Denial is Often Subtle . . . 3 Types of Denial

“Okay, it sounds like I’m the problem,” the CEO said. I was in a one-on-one meeting reviewing the aggregate results of our in-depth interviews with his leadership team before meeting with the larger group to work on creating action plans to address some issues in the organization. His voice sounded relaxed, matter-of-fact. I didn’t sense any defensiveness. I glanced at his face, no sarcasm, no guilt, no embarrassment. “What do you mean?” I asked, checking to make sure my observations were on point. “It sounds like I haven’t been really listening to the concerns of my senior leadership and I’ve been hanging on, too much, to what has worked in the past.” I felt myself relax. Here was a leader who wasn’t threatened, who was aware of his strengths and weaknesses, and who wouldn’t escape to some form of denial . . . it was a great sign, and an indicator that the consulting relationship had a high probability of making the organization better and, in fact, it proved to be true.

Photo by Akshar Dave on Unsplash

Leaders and Denial

If you were a “fly on the wall” watching my work with families and leaders over the past 30 years, you may have noticed a small, yet significant, pattern. A pattern of subtle . . . denial. Denial is not the same as ignorance—a “lack of knowing.” Instead, denial—in psychological terms— is a “poor coping-strategy” where the person denies what they actually know. Denial is a means of not accepting an uncomfortable truth. It creeps in, camouflaged in “normal speech,” in the smallest terms, in such words as “if, may, should, will, or possible.”

In business conversations you will hear it in statements like these . . .

“We really should talk about it, sometime.” (We are avoiding it.)

“We might be just kicking it down the road.” (You are.)

“I’ve been in business a long time and I know what works!” (I’m not willing to change.)

“If we really have a problem, it could be critical.” (You do, and you know it.)

“What the employees are doing doesn’t make sense.” (Because we don’t want to face the real issue.)

“When problems come up, we address them.” (Without considering why we have problems repetitively.)

“I’m pretty honest about my weaknesses as a leader.” (But employees view them as defensive, inflexible and demanding.)

“I think I do a pretty good job of communicating.” (However, employees don’t risk telling leaders their true thoughts because “no one listens.”)

“Our team is like a family.” (But, don’t ask me their kids names!)

“We know that employees will make mistakes.” (Yet, mistakes are hidden, lied about, or ignored—and are not harnessed to improve the team.)

Avoiding the Uncomfortable

For some, the denial is all about avoiding how they themselves,-or someone they care about,-will feel, in Family Businesses a comment, such as “I don’t want Mom to think we are trying to push her out.” Or “I don’t want it to seem like we don’t appreciate Dad’s vision and sacrifice—we wouldn’t exist if it wasn’t for what Dad created,” are common examples. Core values the leader possesses can’t lead them to turn a “blind eye” to problems.

In other, venues it can be “soft-peddling” around key employees whose behavior is problematic. A supervisor with an anger issue. An absent senior executive. An owner who impedes operations due to their need for a sense of crises, or conversely, control . . . or one of a multitude of other presentations of difficult personnel situations.

Contradiction in Terms

At other times, the subtle denial may be seen in contradictory statements. “I love this organization” and “They can’t make me quit!” INo matter how much damage will result!) Or “I trust them to be in charge,” and “but, if they can’t do it right, I’ll have to take over.” (I don’t really trust them!) We want to harness employee’s creativity. (But we punish mistakes.) “This trend will pass.” (But the company made it’s mark by innovating.")

Contradictions are often noticed by other leaders. However, the means to address issues and produce changes often frustrates the best attempts to find a sustainable solution.

The denial, in these conditions, is likely only to get stronger in the face of direct confrontation. The leader simply insists that they are doing what is best for the organization. Yes, they believe it . . . and the opposition merely reinforces this belief. After all, who would go through the “attacks” they are getting if they didn’t love the organization? The contradictions, in a world of denial, make good logical sense. Operationally, they are the prelude to a an emerging crisis, if not a potential disaster.

