S1: Let’s say let’s say you go and you have this conversation and your daughter says you’re my dad. Like I deserve part of this ownership.
S2: She does not do things like I want her to do them. You know I still think I’m the boss. I’m the owner and I would not be surprised if we did sell it that within a year the other three fired or how do you feel about that.
S3: She’s been warned. Welcome to how to I’m Charles to.
S4: Each week we talk to listeners like you who are trying to figure out how to solve a problem like how to break your phone addiction or how to uproot your life. This week we have a listener who’s trying to start a new chapter in his life but he doesn’t quite know how.
S5: Meet Kyle from Texas. I’ve been in the insurance business since. Not teen 80. It was a family business that my dad started in 1973. How many employees do you have. I have four employees all female and have you enjoyed being in the insurance business. Well now I really have never met anyone that I’m going to be an insurance agent and then also I’ve never met anyone that retired from the insurance business that says Damn I really miss that.
S6: And you’re you’re 64 now is that right.
S7: Well actually I turned 65 two weeks ago.
S6: Oh congratulations.
S1: I guess Kyle wants to retire but but he doesn’t want to shut down his company. He says he wants to sell it to his employees and then live off of the proceeds of the sale for the next decade.
S2: You know I would like to keep the actual business going and give these girls ladies something that they could have for the rest of their lives.
S6: So why not just sort of turn to them and say hey you know you for. I’m going to sell you my business. You want to buy it.
S2: Well that’s a little more complicated than that.
S4: That is actually more true than any of us realize because we thought we were going to help Kyle figure out how to sell his family business. But as it turns out he has a much bigger problem because one of his most troublesome employees also happens to be his daughter.
S8: More after this quick break.
S1: We’re back with Kyle who’s trying to figure out how to retire from his family insurance business.
S2: That’s right. I’m very active. You know I ride a bicycle. My wife and I opened plodding studio last year and we’ve both become instructors. We have like 55 classes or we kill my God. So it’s been very gratifying to do that.
S6: You sound in much better shape than friendly. Well let me let me tell you what we did to try and help you out. So we reached out to this Harvard Business School professor named Christina wing who’s actually in the studio with me. Hi Christina. You grew up in Texas. Is that right. I did. I grew up in Houston. How did you get interested in this. Like why did you start focusing on family business.
S9: My father was a serial entrepreneur. And so I was always interested in my own reasons for wanting to or not work with him. And my view on families in business is it’s an amazing way to create legacy.
S6: Yeah. And also I actually started a company with my father before I became a journalist in Albuquerque. And it was it was terrible. It was it was it was a terrible thing for our relationship. I mean the business actually did well and we ended up selling it and it was very successful.
S1: But it was it was not a good thing for my relationship with my dad.
S2: I run into people all the time that cannot believe that I worked with my father for 20 years. And certainly we had some very rough times. But 99 percent of the time we got along very well.
S1: And let me ask Kyle do you give a number in your mind about how much you think you’d want to sell this thing for to your employees.
S2: I’m thinking eight hundred thousand dollars.
S9: Okay let’s let’s talk about this for a second though one of the important things about families in business is when you step out who does what you have been doing and so of the employees you’re leaving there is anyone capable to do the accounting and the other things where they get the need to add to their costs by bringing somebody in to do those jobs.
S3: Now the Brooke who is my senior employee she could do it. Have you ever approached this with them at all. Have you had any talks with any of them. Only Brooke. And what did Brooke say. Now she’s all for it. She’s hanging her hand on this.
S7: You know she when I hired her she was a waitress and she took to this like a duck to water.
S10: She really sees the value of what we’re doing here and so the thing is Kyle told me he feels really comfortable selling the company to Brooke and to his two other employees. They do a great job running the company and they could pay him off over time which would provide for his retirement. But then there’s the fourth employee his daughter Natalie my daughter doesn’t have the skill set.
S11: I can’t sell it to her. And I would love to but. She is not detail oriented. She is a sales person. And as we know sales people are kind of like artists and details are for other people.
S1: And she she’s one of the four people that are working at the firm is that right. That’s correct. Well let’s say let’s say you go and you have this conversation with the four employees let’s say Brooke says look I’m on board I’m ready to do it and let’s say the fourth one your daughter says Well look I don’t necessarily want to be an be a manager but you’re my dad. I deserve part of this ownership because you should pass it to me. What do you think about that. Well we have had a very.
S2: Rough relationship in this area. She she does not do things like I want her to do them. I keep telling her this is coming. You know that I’m going to retire and don’t think that she is grasping that it is really coming.
S12: So let’s just talk about this for a moment sometimes. And you did not experience this with your father because you had a great working relationship. Sometimes some of the stresses at home become the stresses in the workplace for parent child. Do the the the tendencies you’re talking about that bother you in the in the workplace. Were those the same tendencies at home.
