Happy Special Birthday (Use This Wish Sparingly in Family Business)

Just before my mother’s 90th birthday, I went to the drugstore to find a card for her. Alas, there was no “Happy 90th Birthday” card. How could that be, I wondered, at a time when centenarians have become so common in the US that the NBC TV's Today Show no longer features Willard Scott’s celebration of 100th birthdays (Scott himself retired from the show in December 2015)? What I did find in the card section, however, was a broad selection of cards for celebrating one’s “special birthday.” Now I understood: The use of “special birthday” designations made good business sense, as it eliminated the need to maintain inventory of cards for every possible adult age. In fact, “special” birthdays, as I’d come to understand them even before that drugstore visit, are often used to describe birthdays ending with a five or a zero. This custom began as a politically correct way to avoid specifying the exact birthday of people who might be sensitive about their age.

More recently, it has become customary to wish someone a “happy special birthday,” regardless of their age shyness. But doing so can have multiple negative consequences in certain situations. In general, after one reaches a certain age, say 60 or 65, every year becomes more precious, making the five and zero “special birthday” designations less meaningful—and less appropriate.

More specifically, my observation is that this innocent custom can have an adverse effect on leadership successions within family businesses. An impending “special birthday,” for instance, often prompts related thoughts among the birthday-holder and the wisher. The phrase may connote: “I know a secret about you—your exact age,” or “I’m not getting any younger,” or even “You’re a ‘has-been’ and it’s time to step down.” In this context, a family business leader may feel that it is too late for him or her to initiate new programs within the firm and thus might assume a posture as a steward or placeholder seeking preservation of status quo until a successor assumes the leadership position.

Here’s an example. I consulted with a family firm whose founder had built a spectacularly successful business that seemed capable of running forever on auto-pilot. His eldest son had worked in the business for over two decades and was the natural choice as successor CEO. When he ascended to the role, his four siblings were not actively involved in the business, as two were practicing attorneys, one was an investment banker, and the fourth was a high school English teacher. The second-generation CEO grew the business even more than his father had. Then, in his 60s, he suddenly became highly conservative about business strategy and finances. The shift was likely prompted by a combination of his age and respect for his siblings, who owned 80% of the company’s stock and had three children working there as executives. The CEO himself had no children. Late in his tenure, he simply stopped being a leader and positioned himself as a placeholder, waiting for one of the third-generation family executives to take the helm.

When family business leaders take that stance, no one wins. One effect is that the business becomes less able to make innovative changes under the current leader. Then, when a successor is selected and ultimately given power, it may take them years to create an environment that once again fosters innovation. Their struggles could have been eliminated and their prospects enhanced had their predecessor continued positioning the company for meaningful reinvention, including through:

  • Spending more on R&D to identify the best new opportunities and the challenges to avoid;
  • Enhancing governance, such that the board is better able to set and influence long-term strategy, regardless of who is CEO; and
  • Improving communications among shareholders such that family voice is as unified as possible and amplified, to be better heard by all stakeholders.

It would be ideal if wishes of “happy special birthday”could create a clarion call signaling it’s time for the family business leader to prepare for succession. There is so much planning and effort that goes into effecting a successful transition to next generation leadership, so an early wakeup call could be extremely helpful. Such wishes needn’t be a threat.

Of course, ultimately it takes more than a simple birthday wish to create a positive or negative leadership situation in a family business. But little things can reflect and influence familial, business, and cultural dynamics like those discussed here.

So the next time you are tempted to wish a family business leader a “happy special birthday,” think carefully about all the possible implications.