So, in my first two posts, How “Over Giving” to your Kids Can Impact Future Succession Goals, and Did Your Child Earn That Title? The Impact of Giving What One Doesn’t Deserve, on this subject I have discussed how a past pattern of giving can have a negative impact on the eventual gifting of business assets.  The previous posts focused on two common areas where business owners “give” to their children, which can create havoc on the business, successor development and family dynamics – giving your child a job or a title without earning them. 


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 prerogative to give your children a paycheck. Far too many of you do. I recall one situation 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. I have also encountered countless children who are not involved in their families business, but who receive paychecks. The idea sometimes is that it’s easier to just pay them to go away.

Allow me to 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 in-authenticity imaginable.  The mark this stamps on you, your business, and your family’s reputation 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 noticeable. The blot on your child is substantially more noticeable and hinders their development forevermore.

In sum, what you cannot give your children is respect. In order for them to be a viable successor candidate to you, they must earn the respect of those they would aspire to lead.  Giving them a job, a title, or a paycheck may be beneficial to them and you in the short-run, but is ultimately the kiss of death to your child, and potentially 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 organization. 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 destination. The things they did to earn the respect they have garnered are the very same things they will need to continue doing to experience enduring leadership. The power and influence of having earned respect is extraordinary.