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In times of transition, allow emotions to enter the room

Leadership

In times of transition, allow emotions to enter the room

Published 25 January 2023 in Leadership • 6 min read

Emotions are not often talked about in most organizations and yet they are a significant factor in every decision made. Neuroscience and behavioral economics have clearly demonstrated that we are emotional beings who happen to think, rather than thinking beings who happen to have emotions.  

Many emotions – such as a fear of heights, darkness, or even spiders – are instinctive reflexes from our evolutionary past. Others are rooted in our past experiences, and many become positive or negative triggers throughout our lives. The brain has one fundamental goal: to survive. This means one has to be always on the lookout for danger and threat, as chronic worriers are prone to be. Some decisions are made from this survival state where there is an overemphasis on negative risk assessment.

Research has shown that we have four main emotions that influence decisions: anger, fear, sadness, and joy. Emotions play a critical role in helping us to assess if something is important for our wellbeing – regardless of whether the perception of reality is accurate or distorted. And they take on an even greater significance in family enterprises where business decisions and transitions can become deeply intertwined with personal ties.

A major transition such as the sale of a family business or handing it over to the next generation can reopen old wounds and unresolved traumas. Some owners may feel afraid about the future and their lost identity, while others may be angry if the next generation wants to take the business in a different direction. Others are sad to let go and hold on for too long.

Heart and sole: still life with fish by Clara Peeters, 1611 (Prado, Madrid)In order to move forward constructively, it’s also important to ‘put the fish on the table’ – an expression that means raising a difficult issue openly and dealing with important differences

If handled poorly, a transition can have disastrous consequences for both the business and family unity. A case in point is the bitter feud that broke out between brothers Mukesh and Anil Ambani, heirs to the Reliance Industries empire, following the death of their father in 2002. After months of infighting over who should control the family enterprise, their mother brokered a demerger in 2005, which split the business in half. Mukesh gained control of oil and gas, petrochemicals, refining and manufacturing, while Anil took over electricity, telecoms, and financial services. Despite this, the brothers continued their public feud via the media and government officials, and Anil even dragged Mukesh into court. All these decisions were influenced by destructive and unresolved emotions rooted in childhood wounds.

So how can family enterprises ensure that a time of transition doesn’t derail the business and break family bonds?

1. Understand your own desires and the desires of others

Before embarking on a transition, such as the sale of a business or the establishment of a family office, it’s important to have a clear understanding of the desires of different family members. Do you want to hand the business over? If so, to whom? What amount of involvement would other family members like to have in the business in future? What are the desires of the next generation and how might they differ from those of the current generation? Parents shouldn’t assume that their offspring will want to run the firm in the same way as them. And what are the desires of all of the parties involved?

2. Foster dialogue and open channels of communication

Dialogue is crucial to sorting out how the transition is going to affect the identity of the owners and different family members. Create a safe space where family members can speak openly about their emotions. There may be sadness at loss of identity, fear of the unknown, and uncertainty. At the same time, there may be joy and excitement about new challenges, such as using the wealth extracted from the business to start new ventures or engage in philanthropy and impact investing. Identify what you are letting go of and saying goodbye to, then focus on the future and the new opportunities and benefits that this change can bring. Family members who refuse to face their emotions in a transition are at risk on many levels. Emotions must be part of the dialogue. 

3. ‘Put the fish on the table’

In order to move forward constructively, it’s also important to ‘put the fish on the table’ – an expression that means raising a difficult issue openly and dealing with important differences. If you don’t address these differences, they can start to smell and become toxic. The root of all conflict is difference – and different desires, whether unexpressed or expressed, are fueled by emotion. Once desires and emotions are openly expressed, listened to, and understood, then constructive concessions can be made. And that concession may become a fish under the table in the future.

4. Allow for younger generations to be emancipated from the family first

One source of conflict within family enterprises is when the younger generation reject the older generation’s wish that they take over the business and prefer to pursue their own vocation. This can create all kinds of emotions: disappointment, fear, frustration, and confusion. A good succession plan might involve the son or daughter stepping away from the business for long enough to allow an emancipation process to take place. This might involve going to study abroad or pursuing a career in another company, giving them the chance to establish their own identity. This way, they are less likely to feel they are in the shadow of the older generation and may be more willing to return to the family firm later. Families should aim for interdependence, not dependence.

5. Don’t forget that a family business is a family

As the name suggests, family businesses are ultimately families that come with their own set of special dynamics, from sibling rivalry to overcontrolling parents. A transition is likely to trigger old wounds around fairness, guilt, and a sense of belonging. If a brother or a sister feels they have been treated less favorably when growing up, or if there was an absent parent, this is likely to spill over into any negotiation for a stake or control of the business. It is vital to separate personal conflicts from business conflicts. When families can’t agree, they often turn to legal help, which can exacerbate the conflict. They would be better off seeking psychological help that addresses any past wounds and helps families to look beyond those wounds to focus on the present. If a family has a strong bond, it will be much easier to solve conflicts through dialogue and healthy negotiation techniques.

Close bonds can also be a major strength of any family enterprise. Blood runs deep, and this drives loyalty and trust. When Anil Ambani was threatened with a prison sentence due to an outstanding debt owed by his company to Swedish telecoms equipment group Ericsson, his older brother Mukesh stepped in to help him avoid jail — notwithstanding the brothers’ acrimonious relationship. 

Anil at the time thanked his “respected elder brother, Mukesh, and [his wife] Nita, for standing by me during these trying times, and demonstrating the importance of staying true to our strong family values by extending this timely support”.  

Often, we ignore the question, “How do you feel?” We prefer instead to ask, “What do you think?” But if you disconnect from your emotions, this will likely have negative ramifications on your life, such as depression, illness, and addiction. By taking the opportunity to name and label the primary emotion that you feel, you will be more likely able to move on from it, rather than allowing it to fester and sever relationships.

Authors

George Kohlrieser

George Kohlrieser

Distinguished Professor of Leadership and Organizational Behaviour at IMD

Professor of Leadership and Organizational Behavior at IMD and Director of the High Performance Leadership program. He serves as a consultant to several global companies including Accenture, Amer Sports, Borealis, Cisco, Coca-Cola, HP, Hitachi, IBM, IFC, Jaeger-LeCoultre, Morgan Stanley, Motorola, NASA, Navis, Nestlé, Nokia, Pictet, Rio Tinto, Roche, Santander, Swarovski, Sara Lee, Tetra Pak, Toyota, and UBS.

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