Recessions, like bullies, always pick on the weak, but few victims feel more beaten down these days than the millions of Americans with family businesses. Most run small operations with just a few employees, and failure often means closing an office with a parent’s name attached and deciding which relatives to fire.

The writer quotes a fourth-generation flagpole manufacturer:

“We’re losing a corporation that is 83 years old. We’re losing our house. We’re losing our credit. We’re losing, other than our own physical bodies, everything.”

I don’t have a single client family that has a expressed a danger of going out of business. Many of their employees have much to fear, but is there any actual data on job losses in privately owned vs. public corporations?

I have a client whose sales are down 90% over the past 12 months–in new home construction. Their wealth is impacted, too, no doubt–but they won’t be going out of business. What does hurt is that much of the work they’ve done over the past five years in building strong executive teams and sales teams is unwinding, as there isn’t enough business to support the structure they put in place.

More positive things are happening for one of my clients whose business is tied to Wal-Mart’s success, and two others that have used the recession to justify cutting some low-performing employees.

For others, business is tough. But reeling? I don’t see it in the midsized family-owned businesses.

But she is not, it seems, versed in the ethics and standards of journalism.

The paper that broke the Watergate scandal and boasts more than 40 Pulitzer prizes found itself with ink on its face this week, over a “pay to play” invitation for lobbyists to get special contacts with Post reporters and editors. Weymouth’s grandmother and namesake, Katharine Graham, was famous for inviting Washington powerhouses to private dinner parties–but she didn’t charge them $25,000 a plate.

I’m not citing this as a family business conflict, only as it raises an interesting point about successor preparation: sometimes a prestigious graduate degree and all the talent in the world can’t substitute for knowing the essence of the trade one’s family firm is in.

There’s a neat dynamic map of Graham family companies, relationships, and connections “>here.

On the other hand, I think it’s downright dumb the way some parents let their kids move home, do little or nothing to pull their own weight, pay no rent, and still live high off the hog. There are adults living in their parents’ home who think it’s perfectly fine to eat out four nights out of seven, who don’t lift a finger to do anything to help out around the house, and who won’t cough up a penny to help with the costs of living. There are adults living in their parents’ home who get pregnant when they don’t have the money to put a roof over their own heads. There are adults living in their parents’ home who have no plan for how to get the hell out.

On the more constructive side, Gail advises exactly what I call The Deal:

Make sure you have an end game in mind.  How long will they live with you? What’s their move-out date? Failing that, when will you sit down again to assess how they’re doing and set the move-out date? Establish a time line up front so your adult children don’t get the idea this is a permanent arrangement. Your kids shouldn’t have to worry about being kicked out on a whim. Nor should they get so comfortable that life at “home” becomes the status quo.

Talk about the money.  If your kids are trying to save the downpayment on a home, have them pay you “rent” that not only covers the increased costs of having them under your roof, but sets aside the amount for the downpayment every month. Ditto kids who are paying off debt; make sure the money is going where it’s supposed to go. Unless your child has absolutely no income, they must accept responsibility for some of the household expenses.  And for those who have very limited incomes or who are busting their butts to get debt paid off, exchange what you have to offer for their skills as garbage collectors, cooks, cleaners, laundresses, snow-shovellers, drivers, and whatever else they can do to make your life easier.

One way or another, your adult children need to pay their way to keep their self-respect and not turn back into your “babies.”

Couldn’t agree more, Gail. But I keep remembering the line from Robert Frost that Nick and I used for the title of Chapter V of Trust Me: “Home is the place where, when you have to go there, they have to take you in.”

Does high and mighty rhetoric about the virtuousness of our work and our clients make other FFI members as uncomfortable as it does me? Do others feel as I do, that it’s pretentious and sycophantic to portray entrepreneurs as the backbones our society, by virtue of nothing more than their business success?

I hasten to say that helping entrepreneurs does serve society in certain ways. Maintaining incentives to capital and to labor is valuable to the economy. And helping to maintain trade and employment in communities is praiseworthy, in those few cases where the alternative to succession is really closing up shop. Releasing people from pain and frustration, opening systems to better teamwork, and facilitating innovation in the face of chagne are all missions to be proud of.

My problem is that the rhetoric seems to ignore some of those clients’ antisocial activities. The zealous consultant sometimes echoes principles that are based less on what benefits society than on what benefits the rich or, to quote an early 20th century steel magnate, “the worthy men to whom God in his wisdom had entrusted the industrial life of the country.”

When we speak and vote in the interests of the well-to-do, let us remember that we do so only because we are (relatively) well-to-do — not because we have a corner on virtue.

Is it for the sake of philanthropy that we fight to preserve private wealth? I don’t think so. Not all my clients believe in philanthropy. Furthermore, philanthropy isn’t inherently virtuous; it involves choices, like any other investment, based on principles that are always subjective and often self-serving. How can I say that my three ducat gift to the Art Institute benefits society more than my recirculating two ducats throuh my local economy and paying the other ducat in taxes to support state services and reduce the federal deficit?

Sycophancy is worse than self-righteousness. It can bind us to dysfunction in clients’ systems, when we ought to be helping them see:

• discrimination in employment and promotion. Those few family firms that are leaders in creating workplace cultures of fairness and diversity receive disproportionate media attention. Many others are decades behind corporate America; some are institutional perpetuators of prejudice and intolerance;
• tax avoidance games based not just on loopholes but on lying. When lying is part of my clients’ culture (family and business), it adversely affects everything I try to help them do;
• cheating, not just the IRS, but also the company’s employees and minor shareholders;
• silencing dissent or diversity among family members.

The point is not that entrepreneurs as a class are any more corrupt, self-righteous, or pigheaded than the rest of us. My point is that they are no less so. As individuals, they range from scrupulous to unscrupulous, from socially conscientious to sociopathic. Should we ignore those dimensions?

I wonder if my own profession (psychology) might take a useful role model from those lawyers and accountants who neither judge nor interfere with their clients’ sins–but who don’t turn a blind eye to them, either. They at least counsel clients on the risks inherent in any lawbreaking they become aware of. It is certainly not a psychologist’s job to sit in moral judgment. But is it not the responsibility of family therapists and organizational consultants to force discussion of the emotional, relational, developmental risks and costs of some of our clients’ practices? If so, then perhaps we need to stop buttering them up.

Can you conceive any way they could have been other than knowingly complicit?

But beyond that: if you’re an advisor, what proportion of your family firm clients have been serious crooks? I’m not talking about cheating Uncle Sam (i.e., their fellow taxpayers) as much as they can get away with, but actually stealing other people’s money: investors, customers, suppliers, …? I’ve had very few among my clients, as far as I know.

The Times points out that unlike some family court battles, this one hasn’t drained the family’s wealth, because the paintings’ value has soared while control is in dispute. But it surely has drained away brotherly relations. Think of those iconic images of family bonding depicted in such famous Post covers as ‘Saying Grace’ and ‘Walking to Church,’ to name two in their collection. Wonder if the Stuart family ever asks, ‘What would Norman Rockwell do?’