It’s all too frequent . . . For example, leaders, with a talent for being innovators in their markets, fail to see the need to continue that innovation. Ford, the manufacturing pioneer, insisted that consumers only wanted “basic transportation,” stoped innovating, and allowed competitors (General Motors,etc.) to capture the market; IBM didn’t see the personal computer as the next step in leading the way in the industry it created; Xerox, Blockbuster, Polaroid, Yahoo, J.C. Penny, Sears, Blackberry, My Space, Radio Shack . . . all too frequent!

Forms of Denial

Denial can present in three primary ways:

1. Denying the facts: In this denial the leader argues that the problem, symptoms, behaviors or needs don’t really exist.

2. Minimizing/Rationalizing the problem: In the second type, the facts are acknowledged but there is a denial of the severity of the problem and/or there can be significant rationalization about why the problem exists (usually, not implicating any mistakes on the part of the leadership)

3. Short-sighted Focus: A third type of denial is an unwillingness to acknowledge the long-term consequences of the problems. Similar to the second type of denial, this is “future focused” denial. Seeing the problem as acute, a “phase,” or a fluctuation and not considering the consequences over type of the problems is denial.

Next Post: Denial is Acute . . . in Emotional Systems like Family Business

The forces that can lead to accepting the “smoke scene” of denial are particularly acute inmate “emotional systems” like non-profits, ecumenical organizations and family businesses.

Think of it like this, if you saw some teenager bullying a younger, or smaller, kid you would intervene, wouldn’t you? Calmly, assertively, you would step in, stop the bullying, and take whatever appropriate action was called for. Now . . . what if that kid was your son or daughter? How calm would you be?

Our free resources: Family Legacy: Protecting the family in family business.

Engaging Your Team: A framework for leading “difficult” people.

Why won't they let go? Fear in the Family Business

The term “death-trap” comes to mind when I see this . . . but maybe that’s just me. Photo by Priscilla Du Preez on Unsplash

A Personal Confession

Rollercoasters evoke fear for me. There, I admitted it. It's not that the action of the rollercoaster—speed, erupt changes in direction or height—cause me fear, they don’t, it's the notion that these mechanical wonders . . . are mechanically complex machines . . . and complex machines . . . break.

Having admitted my fear, now, maybe, you will understand why the idea of “having a good time,” in my world, does not involve strapping myself to one of these mechanical devices; indeed, it would take just the right motivation (force?) to get me to risk of becoming a passenger. You may also, having realized the basis of my fear, be able to reason with me that my fear is irrational, and perhaps even in a way that gets me to reconsider my fear. After all, I do fly on airplanes. Oh, and yes, I have ridden rollercoasters in the past.

But, in the future? Probably not. For me a rollercoaster ride it is a waste of time and money. There is no “up-side” for me. I don’t get a thrill from riding. There is no “fun.” I’m long past the age of doing something I don’t like just to prove to others—or myself—that I’m not afraid. The motivator is going to have to be pretty good to get me to change.

Fear . . . and Holding on

If you got me on a rollercoaster and you were an astute observer, you might notice my discomfort. Nervous conversation, keen observation of the attendant locking the bar . . . subtle clues to my fear. Fear makes us want to “hold on” to what ever object seems to promise to save us from the feared outcome. A child will clutch to the seat or the safety bar or the parent,. an adult may simply hold on nonchalantly as possible but give away their fear when they “stiffen” with anxiety as the car moves over the course.

This fear and the natural tendency to “hold on”, reminds me of struggles I see in leadership transitions and particularly in Family Businesses—where the senior generation is holding on to the business and the younger generation is anxious to take over the controls.

So let's talk about the pertinent question from the younger generation's point of view . . . 

Why won't they let go?  

Ever had to "take the keys away" from an aging parent? Not so easy. For my family it was prompted by a few minor “accidents” over the course of one year followed by our local mechanic telling us that he intervened when one of my parents left the vehicle “in gear” and “bouncing against the concrete barrier” at a local store. He opened the car door, stepped on the brake, and put the car in “park.” Obviously, it was time.

So, why won't they give those keys up? Especially given all the alternatives for transportation? Family members reassure them that they will be taken wherever they want to go. There are offers to pay for assistance. Uber, Lyft, and other services are readily available in some cases. Still, they don’t want to hand over the keys.

