Founder Stress

Time stress deals with normal demands on the founder’s time. These urgent challenges of running the day-to-day operations out-rank the important and non-urgent tasks of longer-term planning such as business planning, strategic planning, succession planning and contingency planning.

Encounter stress includes role conflict, issue conflicts and action conflicts. For the controlling owners, role conflicts occur at many levels because of the potential for the founder to play a leadership role and make decision affecting each of the three circles: family, business and ownership.

Communication may be easily misinterpreted because the listener may be confused as to the source of the communication and whether the founder is speaking as a family member, manager or owner. Issue conflicts are very common because unresolved family issues can creep into other areas such as business conversations or instructions. Action conflicts abound because business actions can be misinterpreted to revenge a wrong that was perceived to occur to a family member in a non-business circle.

Situational stress refers to the work or family environment or the pace of change. The normal pace of business has increased dramatically due to globalization and technology such as the internet. SMEs are well positioned to respond to these challenges because of their smaller size and ability to respond quickly. However, stress can be prevalent due to the frequent lack of separate boundaries for family and work environments. Business discussions can dominate meal times and other family events.

Anticipatory stress involves fear and expectations. This is very prevalent for founders who have difficulty in choosing a family successor because it could mean selecting one family member over another. Planning for succession also means facing one’s mortality, planning for possible disability, facing retirement and loss of status, and concerns over financial security for the owner and their families.

It is clear that the stress on controlling owners who are considering succession planning is enormous. It is now understandable why most will defer formalizing their succession plans. It is also understandable why, given the significant stress and resulting reluctance to plan, most businesses do not transition to the next generation.