S2: Yes she was pretty rebellious and did not do the things around the house that her mother and I wanted her to do.
S13: I mean she couldn’t be to work on time of her life depended on it. And she lives within 100 feet of my office.
S14: So so digging a hole here are you. Well no but this is this is very common. And I think I’m not going to take sides I have we don’t we’re not giving your daughter an opportunity here but sometimes parents see their child in the business the same way they saw them as a child at home.
S12: And so they they enter kind of pre pissed is what we call it. And that’s hard. And sometimes people flourish when a parent leaves the business because they feel empowered and sometimes the parent has protected them and they get fired from the business. So like you said it could go either way but you do want to make sure you see both sides of what could be going on. But yes it’s it’s challenging.
S1: Is that possible. Kyle that that you’re bringing something to the workplace that’s holding your daughter back or down in a way that if you leave she might flourish.
S2: But it’s possible it’s possible. It’s a very detailed business and somebody has got to run the business.
S12: But you know what. Think about this you said your daughter’s excellent at selling insurance. You need to both sell the insurance and then properly put it on the books and do everything else. It sounds like there’s a role for her it’s just more external. Are you just frustrated because she doesn’t have your skill set.
S2: You could say that you know I’m a pleaser and I do what it takes for people to get along with people and for them to like me and non confrontational. And so if somebody wants me to put my pen next to my phone every night before I leave the office I’ll just do it. I just don’t think about it. I just do it. And here in lies the rub.
S9: Yes that’s you know what you you might be underselling and undervaluing what your daughter is really good at. And if you step back it’s really hard to sell things. So if she’s good at part of the business that’s really hard then that should be rewarded. And maybe she’s purposely not putting her pen next to the pad of paper the way you want it because you’ve been annoying her about that for so many years. So I wouldn’t I wouldn’t give up on having the name of your business continue on with another family member. We just might need to get a little looser about where the pen goes.
S6: Let me ask you Christina because you OK you kind of have some experience with this. You were in business with your dad right.
S9: Well I actually didn’t go into business with my father. My brother was in the business with my father. And I didn’t go into it because we’re too alike. We are both very stubborn. We both would want that pen in a certain way and it wouldn’t work. But you have to know those things. What I think is interesting is is what I tell my well that are considering families and business. Think of that when you’ve possibly planned a vacation with family members and how that goes. And if you can’t plan a vacation with family members you should not go into business with family members.
S1: Let me ask you how. Let’s say let’s say your daughter wasn’t working with the business. Do you think that this question would be any different if your daughter wasn’t one of the people involved.
S2: I think it would be a lot easier. I think it’d be a lot easier for me and I would think it would be a lot easier on Brooke because she is we although we have not talked about my daughter. It’s the elephant in the room because they work together closely and it’s a struggle for Brooke.
S3: Now Brooke is like you right.
S7: Yes. It drives my daughter crazy.
S12: So think about this now. Two against one two against one and also probably you show favoritism towards Brooke because she does things in a way that you approve of and that is hard when you’re a daughter because you want your father to approve of you.
S2: Well I’ll tell you this if she wasn’t my daughter I would have fired or a long time ago.
S15: Now you do know that hall.
S13: Yeah. She knows it and everybody else knows it too. She’s a good insurance salesman. She’s great with people but she’s just not a very good employee. No this is one of the reasons that I’m just so I’m so tired of dealing with this over the last especially the last five years that I really want to remove myself from it because it is just so difficult.
S9: So Kyle would you want to continue working through daughter wasn’t there.
S3: It would be much easier.
S14: OK. So this is an entirely different conversation. Telling the business we need to wait. Okay now family therapist that’s me. Welcome. Hi. Nice to meet you. So this is a totally different conversation in some ways.
S9: It’s it’s kind of more of a conversation around how do you fire your child from a business.
S16: And this for Kyle is the real problem. When we come back Christina will try and help Kyle preserve his company’s legacy and sort things out with his daughter but he might not be able to do both. We’re back.
S10: And the turmoil between Kyle and his daughter. It reminds me of another father daughter drama that’s been playing out in one of my favorite TV shows. I’ll take my money.
S17: Five years time I’d like to be free of this company on the.
S11: This company means a lot to me.
S17: Yeah sure. That so fine keep it. It’s a toy shop. Keep running it for sentimental reasons until you’re not out.
S1: Now obviously there’s a lot of differences between the Roy’s quest for global domination and HBO succession and Kyle’s situation in Texas for most of which is the size of their companies. But Harvard Business School professor Christina wing she says that all family businesses share these common problems.
S18: It doesn’t matter if your business is worth 800000 or 25 billion. I have a family right now I’m advising for that’s worth north of that and same issues family issues.