Once the transition is accomplished—voluntarily or not—the senior often complains, repeatedly, about the inconvenience of not having their independent transportation and may have to be reminded about the reasons the keys were handed over . . . repeatedly. But, too often this difficult transition is made even more difficult because we think this should be a simple transition based on a logical analysis of the risks, right? Well, for many, it’s not.

Photo by Laura Gariglio on Unsplash

It's a funny thing about humans . . . “Keys aren't just keys.” Those keys represent much more. The senior may see them as “my independence, my freedom, my way of not feeling like a burden to others, my way of helping” . . . there are deep emotional ties that make what seems like a simple exchange, become a complex path to navigate. John Gottman, a researcher at the University of Washington, coined the phrase “dreams within conflict” to describe how, at the root of conflict, there often is a dream that is being unrealized or threatened. Not realizing the threat to that dream makes the senior’s resistance irrational—and invites unfavorable judgements of “stubbornness, controlling, emotional, etc.”

For my mom, as an example, I think that giving up the keys meant that she would worry about being a “burden” to others—anathema to her self-sacrificing consideration of others—in depending on them for rides.

Turning over a business

Why won't the parent’s let go?  After more than two decades working intimately with families, I can sum it up in a word: Fear. (Leaders of all stripes are, too often, Managing by Fear . . . and family firms are no different. In fact, “close-systems”—such as family business where there are more emotional ties—are more likely to be affected by management by fear at critical points during their development!)

What fear? Fear that . . . 

• the change/transition will make things worse

• the transition will place a burden on their children

• their own value and self-worth will be lost

• spending more time with intimate relationships will make life more difficult

• the business itself will struggle or fail

• their departure as a leader will, some how, harm the family

• fear that leaving will expose some personal weaknesses

One of the barriers to moving beyond this transition point, is that people are not very insightful about what is motivating their family member’s actions. The aging parent may think, "They are making too big a deal about this!" or "They just want my car!" . . . and their defensiveness, often becomes the excuse to redirect themselves from their own fear. The children do the same. “They won’t ever let go!” or “They want to keep control!” hides fears of not being trusted, anxieties about performance, and other issues. But back to the parents . . .

Find the Dream . . . and Address the Fear

Tied to each of these “fears” is a dream. The senior’s dreams that the change will not make things worse for the family, the employees, or the business. That there will still be a valuable role that the parent can occupy within the family or children’s lives. That family relationships will improve or at least not be damaged in the transition. That the business will continue to grow and succeed.

Helping the parent with the transition includes a couple of important steps.

First, they may need help in recognizing and stating their underlying dreams—taking care to both acknowledge the ones tied to the business role and not neglecting dreams that are not connected to the business**—and recognizing that there may be inherent conflicts within the dreams. For example, the senior may want to travel more, have less stress or responsibility and at the same time want to be present to make sure the burden on the younger generation is not too great to handle.

Second, they may need a well-defined process of addressing the fears and supporting movement toward making risk/reward decisions . . . normalizing and challenging the fears—that can help them get “unstuck” and make the transition move forward.

This is not an easy process. Often, it takes time, careful persistence to address the issues. Trust building (yes, even between parents and children!) and the slow process of addressing, and lowering, fears so that changes can proceed naturally. At times, families simply can’t, won’t, or will want to decrease the risks of a negative outcome by engaging an outside entity to guide the process.

However it gets approached, trying to force someone to get past their fears (i.e.: Fear Factor style) is fraught with risks. There is no doubt that it can make things change, if successful, but too often it will heighten fears, create more resistance, and worst of all, create a traumatic event that may harm the relationships necessary to make a transition good for everyone.

**Often the younger generation will over emphasize the dreams not tied to the business as a means to leverage change. This often backfires. The senior sees this as the younger generation trying to “force them out” or manipulate because the dreams and fears tied to the business are minimized instead of being addressed.

Available eBooks:

Engaging Your Team: A framework for managing difficult people.

Family Legacy: Protecting family in family business.

Quick Take-Aways from the Prairie Family Business Conference

I should be attending day two of the Prairie Family Business Association's Annual Conference. Unfortunately, pending blizzard conditions prompted an early exit from the PFBA Conference finishing today in Sioux Falls, South Dakota. But, I got to enjoy one day of the conference and I'll share a few quick take-aways . . .

