Scott Friedman is a business lawyer, author and co-founder of Varia Ventures LLC.
Family business owners and their advisors spend a lot of time and money seeking to optimize business performance and family relationships. Many useful tools have been developed over the years, including generally accepted “best practices,” such as employment, compensation and succession plans. These and other such plans can work. Many parents are blessed with children who have become happy and productive adults while also helping to increase the value of a family’s business, wealth and harmony. Unfortunately, that’s not the case for everyone. Many parents find themselves struggling with their adult children who remain financially and emotionally dependent on them. Adult children who struggle to find (or hold) a job. Adult children who are unmotivated, ungrateful and unhappy. In other words, adult children who have “failed to launch.”
These struggles are real — and they are difficult. Parents are hardwired to protect their children and sometimes that includes providing jobs, money and other benefits. Balancing that parental instinct to provide “support” with the need to not overindulge children can be challenging, leading parents to make inconsistent decisions — sometimes thinking as a “parent,” other times like an “owner.” Such inconsistency can lead to misunderstandings, disappointments and other negative emotions. That is why the term “tough love” is often appropriate.
Unfortunately, parents who are unable to accept those negative emotions can unwittingly raise children who grow up to live unfulfilled lives and who may struggle to support themselves when their parents have passed away and they are on their own. This article seeks to provide frustrated parents working in a family business with a starting point to help them understand the “failure to launch syndrome.”
What is ‘failure to launch?’
Failure to launch refers to an individual who is unable to successfully handle typical adult responsibilities, including, for example, finding (and holding) a job, moving out of the family home or becoming financially independent from their parents. A failure to launch can also be reflected in adult children with poor work ethic, an inability to take responsibility for their actions or being uncooperative until they get their way.
What causes it?
While many factors may be responsible for an individual’s failure to launch, the success of a family’s business operations can, paradoxically, often be the cause. We are all familiar with the expression “poor little rich boy/girl,” referring to the challenges of growing up in a family where not needing to worry about money can create not only complacency and laziness but low self-esteem, depression and unhealthy lifestyles. Whatever might cause such challenges, the parents of these adults often experience intense negative emotions, including frustration, disappointment and resentment, creating disruption within a family business.
The problem is common.
Families may prefer to struggle in private rather than seek help from professional advisors for a variety of reasons. Available evidence suggests that the problem is all too common. A 2019 Scientific American article noting that failure to launch syndrome is a growing phenomenon, reported that “in 2014, over seven million American men ages 25-54 were neither working nor looking for work, up 25% from 10 years prior.” Too often this problem is accompanied by alcohol and drug abuse, and it’s important to state that issues related to alcohol or drug abuse, mental illness and other clinical issues are beyond the scope of this article. Advice from professionals with expertise in such matters should be sought.
Family businesses can enable failures to launch.
It’s not unusual for parents to think that if their child has all the trappings of a good life, then they are being a good parent. Parents who own a family business can unwittingly enable a child’s failure to launch by, for example, providing employment opportunities for which their children do not have the requisite education or experience, tolerating underperformance or providing excessive compensation beyond one’s job responsibilities.
Ideally, parents with interests in family businesses recognize early on the unique dangers created by wealth and opportunity, including the risk that their children will grow up feeling entitled and lack the ambition to live a constructive life. Appreciating the challenges of having “too many opportunities,” parents with younger children can develop plans and strategies to raise responsible children that might include, for example, letting their children work through disappointments, teaching responsibility through household chores and requiring teenage children to hold summer jobs. Such steps can help children develop the healthy self-esteem that comes from a sense of one’s own competence.
Ignoring the problem can only make things worse.
Given the private nature of family-owned businesses, it is impossible to know for certain what the real impact of family dysfunction caused by failure to launch syndrome is. But I’ve seen firsthand that the problem is real and that many families lose their businesses and much of their wealth because of dysfunctional family dynamics.
While a strategy seemingly employed by too many families is to “hope for the best,” that approach is fraught with risk and the results are too often disappointing at best and tragic when lives are lost to overdoses and suicides. Parents and their families need to take these issues seriously and secure appropriate professional support. Indeed, the best gift a parent can give their child — even as an adult — is the confidence that they can support themselves.
In part two of this article, I will offer seven steps for family business owners with dependent adult children to consider.