When an Iconic Founder Overshadows the Family Business – Harvard Business Review

It’s not uncommon to see family businesses in which the founder or leader plays such a public role that they become “iconic.” Often, the lasting effects of an iconic founder can stretch beyond his or her impact on the family to thwart the growth of the business going forward. An icon can cultivate and leave behind a “workforce of the past,” with loyal long-term employees defaulting to the icon’s preferred ways of managing at the expense of fresh ideas. They can nurture a culture of “yes” people rather than independent thinkers, and drive creative next-generation family members away from the business into their own endeavors where they have more control. When family members recognize the complexities of having a truly iconic founder, they can feel trapped. But there are steps they can take to prevent an iconic founder from overshadowing the next generation’s chance to grow and develop.

Sometimes a founder’s image is so publicly associated with his or her company, one rarely stops to ask, “Who is that person?” A few, such as Colonel Sanders of Kentucky Fried Chicken, Henry Ford, and Ralph Lauren become something even more than that; they become “iconic.”

For many family businesses, having an iconic founder has enormous benefits. Building the brand of the person simultaneously builds the brand of the company. As the company has more success, the iconic founder gets more famous and more idealized by their employees and their family. What could be wrong with that?

It turns out that having a full-fledged iconic founder (or leader) is not always a good thing for the sustained health of the business. Though it might be beneficial to have an iconic founder at the helm of a business for years, it can also cause family leadership beyond the founder to be much more challenging. After all, who can live up to the image of a truly “iconic” founder who has become a kind of exaggerated character — a two-dimensional representation of the business without any visible human imperfections?

When founders become larger-than-life icons synonymous with the business itself, they begin to overshadow everyone and everything around them. Worse still, iconic founders can start to believe their own hype and hold next-generation leaders to impossible standards. They can create a “loyal” workforce that is resistant to new leadership, and potentially even cause family members to walk away from the business. Ironically, a wildly successful iconic founder can unintentionally set his beloved business up for failure in future generations.

But being part of a business with an iconic founder doesn’t have to derail the next generation if the family can find a balance between honoring what the “icon” has built and putting their own stamp on the business to help ensure that it will continue to thrive.

Where Iconic Founders Go Wrong

It’s not uncommon to see family businesses in which the founder (or a later-generation family leader) plays such a public role that they become “iconic” — their individual characteristics are submerged under an image that is “preserved” as wise, kind, heroic, generous, spiritual and/or many other idealized traits. The image that is projected out to a wider public — often even beyond the business’s customers — is carefully maintained and protected by employees and by family members. This process of protecting the “brand” can have significant downsides. The more powerful the public persona, the more pressure is felt by the family and the company to keep the founder on a pedestal.

Sometimes the individual entrepreneur is in fact as wise and kind as the image portrays him to be. But more often, that real person is all too human. Successful business leaders, iconic or not, make mistakes in business and in their personal lives. Worse still, we have seen iconic founders who begin to believe their own publicity and consistently choose to grow their image over helping others to shine. Sometimes, they hold their children up to such high standards — standards that they think reflect their “perfect image” — that the next generation feel (rightly so) they can’t possibly meet them.

Iconic founders often lack empathy for the sacrifices others (family, employees) are making.  They often see the world through one lens, which leads them to push for business growth and celebrity at the expense of all other priorities. As family members seek the iconic founder’s approval, he or she just pushes harder to promote a super-human image. Those closest to the founder find it hard to challenge him or her in any setting, business or family, for risk of being disregarded by the icon — better to agree and stay in good graces than confront and be shut out.

We have seen difficult dynamics evolve in the families of an iconic founder. When the icon makes irrational demands or unkind judgements, everyone snaps to order — no one disagrees. Family members’ (and often employees’ and colleagues’) unpleasant experiences with the icon get buried: to discuss their pain or to criticize is to be disloyal. The iconic founder’s flaws — some of them grave — stay invisible.

Finally, the lasting effects of an iconic founder can stretch beyond his or her impact on the family to thwart the growth of the business going forward. The icon can cultivate and leave behind a “workforce of the past,” with loyal long-term employees defaulting to the icon’s preferred ways of managing at the expense of fresh ideas. They can nurture a culture of “yes” people rather than independent thinkers, and drive creative next generation family members away from the business into their own endeavors where they have more control.