Craig Culver talks about the history of Culver's Butterburgers and Custard.

Stacey Cunningham, Co-founder of Aegis Performance Group

Stacey, following up on last year's presentation from Captain Mike Abrashoff's Keynote presentation on the turn around of the USS Benfold reminded us of the importance of "crew interviews"--empahasizing the importance of really getting to know employees and communication among family business families. She also talked about "after-action reviews" to try and get to the root of problems and fix them so they don't reoccur.

Craig Culver, Co-founder and Chairman of the Board of Culver's Restaurants

Craig emphasized that at Culver's "the most important people are the team members." He noted that "guests" or customers are also important but prioritized the importance of the organizational culture. Part of the success, according to Craig, for Culver is "getting the right people" and they have a significant screening process and 17 weeks of training for new franchise owners.

De Vee Dykstra and Tyler Custis from the USD Beacom School of Business

Presenting on family business research findings from surveying PFBA members, the University of South Dakota (USD) researchers noted that 60% have some type of advisory board, consisting on average of 5 members with slightly more than half, 2.6, being family members. The boards meeting typically 2-4 times a year. They noted, cautioning that these were preliminary results on a small sample, that these boards were effective at resolving business issues but not effective at dealing with the family's issues.  They noted that only 9.3% of the Family Businesses had a family council.

Wayne Rivers, Co-founder and President, Family Business Institute

Presenting on "No B.S. Family Business Planning, Rivers noted that their is a crucial difference between FBA's that operate as a "Family-Business" versus those who operate as a "Business-Family."  He emphasized the need to prioritize the business aspects and by doing this well many family problems will be avoided. He also noted that the "Business-Families" do better on multiple business factors as well stating that BFA organizations return $6 of net worth as opposed to FBAs which, comparatively, return only $1. He highlighted the need for good business planning and focusing on people as two factors in success.  Finally, he noted that a mission statement should be simple and no longer than one sentence.

Dr. Justin Anderson, JSA Advising

Dr. Anderson presented on Leadership & Next Generation Development. This break-out session was of interest because it was operating within the "wheel-house" of our own expertise here at HSC. However, being an informed consumer did not make me a great "recorder" of the points in this presentation.

Thus, a caveat, I am not the average consumer of this material. With a Ph.D. in the same core area as Dr. Anderson, much of what was presented was already familiar . . . emotional intelligence, cortisol levels and the "fight or flight" response, trust and communication."

I say this, to preface my next comment for other FBA advisors who come from the world of Psychology . . . What is being utilized to work with professional athletes, fortune 500 companies, and family businesses is parallel to what your do in your practices every day. The techniques, tools and delivery may be more sophisticated (using video for recording meetings) but the content is not. (I had the same reaction working with an international research company and a manufacturing facility back in 1998.  This international company of experts were simply using t-tests and p values . . . the most basic of statistical analysis. But that is another story for another day.)

The above statement is not intended as a criticism of the presentation, which was done well, and I am sure, was new information to those without my background. But the biggest take-aways here related to what we emphasize as human systems consultants . . . Psychological safety is critical to communication and trust. The best leaders have high emotional intelligence. Focusing on the Situation-Emotion-Response equals Result process.  All-in-all it was a good presentation of the importance of Leaders developing good emotional intelligence as a critical factor for success.

So that't the "quick takes" from the conference. I love attending this conference! It'a a great mix of service providers and family business owners.  This year I got to meet and chat with a father-mother-daughter family, who run Triview Quality Communications. It is inspiring and informative to have these contacts. If you are a family business, or a provider to family businesses, in the midwest, I would encourage you to check out the PFBA!

Family Business: The family "code" and tips on creating a "code of conduct" policy.

Pirate ship? Photo by Igor Ovsyannykov on Unsplash

Family Business: The “family code" . . . and Tips on creating a "Code of Conduct" policy.

". . . the code is more what you'd call 'guidelines' than actual rules." Captain Hector Barbossa, to Elizabeth Swann who tries to invoke the rules to her purposes. Pirates of the Caribbean

"So, what'll happen next?" I asked the daughter of the owners.

