
I know my mom thinks no one can do it as well as she can. And
that might be the truth. They have no intention of retiring. What
can I do?
HENRY LANDES’ REPLY:
One sage has said if business owners don’t retire by 70,
they won’t. Yes, for many entrepreneurs retirement does equal
death. Since they own all the stock, your parents can and just might
"die in the saddle."
So what can you do? At ages 47 and 50 you and your husband still
have plenty of good options. Since you like the business, you and
your husband together might develop a plan about its future ownership
and management. Ask your siblings to do the same. Then, with the
help of a facilitator, share your plans to see if you are in alignment
regarding your values and vision, as well as other issues, like
compensation, leadership and accountability.
If you are in alignment, then jointly present your business plan
to your parents. The plan might even include provisions for your
parents’ continued involvement. My father worked and made
a real contribution in our family business until he was 82!
If you are not in alignment with your siblings (and many siblings
aren’t, even if they love each other), then it’s time
for you and your husband to chart a new course for your business
life. You and your husband may want to buy the business from your
parents now, or arrange for a tax-efficient transfer at death, or
do something in between. Or take your business skills and knowledge
and start your own business (just as your parents did), buy another
business or go work for a company that values your contribution.
You say you admire your parents for their business success. Your
parents took risks—maybe major risks—to start their
business. These options may sound risky for you or your siblings.
But don’t underestimate the substantial risks you face on
your current path, which might well lead to business decline or
failure and family discord before or after the death of your parents.
Now is the time to act.
Expert Reply by Henry D. Landes, Founder & President,
Delaware Valley Family Business Center
Reprinted by permission of the publisher from Spring 2002 Family
Business, Philadelphia, www.familybusinessmagazine.com
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