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The Attitude of Entitlement
by Rick Johnson
May 17, 2006



It is difficult for most kids who are members of “The Lucky Sperm” club not to have some feelings of entitlement. After all, the main reason most entrepreneurs’ start their own business is to provide for their families. Once that is secure, thoughts of creating a legacy and passing the business from generation to generation become a natural progression for most founders, even though statistics show that business failure is alarming in second and third generation leadership. In fact, The Family Business Institute reports that only 12% of family businesses survive the third generation.


Feelings of entitlement are not necessarily a bad thing. It’s the attitude of the owner’s child that really matters. There are many owners with kids in the business and the transition of power to one of the kids goes smoothly and the new leader is effective. There may have been feelings of entitlement but if so they were not displayed in public. The family successor had gained the trust, the confidence, the respect and the support of the management team and the employees. You just can’t do that if you wear your family name as a badge of entitlement, a badge of power and a badge of control.


An attitude of entitlement that is displayed openly can create major challenges for even the most successful family business. This attitude is often displayed by the family member’s work ethic expecting every employee to “live to work” and give of themselves unconditionally while Junior takes off every Friday afternoon or goes on extended vacations. They often manage with an autocratic style with little empathy for employees.


They may leave the impression that they can do whatever they want because they will run the company some day. They are an owner. This is nothing more than an assumption of privilege that “Dad” or “Mom” (The President ) has an obligation to nip in the bud.


Succession by a family member should not be a gift. It should be earned; Earned through hard work, dedication, leadership, honesty, integrity, competence and trust. As an owner it is necessary to instill a strong work ethic and the development of leadership skills in the children. The responsibility is two fold. It is one of “Preparation” and  “Protection”; Preparation for succession and Protection against the possibility that the child could destroy the business.


If you are large enough (profitable enough), develop a formal internship for your children early. Establish precise criteria and qualifications required to take over as president. (e-mail rick@ceostrategist.com for a sample list of family member succession criteria) Establish a learning environment outside the business. This can include university programs, seminars and personal executive coaching.






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If you have multiple family members in the business and feelings of entitlement are spread around, create a family doctrine that outlines principles, tradition and culture. Create a code of conduct if necessary. Consider giving one or more of the family members that are disgruntled and may cause long term damage to the business an advance on their inheritance to leave the business. Another option is to bring in an outsider to run the business. This is quite a challenge if disgruntled family members

stay active in the business.


If all else fails ----- Don’t sacrifice family relationships for the business. Business is business and Family is Family. What’s more important?


I repeat --- If all else fails --- Don’t sacrifice your relationship with your kids. They are not replaceable.  Sell the business ---- it’s only money.




The Attitude of Entitlement