"Mom and Dad won't talk to us. There will be no invitations to their house. They won't come to a few of our kids events. They may not see it this way, maybe they just feel hurt, but it will feel like they're punishing us."

"How does it end?" I asked.

"Oh, after a couple of months they'll call about some issue. They'll pretend that nothing ever happened. But everyone knows it's just a matter of time till it happens again. It's a pattern. I guess it's 'just what we do.'"

The Code is the Code. It’s often “unwritten” . . . but powerful.

This family has a code of conduct. It is unwritten, not “discussable,” but clearly set by patterns of interactions over years. It has not, at least yet, undermined the family itself, but has a powerful impact on the family, the interpersonal relationships, and also on the family business. Employees feel it. They know when the family is avoiding one another. They know what issues not to bring up.

Families have different styles of communication and approaches to conflict resolution. Most styles are stable--but not necessarily conducive to growth--a few styles are not stable or sustainable. These patterns of family communication and conflict management are, most often, instinctual and learned--not structured, planned or chosen. Families do what "feels right," carry on the patterns they experienced in their own families, or react against what they experienced--trying to do something different. The results are often mixed.

The Psychology Behind the Code?

While most manage to "put things behind them" for the sake of the family  Few people are aware of the psychology that influences their actions--yet, their family members may be keenly aware of the effects. Fear of rejection or failure? Nope. Afraid of isolation or lack of inclusion? No way. Unrealistic expectations or too much self-sacrificing? Not a problem. Ego tied up in being "in charge" and in control? No, just driven to succeed. But the effects are real and, again, they are often keenly felt within the family dynamics.

Helping the Family: Creating a Written Family Code

One small, proactive, step family businesses can take to minimize some of the risk to family members is to make expectations concrete. The process or discussing, writing, and adopting, a family "Code of Conduct" brings to surface the "best intentions" of the family, creates an "expected minimum" for family members, and establishes a structure for the family to return to when issues arise. It provides the extra benefits of modeling good leadership and can help you deal with difficult family members as well (not that you have any in your family!)

Why many will avoid creating a Family Code of Conduct.

One of the biggest hurdles to getting families to write a code of conduct is the belief that "things are fine the way they are." Maybe. But too often this "status quo option" is the view of one or two family members, not the thinking of family itself, nor in their best interests. It can be a denial of the "unwritten" code of conduct that already exists--"Everyone better do what Dad tells them to do," for example, and resistance to a transparent move toward change and growth.

A second reason it is avoided is the fear that it will surface some to the underlying tensions or problems in the family. Often there is an unspoken agreement to "let sleeping dogs lie"--fearing that approaching the issues will make things worse. Well, the truth is it can. Families with underlying tensions, often experience more tension, and even conflict in the short-term; some are even harmed in the process as they try to address issues on their own or even with consultants poorly prepared to use skills, training, resources, or knowledge to help the families successfully circumnavigate the potential dangers. 

However, for families that can effectively function, even through difficult and stressful circumstances, the discussion and adoption of written policies of family conduct is often very  helpful in promoting communication, decision making, and avoiding future conflict.

What to Include?

What should be included? That depends. The developmental stage of the family business will greatly impact what is addressed in this policy.

The needs of the "one controlling partnership" of a "Mom and Pop" just starting to incorporate their second generation into the business is dramatically different that the "cousin consortium" that encloses a complex group of families, owners, and business involvement within the family.

However a few key points are helpful to keep in mind.

First, you need to establish the purpose or goal of the policy. Why are we creating this? It should address a general philosophy of the family's view of the business and language about the importance of the family, the business, and the separation of work and family

Second, you need to establish who this policy is for and consequently what should be addressed. If you are staring to think about adding the kids to the business it might only need to address employment, professional development, loans, remuneration, and other basics.  If it is addressing a large complex family it might need to address the issues already noted but also expanded to address other topics such as the use of the family office, stock ownership, or many other issues as well.

Third, like it or not, the code of conduct has to address the issue of "what happens" if someone breaks the code. How will issues be addressed? Who will be included in trying to remedy any issues? Who will have the final "say" about actions taken?

