The Dangers of Entitlement - Tips to Avoid the Silver Spoon Syndrome

August 29, 2018


Children growing up in family businesses often feel trapped because they have been given titles and salaries that are not commensurate with their skills and education, but have a lifestyle that is now dependent upon their financial status. A failure to earn respect and position by virtue of our skills and actions tends to destroy both our sense of personal value and our surrounding relationships.

To avoid trapping the next generation in a life of constant failure, ridicule, low self-esteem and frustration, Lisë Stewart offers some simple guidelines for parents to consider. A little planning can make the difference of a lifetime.


Tim Schuster: Hello and welcome to our podcast. I’m your host Tim Schuster, and with us is Lisë Stewart, a director and founder in EisnerAmper’s Center of Family Business Excellence. In this episode we’ll discuss the recent article Lisë published about family business dynamics and how to avoid trapping the next generation in a dead end role. Lisë, great to see you.
Lisë Stewart: Great. Thanks, I’m really, really pleased to be here.

TS: Lisë, you recently wrote an article for our website called Gagging on the Silver Spoon. Can you tell us a little about how the concept of silver spoon kids impacts family owned businesses?
LS: Yes. You know, I think a lot of times when we think about silver spoon kids, we think about children who are born into, well, really, a lot of money. They’ve got wealth, and many times they don’t need to necessarily work for the rest of their lives, right?
TS:Absolutely, yes, absolutely.
LS: Well in the family business, this really plays out in, in sort of a unique way. Family business owners – and I know myself having been an entrepreneur and started businesses – you know we work really hard, and we want to do the very best for our children possible, right…
TS: Absolutely.
LS: … and so, if we have the opportunity to bring them into the business, as an owner it makes us feel proud, we’re excited, and we’re creating something, you know, that’s a legacy for our family. Well, unfortunately, sometimes these kids come into the family business and in our enthusiasm as owners we provide them with big salaries and big titles that they may not have earned, and unfortunately when that happens they find themselves trapped in a lifestyle and with a salary that nobody else would ever pay them. But, on the other hand, they’re in a job where they may not be the right person, they may not have the skills and knowledge, they may not have the respect of their coworkers, and that’s really not a pleasant place to be.
TS: Yeah, not a great place at all.
LS: No.
LS: And so that over time, what happens is that they dislike their job, they don’t like going into work every day, they feel disconnected to the company, and this often impacts their self-esteem. But, they can’t go anywhere else. By this time in their life, you know, they’ve got the big house, the cars, the boats, the private schools, whatever it might be…
TS: The lifestyle that goes with it.
LS:Exactly. Yes. And nobody else is going to pay them that amount of money, so they really do feel trapped. That’s why we often find the rates of - sort of - drug and alcohol abuse, depression, other relationship issues are pretty prevalent in family owned businesses.
TS: Yeah, no one wants to see that either. You always want to see everyone succeed, you know…
TS:… work towards that goal. So, just a question in regards to that – how often do you see that in a dynamic? Is this a common occurrence? Not common? Kind of just… what are your feels on it?
LS: It is fairly common unfortunately. Now, it is true that sometimes family business owners will catch it early. They see what’s going on and they try to correct that path. So they may step back and look at what they can do for, you know, their son or their daughter in the business. Sometimes it’s at that stage that they give their, sort of, tacit approval to go out and work somewhere else or do something else. But, if it’s not caught, if people aren’t talking about it, you can get into this vicious cycle that makes it difficult.
TS:Oh, that’s terrible. So, you know, how might a leader in a business recognize when the situation might be brewing? You know, what might he or she see?
LS: Right.
TS:Factors there, you know?
LS:Well, a couple of things. One, I often will ask business owners, so, do your children get… are they respected by the other people that they work with? So it’s really taking a look to sort of see, do people go to them for their opinion? Are they sought after? Are they well liked? Do they socialize with the other workers within the organization? Also just to sort of compare – if they were to go out and to try and find a job, would they be able to earn that job somewhere else, right? And if you answer no to those questions, it’s time to slow down and take a different track.
TS:That makes sense. So what can a family business do to ensure that their children don’t get caught in this type of situation?
