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  • Writer's pictureTsitsi Mutendi

Taking a different path

The 2nd week of January 2020 brought with it the breaking news that the Duke of Sussex (Prince Harry) and his wife, the Duchess of Sussex (Previously Meghan Markle) were embarking on transitioning from their roles as Senior members of the British Royal family and would prefer instead to work on their own financial independence as the Sussex family. This announcement was met with shock and horror from many circles, delight, and support from other circles, criticism from others, and indifference from others. Whatever your thoughts, I'm here to table the issue from a family business perspective. I view the royals as a family business that has lasted for a very long time and is now at a steward family type. As we have seen from the Steward family dynamics, the pros and cons of navigating the family business continuity fall in the hands of how the family handles internal family issues before they affect the business negatively.

In the case of the Duke of Sussex, I would like to focus firstly and mostly on Prince Harry, I may not know him personally, but like many around the world, I was heartbroken when his Mom, Princess Diana of Wales passed, and I watched Harry and William walk behind their mother's coffin. In that moment, I adopted him into my heart and felt the pressures of not only his position but also the weight of the family business he was born into.

As the boys grew, it was obvious what the succession to the throne looked like. Prince Harry from birth was number 3, after Prince William and their father, Prince Charles. It was already unlikely that he would have the burden of ever heading such a huge family business, but being number 3 made him a very close next in line.

Ultimately when William married and had three children, the burden, although heavy, became significantly lighter with the birth of each child. However, in 2018, he faced many personal transitions; he became number 6 in line to head the family business and, most importantly, got married and was ready to become a father. His responsibility priorities became heavily leaning towards his personal family nucleus as opposed to the greater family business and greater family.

When Prince Harry's announcement came, it brought up the question familiar to family businesses, the question of what do you do when a family member does not want to work in the family business.

Some of the reasons that family members may decide not to work in the family business include:

Other interests: We are all individuals, and as individuals, we may not be inclined towards the family business, or even in the case of a family enterprise, the individual may not find any of the business owned by the family to be ones that are of interest to them. Contrary to the belief by some, that all family members should be a part of the family business. When an individual identifies that they do not want to be a part of the family business or that they are not suited to it, it is actually a good thing. Mostly because the job they were doing can then be filled by someone who is really interested in contributing in this role and who can push the interests of the business further.

Self-care: Self Care is a critical component of mental health and wellness. Mental Health is something that affects everybody worldwide. If not addressed appropriately, it can lead to significant issues in both personal and professional lives. In the case of the Duke of Sussex, he lost a principal parent at a very young age, and one of the reasons was due to continuous negative backlash from media. He experienced it in his personal life and furthermore is now experiencing it in his family life. He's found himself having to engage media over this. Ultimately this interest is due to his position in the family business and being a part of it. The choice being made is probably one made from wanting to prioritize his mental health and that of his family. Many may have different opinions, but I would like to say that bullying in any form is abhorrent. Making anyone feel sad or unworthy is deplorable. Back to family business and it's pressures, some people may not be able to handle the stress and pressures that come with everyday business. Lack of family time or personal time may take its toll. Some individuals within families, at some time, decide to take a step back based on this. Both the family and the business must have a business continuity plan and a robust succession plan that can help it transition from such changes. For the business, a solid succession plan that is solid and continuously in action will help get through such changes and help the stakeholders manage the transition. For the family, a solid structure and governance document such as a family constitution will be vital in helping manage the change and any consequences foreseen or unforeseen.

Conflict between family members, particularly siblings, may cause a family member to step back from the family business. While some conflicts can be resolved, others may cause a massive rift in both family and business, and ultimately affect the operations of the business. Three types of conflicts need to be looked into, in-depth, and often by a professional advisor or arbitrator brought on board to assist in identifying and resolve. Families must not try to avoid or hide conflict. It is a sure sign that there are unresolved issues, and unless they are in someway conclusively resolved or amicable resolutions are tabled, the conflict will remain a festering boil in the family and the family business.

Lack of interest: Being born into an established family business does not mean interest in the business. As part of the family constitution, family members should have the liberty to explore careers or interests outside the family business and ultimately choose those interests over joining the family business. In case of them choosing outside options, the family constitution must have in place the provision to ensure that these family members are catered without causing disgruntlement in other family members.

Financial Independence: In the statement issued by the Duke of Sussex, the house of Sussex will be following the option of financial independence. Sometimes being a part of the family business may have obligatory financial stipulations. These may not sit well with all family members. Some family members may feel that the cost of their independence in reference to the cost of the obligations they need to meet to remain financially funded by the family business becomes too high and too much. In short, the family constitution may dictate that for the family member to have their bills covered by the business, they must work for the business or satisfy specific requirements that the family member may not be able to. In this case, the family member may opt to separate themselves from the business. This does not mean that they are relinquishing their role or position in the family, but they are doing so in the business.

Jobs satisfaction: Not every job is suited to everybody. And in some businesses there are limited options available for family members. For example, by virtue of his birthright, Prince Harry's job options within the family are limited, and some may not be optional. And in some cases where it's take it or leave it, some family members decide to leave it and instead find themselves jobs that give them more job satisfaction. These jobs may not be in the family business. The transition in such cases are unique to the family and its business and should be handled accordingly. As every family is different, a one size fits all approach cannot be applied. Professional advisors able to navigate such issues would be advantageous to families such as these to navigate possible options. More so because on historical institutions such as the Royal Family, whose heritage is based on tradition, the voice of the Next Generation must be heard clearly, and some old traditions may need to be set aside and new ones created to accommodate the future leadership.

Fatigue and time out: The announcement given by the Sussexes was clear about stepping back. Over the period that they have been married, they have had back to back tours and engagements. For some, this may seem luxurious and enviable, but it's very much an outsider looking in perspective. Day to day running of huge businesses has its own protocol and expectations. This may be suitable for some but not for all. With a young child, the family may want to prioritize a different lifestyle for their smaller family, and this choice may not be suitable if they are in the operations of the family business. So suitably, it makes sense that the Duke and Duchess realized this after the birth of their son. Major persona life events sometimes require we take a time out. And it must be clear there is nothing wrong with such decisions. It is just necessary to manage the decisions and transitions properly because besides the family members, there are also stakeholders to the family business, and without proper communication or planning, this could cause insecurity and conflict.

It must be clear that, when a family member steps back from an active role in the family business, this does not mean that they are not a part of the family, nor does it mean that they are no longer a part of the business. What it actually means is that they are still a shareholder and stakeholder of the family business, but they now relinquish the role that may have necessitated that, that become a part of the day to day running of the family business. They simply become a silent, day to day running participant but instead take up a role that allows them to oversee the overall success of the business.

Furthermore, in this particular situation, if the family member had been a part of the day to day operations, they can be a key resource when it comes to advice in areas concerning their former position, or those positions similar to the one they once operated in.

Simply put, change is part of life; it happens in all areas of life, and so it should be an expected reality in family business. It, however, should not derail the business operations; the family and the business must then fall back onto their family constitution to find direction on how to handle transitions and assist the family member in transition to navigate into their new role.

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