Newer family businesses are less likely to feel the "need" for a written policy. However, by ignoring this, they only "kick the can down the road" and miss out on an opportunity to learn and grow, so that, later they have knowledge and experience to address more complex issues. So, don't delay! Protect your family proactively and don't fall victim to crisis planning at a time when the pressure will make it more difficult and potentially less successful.

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Family or Business? Ten Tips for Preserving the value of the family firm.

The Chicken or the Egg?

If you are in a leadership position in a family firm then you face the dilemma of, “which comes first the family or the business?”  But,“Wait a minute! You can’t just arbitrarily separate the two.  It’s not as simple as just asking yourself, “Which comes first?”  Okay, you’re right.  This dichotomy is a distortion . . . that’s true. But not asking this question can lead some family owners to poor management practices such as management by fear, over-committing to work, and to the demise of the family.  Later, I’ll share 10 tips to help you preserve the value of your family business, a task that is indicative of understanding the integration of the family and business. . . . .

But first, consider this . . .  If I audited your business, which part would I find gets the most attention and resources--including cash--spent on it?  Which domain has the largest share of advisers?  I just recently attended a social for family businesses where one owner indicated that they were about to have their "first ever" family meeting to plan for the future. "First ever!" for a large on-going firm with multiple family generations working in it.  This, unfortunately, is the norm not the exception.

Now ask yourself, this, "Which part of the family-business world gives you the most worries? " Are the biggest worries the business decisions you face? Or, are the biggest concerns for the family and the impact the business will have, good or bad, on the individual members and the family relationships? Family-based businesses that thrive find ways to preserve the value of both the family (including ownership) and the business. 

But many family leaders don’t pay adequate attention to the family dynamics and as a result the family suffers from unresolved conflict, damaged relationships, or all out family war.

I have seen it happen in so many ways . . .

• brothers who can’t get along, each trying to one-up each other and prove their value to the firm; 
• sons who feel entitled to taking over the firm and having a guaranteed career only to have that taken away (and then regretting not pursuing other careers;
• daughters who can’t move on due to the loyalty and needs of the parents;
• in-laws at conflict with their spouse’s family, each suffers from the grind of working, playing, and fighting together on a daily basis;
• parents who have given control over to partners to hold for their minor children only to find the partners and children at war over control of the company;
• husbands and wives at odds over a looming family crisis and how it should be handled. 

No mixing family and business is not easy. The very closeness and complex relationships that can be its strongest asset make family firms much more emotional environments than traditional organizations.

Still, family businesses are the most common type of businesses world wide. Many labor toward common goals, dealing with the family baggage well enough to survive . . . but living in the heightened emotional crucible of family-business tension. Others face transitional points (children entering the business or passing the baton) but have no road map for how to successfully deal with that transition. Yet many family firm leaders will tell me that the family is the business’s greatest asset.

Preserving the Family Business

So how do you preserve the value of the family business?  By taking the task of growing the “family assets” as seriously as you value the “business assets” of the company.  Here are ten ideas on how do accomplish it:

1. Develop a family constitution, mission statement, white paper, or some other guiding document for your family.  When my Dad died a few years ago (after working in one organization for fifty-one years!) I found a list of goals he had set for himself early on in his career.  It was remarkable how many of those goals had been met!  We shared it with the President ofthe organization and he shared it at the funeral. It was interesting to me that not all of the goals were business goals, some were personal goals and others familial. It became clear how he had stayed in a leadership position for over five decades…
2. Have regularly scheduled times (family board meetings) to focus on the family aspects of the family business.
3. Develop a strategic plan for the families’ growth.
4. Deal with baggage that is threatening the family and/or business quickly.
5. Identify and use family advisers.  No not your accountant, lawyer, or banker. I’m sure they are all competent professionals.  But there competence lies in accounting, the law, and banking.  Not families. Look for a family therapist (who understands business), a family-firm consultant, or another type of mental health professional.
6. Develop a clear understanding of the risks associated with each developmental stage of the family business.
7. Create a family “balance sheet” of the pros and cons of the family-business interaction and examine in annually.
8. Find ways to clearly distinguish “family time” from “work time.”
9. Proactively market the family business to family members.
10. Demonstrate the ability to be transparent, vulnerable, and forgiving.

If you own or work in/with a family based business, what has been the single best thing you have done to preserve the value of the family business?

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