1. April ’10 Edition Impacting Lives, Perpetuating Legacies
How Giving Too Much to Your Kids Can Impact
Your Succession Goals
December ‘14 Edition
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There are 3 common "giving" pi alls that create
future havoc on your succession plan. Most of the
me family business owners believe they are doing
the right thing, but are unaware of the long‐term
impact of giving or crea ng unearned rewards such
as a job, tle or a paycheck.
Giving‐Crea ng a Job
Many family‐owned business owners are fond of
giving their children a job in the family business.
You can actually do this. You can give your children
a job. Because you own the business, not only can
you give your kids a job, you can, in fact, create a
job where one doesn't exist, solely for their benefit.
You could, of course, do this for anyone, but most
business owners don’t do this for just anyone. But,
they do for their kids.
If you’re real honest you’ll also recognize the “blood
is thicker than water” reality. Your decision making
can be impacted, allowing you to fire or otherwise
remove another employee, or even a key manager,
in favor of giving your son or daughter a spot in the
family business. Based upon years of experience in
seeing the outcome of and dealing with the impact
of crea ng jobs, I do not recommend giving your
kids a job. They need to earn it. They need to come
into your business on the same terms as everyone
else. Namely, with creden als and an employment
history that has prepared them for the job
available. If no posi on is currently open, don’t
create an opening unless there is a jus fiable
business need for the role. If there is another
candidate more qualified, strongly consider them.
If you are an cipa ng the entry of your kids into
your family business, at some point, take some me
now, before there is any pressure on you, to
develop the criteria upon which you will welcome
your kids into the family business. It will pay great
dividends.
How you historically handle giving to your children
impacts their apprecia on for future gi s. If you
create opportuni es that don't really exist or just
give them things without having to work for them,
they will expect that sort of behavior from you in
the future.
Giving‐Crea ng a Title
Once your children find their way into the family
business, tles are o en given away before they
deserve one. Some mes it’s a made up tle. The
tle did not exist before your child entered the
business and was created out of pressure from
them to have pres ge.
If a tle is important to your child, it should be a
‘red flag’ of cau on to you. Typically, the need for a
tle can be interpreted as “I’m not confident in
myself and need a posi on to garner the respect I
feel I need.” Or perhaps they are afraid of not
measuring up and bestowing a tle makes them
feel they are mee ng expecta ons.
Unfortunately, a tle does not solve any underlying
issues. If you view your son or daughter as your
poten al successor, they need to come with a
package of what we refer to as the 5 Cs: Character,
Capability, Competence, Commitment, and
Community. The need for a tle represents
poten al issues with Character and Competence.
Perhaps their self‐esteem is in need of some work.
Perhaps their work ethic needs improvement and
they need to illustrate nothing in your business is
“beneath them.”
Yes, you can certainly give them a tle. The be er
rule of thumb is to posi on them to earn any
moniker that enhances their name. You would do
well to sit down and think through the ques on
“How will my children advance in the business?” If
your response is, “I’ll know it when I see it” you are
being a lazy thinker. There are definite things you
are looking for and when you see those things in
your employees they cause you to think “they’re
ready for advancement” or “they are a real up and
comer.” Slow down long enough to iden fy what it
is you’re seeing. Only then can you communicate to
your children the behavior/a tudes that will
posi on them for advancing on their own merit, so
they earn their way into any tle conferred upon
them.
By earning their way to the top, when the me
comes for transferring assets, your children will be
equipped with the skills, knowledge, experience
and character to appropriately appreciate and
manage the assets.
Giving a Paycheck
Now, most people in the world are not “given
“paychecks. This is a special benefit that only exists
for children of business owners. It is certainly your
preroga ve to give your children a paycheck. Far
too many of you do. I recall one situa on where a
business owner’s son was on a guarantee of
$280,000 per year. No one else in the business had
a guarantee at all, much less to the tune of $280k a
year.
Continued on back…..
JeffFaulkner
Christmas is most
truly Christmas
when we celebrate
it by giving the
light of love to
those who need it
most.
Ruth Carter
Stapleton

2. Jeff Faulkner, jfaulkner@rawlsgroup.com
How Too Much Giving to Your Kids Can Impact
Your Succession Goals, continued
I have also encountered countless children not
involved in their family business, who receive
paychecks. The idea some mes is that it’s easier to
just pay them to go away.
Let me be clear – there is no greater harm you can
do to someone’s sense of dignity and self‐worth than
to give them a paycheck. Rest assured, they will
overcompensate for their low sense of self‐worth
and present themselves in the public eye with the
highest degree of misrepresenta on
imaginable. The mark this stamps on you, your
business, and your family’s reputa on in the
community is not one that is easily overcome. Sure,
people can swallow it and do business with you
anyway, but the stamp is there and its impact is
no ceable. The blot on your child is substan ally
more no ceable and hinders their development
forevermore.
In sum, what you cannot give your children is
respect. For your child to be a viable successor to
you, they must earn the respect of those they would
aspire to lead. Giving them a job, a tle, or a
paycheck may be beneficial to them and you in the
short‐run, but is ul mately the kiss of death to your
child, and poten ally the future of your business.
Don’t give it to them. Create an environment in
which they are delighted to earn the respect they
will need to lead your organiza on. It will pay great
dividends.
One last thing ‐ remember to encourage them that
having earned their way to leadership doesn’t mean
their job of earning respect is over – they have not
arrived at their final des na on. The things they did
to earn the respect they have garnered are the same
things they will need to con nue doing to experience
enduring leadership. The power and influence of
having earned respect is extraordinary.
The Rawls Group
1700 West Colonial Drive
Orlando, FL 32804
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IN THIS NEWSLETTER
How Over Giving to
Your Kids Can Impact
Your Succession Goals
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