LS: Good question. So, first of all, before bringing your children into the business, identify the knowledge, skills, ability, that somebody who may have or take a future leadership position, what do they need, and give your kids the opportunity to develop those skills – whether it’s through their education, whether it’s through the opportunity to work somewhere else, whatever it might be. Also, when you do bring them in, bring them into a real job – a job that’s paid a market rate. Don’t inflate the job and don’t inflate the salary. Bring them in at the level where they really deserve to be, and help them work up through the organization. Now it is true, often family members will get special treatment and that they’ll have access to, perhaps, some opportunities to learn, mentoring, coaching, etcetera, but it’s so important that they truly do earn their stripes and they understand the business really from the bottom up. Also, make sure that they are getting real feedback. It’s hard for parents to give their kids…
TS:Yeah, yeah…
LS:… feedback…
TS: … of course…
LS:… right?
TS: absolutely.
TS:Everyone succeeds. You wanted one that succeeds.
LS:That’s right, that’s right, and, you know, if they’re not doing well as a parent, you know, that’s hard to say.
LS:So, try to make sure that they’ve got somebody else on the organization that has permission to be candid with them, to give them really honest feedback on how they’re going, and that they listen to that feedback, right.
LS: And then, as they gain skills and knowledge, as they’re getting the respect of their coworkers, move them up as they understand the job, right. Move them up into positions where they can succeed. This is really the most effective way to be able to do this. Now again, as I said, family members will often move up through the organization faster, but it’s still important that they understand the job and can earn the respect of the people around them. And then, a final note is that, just because your kids are born into the family business, doesn’t mean they’re necessarily the right people to work in it, or to lead it someday.
TS:Oh yeah.
TS:Absolutely. Right, right.
LS:Yeah. But that doesn’t mean that they can’t be an owner, you know. It doesn’t mean they can’t be on the board. It doesn’t mean that they can’t benefit from the financial opportunities, right, through distributions, being part of a foundation. There are lots of different ways to include them. They don’t necessarily have to work in the business.
TS:Absolutely. Now, one question I was thinking of – you mentioned about working externally first, and potentially before you work for a family business – do you see there being greater success with that, where you work for maybe a competitor, and, whatever it is, maybe a manufacturing company, you work for another manufacturing company. Do you see there being greater success ‘cause maybe they see, oh wow, that’s how they’re treated here versus how…
TS: … we’re being treated here, or… what are your thoughts on that?
LS:Oh I think that there are great benefits for doing that. One, they learn how to do it, right…
LS: … their job, in a different way, and they also get to see how other people lead businesses. Many kids who join the family business without ever working anywhere else, are sometimes pretty harsh critics of their parents. But when they have a chance to go somewhere else, it’s like, oh, it’s not so bad, right?
TS: Yeah, yeah, exactly.
LS:My parents are doing better than I thought – and so it gives them a much broader perspective. It also gives them access to other people and other resources, you know, not only chances to learn but also to build their own professional network of people, and they’ve earned their stripes somewhere else, so it makes it a lit bit easier to gain the respect of their fellow coworkers, right, when they come back.
TS:Absolutely, and I push everyone here listening to read Lisë’ article. It’s, it’s… truly is fantastic article. Just, for you to take a chance to read and, you know, digest yourself, and, Lisë, do you have any closing comments on what the piece that you wrote?
LS:I think really any business owner who has built up a company that can provide both employees and maybe family members with a job, should be very proud of themselves, and there are many ways to reap the benefits of doing that. Sometimes it’s by bringing children into the business when they’re a good fit, and sometimes it’s by not bringing them into the business…
TS:Yeah, yeah, yeah.
LS: … and letting them benefit in a different way. So, yes, both are right, it just has to be right for the business as well as for the individual.
TS:That makes a lot of sense to me. Thank you Lisë for being here…
TS:… today, and, you know, thank you for listening to our podcast as part of the EisnerAmper podcast series. If you have any questions or there’s a topic you’d like us to cover, email us at Visit for more information on this, and a host of other topics. And join us for our next EisnerAmper podcast.

About Lisë Stewart

Lisë Stewart is Partner-in-Charge of the Center for Individual and Organizational Performance and the Center for Family Business Excellence Group, as well as a leader of the firm’s Environmental, Social and Governance Services (“ESG”) practice. Lisë has experience in organizational development, strategic planning and training, and human performance management.