S1: And why are these really business questions or are they family emotional question. Well
S12: so they inability to deal with the family question becomes a business question becomes a business problem and then it affects. I mean if you think about the stakeholders we’re talking about shareholders is what we’re talking about. We’re talking to employees customers in society you know 80 percent of the businesses outside the United States are family out there conglomerates. And so it affects everybody if these businesses don’t get done right. All right. So Kyle I’m gonna ask you one question. What’s your number one goal to have happen between you and your daughter.
S7: The number one goal is I wish we would have a better relationship a good relationship a father daughter relationship a family relationship just so that we could just talk whether it’s about the business or whether it’s about our dogs that we could just talk about it and it wouldn’t be strained. Maybe if she did go to work for somebody else then she would understand that all this stuff Dad was saying it’s real. I have a friend that’s been in the restaurant business for about 40 years and he’s got a son in the business with him. And when the son wanted to come and do business with him he made him go leave town and work for another restaurant for I don’t know two or three years and then come back and they have a great relationship and I look back on that thinking boy maybe I should have done that.
S12: Now I gotta tell you my most successful families that I advise have a policy that no child can enter the business since they’ve worked somewhere else for two years.
S14: And so you just answered your own question because it does make my day and I could have used earlier.
S12: Well it just teaches them that you know when you need that extra day at Thanksgiving you actually have to ask somebody off instead of saying hey dad I’m not coming in on Wednesday. It just puts everything in perspective. And so it’s not too late if you want to stay in the business if your goals are to have a relationship with your daughter and still work then maybe you sit down with her and say I don’t want to sell the business to anyone but you but I can’t sell to you now. Can you go work somewhere else for a couple years and see and I’m going to keep this business going and that way we can find a relationship outside the business and then maybe you come back to the business and it’s yours.
S18: That might be the better solution for you.
S3: Okay. That’s a thought. How old is she your daughter. She’s 34 and shift kids. Is she married. No she’s not married does not have any kids.
S19: Kristina let me ask you this. How does he have that conversation with his daughter to figure out whether she’s going to step up or whether he actually ought to sell this company to Brooke and not to his daughter.
S12: Well I I think if if his goal is number one goals have a relationship with his daughter over any business outcome if that’s the next conversation then he’s going to lose both. He’s going to lose his company and he’s going to lose his daughter. I believe that showing her a path where she gets to decide the outcome or have a hand in it is a better way to go. And so I would be really upset if I were your daughter and found out you were having all these conversations with Brooke about possibly selling the company and about me and where’s my role. And so if you could sit down with her and say I know this is going to be hostile I I hate that I feel that way but I’m 65. I’m so stressed by working together that I’m considering selling the business. So I see two options. One option is I sell the business to the group in which case they might not keep you. The second option is maybe you leave. I stay. I continue to increase the value and we work on our relationship. And then if you and I get on a better foot you come back and you you take over part of the business. I have this strange feeling in the back of my head that you want her to suddenly become you and you want her to have the business if she could and you just don’t see how she can do that. You’re never gonna see it while she’s still there because she’s never going to learn these skills from you. She hasn’t in the last eight years. So in ten years she’s been there 10 years. Right. Right. So if she wants to run the business she needs to go out she might say to you Hey Dad I don’t ever want to run the business. And she might surprise you and say OK. Well I was staying here because I thought that was a way for us to work on our relationship. You saw it Brooke I’m leaving. You don’t know but you can’t just project what she’s going to do.
S2: OK that sounds very reasonable.
S1: How do you think that conversation. How does it go well and how does it go poorly.
S2: It doesn’t go well at all and it’ll be scary for and she will not want to hear it.
S19: And let’s say that you’re in a place where you have to choose where where you have that conversation. It doesn’t go well. She says I don’t want to hear this and you have to choose between selling this company to Brooke which makes it economically safe and sound and we’ll take care of you for the next 10 years you’ll get one hundred twenty five thousand dollars a year. You know that Brooke is gonna do a good job running this but Brooke is saying look I only want to do this if I’m gonna be in charge and I want the ability to hire and fire. I want to be able to change the name of it if I want to. I want to be the owner and that’s option one. And that’s going to damage potentially your relationship with your daughter. And option two is that the business is less stable and that you have to stick with it a little bit longer but you’re gonna have more time to work on the relationship with your daughter you’re not going to potentially alienate her. How do you choose between them. Which one do you think is more important to you.
S2: Well the the financial stability is more important to me. That may be callous but I have. Told my daughter for years that now this is my goal. This is what I want to do. You know my dad died in 1999. He was 68 years old and he worked a full day the lot when he died. And I don’t want to do that. And that has been a goal of mine. I want to retire. I want to travel. And the fact that you have not been able to hone in on this I can’t help that and I’m going to do this and if it’s just selling it to Brooke then that’s the way it’s going to be. And let me at let me interrupt you for a minute. I’m being selfish and I just want to be selfish and I know that.
