• Prof. Dr. Tom Rüsen, Monika Nadler, Wittener Institut für Familienunternehmen (WIFU)

Taboos in entrepreneurial families.

(Reading time: 3 - 6 minutes)

2102 Witten Tabu

From the researcher's workshop. On the surface, keeping taboos seems to protect family cohesion. But what is not talked about continues to have an effect in the background. That is why it is important to recognize taboos, to understand them and to bring them to light.

A taboo is something that must not be spoken about or done. So there are "speech taboos" and "action taboos". Both types can be found in business families. Not speaking or not doing is supposed to ensure the cohesion of the (family) community. In fact, however, it is counterproductive. This can be illustrated by some of the big, impactful taboo topics.

The question of the actual suitability of a chosen successor, for example, is a point about which people like to keep quiet. In the case of successors, this is often about their own insecurity - am I up to the task? Doubts and self-doubt remain unspoken. In the senior generation there is another taboo - the fear of letting go. This is the (unacknowledged) fear of losing status and personal significance.

If the family does not succeed in addressing this, they end up not letting go and choosing the wrong successor - the process fails.

The broad field of family conflicts is also a taboo subject. The willingness to systematically address (or anticipate) conflict in the family is so important because a conflict event sets in motion and drives a destructive interaction between family and business. Above all, it is important to understand that conflict is the rule, not the exception. And that their escalation follows known patterns and sequences that can be controlled. This insight makes it possible to approach the subject with far greater openness; the taboo loses its power.

A major challenge for securing the future of family businesses - especially for those in post-patriarchal management situations and in businesses with growing shareholder groups - lies in the taboo field of professionalised self-organisation.

Here, the problem usually lies in the management and decision-making structures. Often these are taken over unreflectively from the previous generation. Out of misunderstood respect or because it is convenient, their revision and adaptation is neglected. However, when critical situations arise - changes in the value chain due to digitalization dynamics or sustainability expectations among stakeholders - the established decision-making systems prove to be insufficient or even obstructive.

Although science has been addressing this for a long time, the willingness to professionalize by means of systematic competence development measures is limited and often falls short of the declared intentions. If a deficit of professionalism is recognized, this finally touches the issue of insufficient competence. Conflicts arising from this - which would often have to be dealt with by the next generation - are shied away from for fear of losing face.

Equally powerful is the taboo of wealth. In the past, there was usually a clear concept in the entrepreneurial family: the assets tied up in the family business belong to the company and should be at its disposal. This "fiduciary attitude" is increasingly being questioned by future generations. In addition, in some cases enormous secondary assets have been created in the meantime. Very few families deal with this issue.Yet there are a number of things that need to be clarified: Who exactly owns these assets, the foundation of which was created by the ancestors? How should the individual asset owner deal with the secondary assets?

Many families are on shaky ground here. Expectations either remain vague ("be modest", "stay down to earth") or money is not discussed at all. As a result, incoming or adolescent family members are uncertain. They will try to make do with presumed expectations and attitudes about the proper way to handle wealth. This opens the door for harebrained individuals.

This taboo also operates where individuals feel guilt and shame because of wealth that has come to them through no fault of their own. Such feelings are usually difficult or impossible to explain within the entrepreneurial family.

Of course, a taboo in society as a whole also affects entrepreneurial families - that of mental illness. Whether growing up in and belonging to an entrepreneurial family with all its expectations and demands favours mental illness has not yet been scientifically clarified.

The fact is, however, that psychopathological abnormalities (addictive behaviour, affective disorders, trauma sequelae) are also frequently concealed in the everyday lives of entrepreneurial families. In most cases, the affected nuclear family is left alone with the problem; the necessary structured confrontation in the area of tension between company and family takes place reactively at best and, in addition, is often accompanied by feelings of guilt and shame. Against the background of the often great personal and family hardship, the psychological risks of belonging to this specific type of family should therefore be specifically examined and dealt with.

These examples underscore the risks that taboos pose for family businesses.But families are not at their mercy. Dealing constructively with old taboo areas and recognising and understanding new ones brings lasting benefits for securing the future. From the perspective of research and consulting, it is worthwhile to address the following questions:

// How is the decision-making power of individuals over the family community accepted and legitimized?

// What happens to the entrepreneurial family after the loss of the business through sale or insolvency?

// How can equality be established in marital and cohabiting relationships despite differences in wealth?

// How can a family expectation of equality be met in the face of structural inequality in the share structure? Above all: How are differences between nuclear families treated?

// Where do the red lines of community maintenance run? Which predetermined breaking points would make it impossible to stay together as a community of owners and families?

// How can transparency be established about competencies and skills of individual family members in relation to targeted functions?How can family members be assessed?

// How do the family and the person concerned deal with a situation of excessive demands ("burn-out")?

// How can the death of members of the entrepreneurial family be discussed and prepared for?

Of course, this list could be continued. But it should serve here above all to sharpen the view. Taboos feed on looking away and remaining silent. Only identified taboos can be dealt with effectively. This is where every entrepreneurial family can start.


Authors: Prof. Dr. Tom Rüsen, Monika Nadler, Witten Institute for Family Business (WIFU)

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