Understanding the Role of Fear in the Family Business
By Kyle Danner
This blog includes excerpts from my book "The Advisor's Guide to Successful Family Business Engagements." Purchase a full copy of the book for more tips on how to manage family business drama, keep clients happy, and earn positive referrals.
Fear is defined as an unpleasant emotion caused by the belief that something or someone might be dangerous, painful, or threatening. It’s something you may experience whenever there are problems in the family business, or when you know it’s time to make a change but don’t know how to.
Fear is something none of us enjoy, but avoiding fear can actually be detrimental to family businesses.
Because the belief that fear is “unpleasant” or “bad” blocks our ability to see the emotion as a valuable tool. Yes, that’s right. Fear can be a valuable tool. When you understand and manage fear appropriately, it can actually help family businesses move forward and grow.
It’s time to remove fear’s grip on your family business. Let’s break down what fear really means for the family business—and how you can use it to prepare the business for what’s next.
Fear and the Family Business
Families know one another, are comfortable around one another, and have no problem bringing what they know about one another into their businesses. This isn’t a bad thing. It can give family businesses an edge over the competition, because there are very few surprises when it comes to how employees may (or may not) react within a business environment or regarding business decisions.
Yet, because of this tendency to mesh family life and business decisions together, families also face some unique challenges when it comes to fear’s influence. Challenges like:
- How to approach the subject of succession/retirement/passing the torch
- When (and how) to have discussions surrounding wealth or financial distribution
Family business founders are not only struggling with business repercussions that can arise from these subjects, but they’re also forced to acknowledge their own aging, mortality, and legacy. These are big issues to grapple with. It’s no wonder fear can creep in.
The Dangers of Fear in the Family Business
The problem of fear in the business is that we tend to avoid fearful situations. So, making the decision on when to retire—or how to grow company wealth so that the next generation can pick up where you left off—might go unaddressed.
When that happens, fear can lead to:
- Resentment toward family members
- Guilt for personal mistakes
- Development of problems that eventually lead to a blowout
- Less productivity from everyone involved
- The business not being able to move forward
However, if you see fear as something that should be approached with caution, the roadblocks are removed, and your path forward will open up.
It’s okay to be fearful. Fear is a natural, normal emotional response. But you shouldn’t be ruled by it. Proceed with caution, and you’ll not only move your business forward, but you’ll be setting a strong, courageous example for the next generation of family members and cement your legacy across the board.
The Necessity of Fear & Pain in the Family Business
No one likes pain. But sometimes pain is necessary for growth. Not convinced? The perfect analogy to use here would be growing pains.
Remember those aching muscles and joints of our teenage years as our bodies strained to grow and reach their full potential? If you have forgotten, you wouldn’t be alone. Most people forget growing pains once they stop. What might have been agony just a year earlier is suddenly lost in the dustbin of our memory.
Fear-related pain works the same for family businesses. If you drag your feet on decisions due to fear of what you might see as an imminent (yet temporary) painful financial pinch, you could be causing bigger problems within your family businesses, stunting its ability to grow and evolve.
How Entrepreneurs Can Overcome Fear
Businesses that want to tackle fear head-on instead of hiding from it face another threat: added stress.
It’s hard enough running a successful business. But when stressors add up, success and growth can be stopped altogether. Anxiety over daily decisions, retirement options, or the future legacy of your life work can quickly become overwhelming.
Instead of letting fear run the game, take steps to control it. These are the three best ways to manage fear in your business.
- Practice courage – Courage is a skill, so cultivate it.
- Look at the evidence – Take stock of situations you successfully managed using courage in the past and the fears you conquered in the process.
- Start small and work your way up – Don’t try to address every issue at once. Acknowledging the evidence of past successful endeavors is a strong step in the direction of removing the fears that could be holding your family business back.
Don’t Let Fear Negatively Influence the Family Business
Family businesses already face enough challenges. Don’t let fear be one of them. Instead, learn how to use fear as a tool to reduce unnecessary risks and push your client's family business forward.
Advisors: Want to read more about the power of fear, our brain’s natural responses, and how it could be affecting your family business? Read my book, "The Advisor's Guide to Successful Family Business Engagements." This comprehensive book will provide you with all the tools you need to keep your clients on tract.