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When Dementia Becomes the Silent Partner in a Family Business

Recently I overheard two family business consultants discussing the all-too-common situation of an 81-year-old business patriarch who was sabotaging a carefully-crafted succession plan. The man would agree in family meetings to gradually transfer control of the business to his middle daughter, a capable woman who had worked hard to build credibility among both the executive team and the assembly workers on the factory floor. Then days or weeks later, Dad would storm into the company and countermand her directives or say he had never approved some change, throwing staff into turmoil and infuriating his daughter as well as the family. He later would either deny he had done this or make various excuses why it was not a problem.

The consultants talked over individual and systems perspectives to figure out how to engage the business owner and the family in resolving the problem. As I listened to their attempts to analyze each member in the complex network that was the family business, I realized there was something else that could have quietly entered the picture, substantially influencing both the consulting process and possible outcomes. No one was considering the possibility that dementia had become a silent partner in the family business.

By age 85, we all have a nearly 50% probability of developing Alzheimer’s disease or other dementias as part of normal genetics and aging. Some families with genetic predisposition to Alzheimer’s have a much higher risk beginning at younger ages. Other types of dementia can develop above the age of 65 for someone with a history of high blood pressure, diabetes, or alcohol abuse. Early stages of various dementias can produce subtle yet powerful changes in behavior, personality, mood, and, most importantly, intellectual flexibility. What everyone assumes to be Dad’s (or Mom’s) unwillingness to let go of control may actually be due to declining insight, increasing cognitive rigidity, and gradually worsening short-term memory. All these are compounded by the tendency to cover up for deficits by minimizing the issue or steering people away from problem areas.

There was a not-insignificant possibility, therefore, that even with apparently good health, a cognitive disorder could be developing in the patriarch. It was as if a new person had entered the boardroom and the family, orchestrating what was happening in erratic, impulsive, and potentially destructive ways. This would impact family business succession planning, governance, and communication, particularly if the behavior had become difficult relatively recently or in an uncharacteristic way.

Carefully considering medical factors – some of which are treatable – can unblock an otherwise stuck consultation for the family business advisor. A formal evaluation may be necessary to check for medical factors undermining the transition for an elder in a family business. Yes, a diagnosis of dementia can be devastating to a highly intelligent and successful elder, along with his family. However, the knowledge that a medical disorder is affecting Dad’s reasoning can relieve the next generation’s anger and restart the problem-solving process. It can also allow the family to move ahead with previously-arranged options in family business governance related to disability.

As consultants working with elders in family businesses, we need to make sure we consider both psychological and medical factors at impasses in succession planning. By doing so, we cover all possible bases in our mandate to deliver effective and efficient interventions for our clients.

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