Great Expectations

Why The Setup?

Why do business owners make such seemingly irrational decisions when it comes to hiring and supervising their kids? Ivan Lansberg, a New Haven, Connecticut organizational psychologist specializing in family companies, explains that parents who are very attached to their businesses often feel a combination of pride and resentment toward possible heirs. "In more functional families, the pride side is dominant. In less functional families, resentment dominates," he says. If a parent's ego can't tolerate the idea that a child might do something better than the parent, problems arise.

Parental resentment "usually gets played out under the table," Lansberg says. Kids get set up for failure in subtle ways, such as not being properly prepared for an assigned task or not having a well-defined job, which makes it hard to figure out what the scope of their responsibilities is or how to measure results.

"Often, kids participate in the setup for failure as well," Lansberg says. "They may be ambitious and overstretch. They may try to reap the rewards of their position before they are ready to do so. Or they may be afraid of real challenges and shy away from them."

But most often, children of founders want to succeed in the family business, says Wendy Handler, assistant professor of management at Babson College in Wellesley, Massachusetts. They come in eagerly, wanting to prove themselves as independent adults and gain credibility among other employees, as well as with their parents.

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This article was originally published in the January 1996 print edition of Entrepreneur with the headline: Great Expectations.

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