Retiring From the Family Business

Marylène Gagnè, Department of Management, Concordia University, Carsten Wrosch, Department of Psychology, Concordia Universityand Stephanie Brun de Pontet, The Family Business Consulting Group, Inc., published “Retiring From the Family Business: The Role of Goal Adjustment Capacities” in the June 2011 issue of Family Business Review. Ms. Brun de Pontet kindly provided her thoughts on the article.

Who is the target audience for this article?

The primary traget audience for this article would be scholars interested in the field of family business research. However, as the field of family business is quite multi-disciplinary (both in practice and research) the range of interested scholars for such a piece could be broad – from individuals interested in applied psychology, social psychology, or industrial psychology, to scholars more oriented to management and business research.

In addition to scholars, it is our hope that with publication in the Family Business Review – which is widely read by serious thought-leaders and other practitioners in the field of family business, this article will reach individuals like myself, who work closely with families in business. The goal would be to inform practice from research.

What inspired you to be interested in this topic?

While the challenge of ‘letting go’ in family business is a topic that has been discussed and examined for many years, until we began this line of inquiry there has been very limited scholarly research into the role of measurable psychological constructs in explaining why some family business incumbents were able to let go while others really struggled with this process. When I learned about the research that Carsten Wrosch and some of his colleagues had doing on the constructs of ‘disengagement’ and ‘reengagement’ with a range of non-business populations, these seemed like very relevant prisms from which to examine the whole ‘letting go’ process in a family business.

Were there findings that were surprising to you?

A result that we did find surprising was the association between high goal disengagement capacities and a better expectation for retirement. While we expected the capacity to disengage would perhaps move an incumbent towards more concrete steps in planning retirement over time – the better expectations about retirement of those with more disengagement capacity may imply these individuals have more cognitive capacity to really think about the future – which could be important in this process. In fact, we found those with high goal disengagement capacities tended to have an improving view of retirement, even when they did not fully trust their successor. This suggests goal disengagement capacity may be an important variable in predicting retirement success among this group of individuals who tend to resist retirement.

It was also interesting to note that the planned retirement date of incumbent leaders was not related to their attitudes towards retirement, nor their concrete planning. This implies that just because a business leaders has a date in mind, does not mean they have a positive view of retirement (if they are dreading it – they are more likely to find a way to derail the process), nor that they have taken any concrete steps to plan. This may be important as one of the more stressful elements of the succession process in business owning families is lack of clarity between the generations around timing and planning, and this result suggests the link between intent, desire, and planning may not be clear and logical in the mind of incumbents, which may be part of what is contributing to the confusion.

How do you see this study influencing future research and/or practice?

This research reinforces the importance of looking at the succession process holistically – you cannot only consider the intent of the incumbent, or dates he or she provides around retirement, you must also bear in mind the extent to which they have confidence in their successor, consider if the incumbent is the business founder (which may imply more work needs to be done with this individual around improving their expectations and planning for retirement in a way that gives their future life meaning and purpose), etc.

In terms of research, this study provides a good demonstration that psychological variables about the incumbent or successor may yield important insight around processes that affect families in business and we certainly hope that additional quantitative research will be conducted at the intersection of psychology and family business.

How does this study fit into your body of work/line of research?

Again, in my specific case as a practitioner, this study provides empirical evidence for considering a range of points of views around the succession process and provides support for the idea that gaining a deep understanding of the individuals involved – their hopes and fears around this process – can help an advisor really add value in supporting the family and business through this complex process.

How did your paper change during the review process?

The paper changed significantly through the review process as reviewers provided very helpful feedback to really focus the manuscript and enhance the statistical analyses that were used to examine the data. We are grateful to all the reviewers for their thoughtful comments and helpful suggestions that have made this into a stronger manuscript.

What, if anything, would you do differently if you could go back and do this study again?

When conducting research in a population of business owners who are very busy and have perhaps limited interest in ‘advancing science’ – the challenge is always do ask enough questions to really get at a variety of issues and ensure you have as much data as possible, while not turning them off to the exercise as it feels too long an onerous. As a result, some of the measures we used were shorter than we might prefer – for example, the retirement date and ‘steps taken towards retirement’ were both single item measures.

Another enhancement to the study would be a longer-framed longitudinal follow up to see how the process evolves over a longer stretch of time, and the effects of the process on the various stakeholders (especially the incumbent and successor) as well as on the business itself.