One “Icon” and His Family

We know one such iconic founder who started as a talkative and charismatic pitchman for small kitchen appliances. Dale (a pseudonym) developed his own line of specialized cooking gadgets, which he grew into a national brand with a high-quality reputation. He became well-known on TV, appearing not just in ads for his products, but also on popular cooking shows. He often socialized with celebrity chefs, and he was invited to the White House several times.

Home, though, was a less comfortable environment. His wife resented what she saw as his manic focus on the company and his image; he was absent from the family outside of work most of the time. His relationship with their four children was strained. Two of the four chose to work in the company and strived unsuccessfully for Dale’s approval. Their father often told them that the business was “too complicated” for them to understand and that they didn’t have the “big imagination” necessary for leadership. The younger two lived across the country and were disengaged from the business and the family.

What’s going on this family is a typical response to a dominant iconic founder. In family businesses, there are four common dynamics connected to an iconic founder:

  • The first response is the tendency among the next generation to judge others relentlessly. Dale’s two children who worked in the business continually criticized each other’s ideas in management and board meetings. Privately, key executives and outside directors acknowledged that the siblings seemed like they were trying to “out-Dale” Dale. Dale, for his part, barely listened to anyone’s ideas but just talked about his own plans for the next big splash. Neither sibling seemed capable of extending support or appreciation to their key managers or board members, perhaps because none had been extended to them by their father.
  • The second common family reaction is to disconnect. In this case, Dale’s two youngest children moved across the country to work in unrelated fields. Friends often remarked on how their talents could be valuable to their family business, but neither wanted anything to do with it. At the same time, they were careful about how they discussed their father with other people, even with each other. There was no safe place to talk about childhood feelings of abandonment and inadequacy arising from their father’s self-absorption.
  • Eventually, when the icon is disabled or dies, a paralyzing effect occurs: Family owners and business leaders can simply stop making decisions, freezing the company in time. When Dale’s eventual dementia became obvious and he retired from public life, there was no one to take his central decision-making role. The two siblings who worked in the business became co-CEOs, but most of the time they could not agree. Each criticized the other for not being having the “big imagination” necessary to lead or not doing “what Dale would do.”
  • The final impact is on the business, which can get stuck. In this case, management and board members watched helplessly as the business foundered. The long-tenured non-family managers who thrived in the company were the ones who knew how to say yes to Dale and were not capable of or interested in bringing new ideas. Newer, more talented executives were quickly frustrated by their inability to accomplish their goals and soon left the company. There were no pathways to evolve the workforce or the brand.

How the Next Generation Can Counter-Balance an Icon

When family members recognize the complexities of having a truly iconic founder, they can feel trapped. But there are steps you can take to prevent an iconic founder from overshadowing the next generation’s chance to grow and develop as individuals in your family businesses:

  • First, acknowledge and appreciate the contributions of the founder, but don’t let their shadow shade your identity. Recognize the founder as a dynamic person who took risks with a career and with the business. Think of the founder as an inspiration, not a constraint. Forge your own career based on your skills and passions, whether within or outside of the business. Avoid the temptation to be a clone of the icon.
  • Second, look forward, not backward. Recognize that your generation will need to find your own way. As next-generation family members, you may not yet be running the business, but as future owners, you can start to communicate, meet, develop trust, and determine how you want to be collective owners of the business. You do not have to be tied to the founder’s version of how family owners should operate.
  • Third, be prepared to evolve. You will need to recognize the impact of the icon on the family and the business, and to have the courage to say, “We need to do this differently.” Families who move successfully past the iconic founder refresh their strategies and push their businesses to evolve. In the family, they allow the “icon” to fade and instead acknowledge the talented and flawed relative.

Dale’s family went through some tough times in the post-Dale era, especially the second generation, who never were able to work together effectively. Fortunately, the two siblings who worked in the business managed to at least hold it together, allowing the third generation to bring in a refreshed business perspective. While the cousins were distanced from the business and each other by their unhappy parents, they still felt a connection to the iconic founder’s legacy. They started asking questions about who Dale was and developed an interest in getting to know each other and the business better.

It may not be possible to shake the overbearing influence of an iconic founder until the third generation, if they aren’t aren’t paralyzed by their parents’ emotional baggage. With fresh eyes and enthusiasm, they are able to focus on what the business needs to take it forward. Family businesses can survive  and thrive even after an iconic founder fades away.