S9: Oh that’s great. If you want to be selfish but I think you’ve been selfish not dealing with Natalie sooner because you’ve been non confrontational and so 10 years is too long for this and a little tough love earlier would have been better because otherwise when you enable people for that long they don’t learn how to change and families and business enable weak links for a long time because they don’t want to lose a family member any other employee would have been gone ten times over. So you bear some of the burden of how you handle it now because you let it go on for ten years like this year. You’re going to have to have a conversation that’s hard but the outcome might be the same.
S2: Well my my father was very good to me and did a lot of things for me and ours.
S7: So appreciative and I was always just wanting to do better too. You know I’m a writer and a yuppie I wanted to do more have more better house better cars all that. And so that’s what I did for Natalie and how it hasn’t worked. And I just keep doing the same thing over and over thinking Well this you know this motivated me but it does not motivate her.
S1: Christine let me ask. You’ve probably seen a lot of these conversations happen with families you’ve worked with and students you’ve helped. I imagine some tough love helps. It makes things better. And some tough love is just tough. How does how does that play out.
S9: You know it it’s very hard. And we encourage people to role play which is might sound funny to you. Kyle would like to really role play even with your wife about what the conversation might be like. The hard thing is when you’re family you think you know what the other person’s going to say before they say it. And so the defensiveness just creeps in. I don’t think there’s any scenario where the two of you can sit down and have the same conversation you’ve had for 10 years and expect a different result.
S3: What do you think about how. I agree.
S2: I mean we we’re not going to be able to have really a civil conversation about this.
S7: I’ve given her articles to read you know read this book. Look at this podcast. Check out this YouTube video.
S18: I think what you just said was you gave her all these things. Have you ever asked her to give you something. No. So say Natalie what what can I do to make this work better. What are you seeing that I’m not seeing. I’ve sent you articles books send me some things because you what you’re missing is you’re missing whatever point of view she has. She’s she has some point of view she’s not clearly able to express to you and I would turn it around I would turn it around and ask her for what do you need to be successful. What’s going to make you happy. Help me here. Help me help you so to speak. So instead of it always being about her role in the business how about her role in life like the same kind of coaching you would do as a father if she wasn’t working for you and then you’ve built a bridge I can guarantee you. God forbid something happened to you like you just said it happened to your father three years from where you are now. She’s not going to live with the fact that she wasted all this time. And so I think if you if you can break it into different buckets. Family is one bucket business is another bucket. But then her personal career is a third bucket. You’re going to be better off right now every time you sit down you’re talking about all three at once. Yes. So separate the issues OK. She is a single woman. She needs to earn her own career. And right now it sounds like she has a job not a where.
S3: Absolutely. Do you think you could do that now.
S2: Yes I can give it my best effort and try to make this work.
S12: So Kyle let me give you a pep talk. Get the goal in mind. OK. So yeah I got to go into it with a goal. If the goal is I’m going into this conversation for what’s best for Natalie not what’s best for Kyle not what’s best for the insurance business. Let’s have a goal for the conversation that’s different. And then you know go home get annoyed be pissed and then have the what’s best for the business conversation and what’s best for Kyle. You know but not when you have it with Natalie because you’re you’re too confused.
S6: Otherwise before we wrap things up let me ask Christine is there any other advice that you think Kyle should be thinking about.
S18: Well Kyle I think you need to think about yourself a little bit here.
S9: You know you’re not your father. You do polarities a gazillion times a week if you’re healthy but you like going to this office you like bantering with these women. I think it’s part of your life and your routine and you’re going to miss it more than you think you’re going to miss that relevancy you’re going to miss that leadership role that you have. So if you’re doing this the way we’re suggesting which is spend time with Natalee and then nail broke down and get a multi-year structure that’s the most tax efficient. Make sure you don’t mess it up by needing that validation and keep laughing.
S20: It’s good for you. I think it’s gonna work out. I got to say like it it sounds to me like you’re in a better place than when we were at the start of this call.
S7: Oh absolutely lovely talking to you. Thank you so much. I really enjoyed our conversation.
S21: Thank you to Kyle for sharing his story with us and a Harvard Business School professor Christina away.
S20: Do you have a problem that needs solving. Send us a note at how to at Slate dot com and we might be able to help. That’s how to at Slate dot com. Also we want to hear from those of you who have found the advice on our podcast helpful. You can tweet us at hashtag how to pod or if you call and you leave us a voicemail we might play it on the air.
S21: The number is 6 4 6 4 9 5 4 0 0 1. How tos executive producer is Derrick Jon Rachel Allen is our production assistant and Merritt Jacob is our engineer. Our theme music is by Hannah’s Brown. June Thomas is the senior managing producer of Slate podcast and Gabriel Roth is Slate’s editorial director for audio. Special thanks to Asha solution. I’m Charles Dudek. Thanks for listening.