Transgenerational trauma (TGT) plays a major role in shaping the dynamics of successful business leaders and family businesses. In this blog, we explore the concept of TGT and the impact it can have on both the family system and the family business.
If you’ve ever reflected on the patterns in your family that repeat from generation to generation, you won’t be surprised that trauma can also be passed through the generations. This is known as transgenerational trauma.
Many successful business leaders have a history of trauma and their coping mechanisms included entrepreneurial behaviors that enabled their business success. To better understand why that is, we’ll explore the concept of TGT and then explain some of the overarching effects it has on business leaders and family businesses.
What Exactly is Transgenerational Trauma?
To start, let’s make a key distinction. “Trauma” is not what happened to a person. That is the “traumatic event.”
Trauma is what happens inside a person as a result of the meaning they make of the traumatic event. This meaning impacts their identity, behaviors, health, and overall functioning. It can create biochemical, physiological, and behavioral effects on the person who experienced the traumatic event.
Those effects can then be passed down to future generations through both nature (epigenetics) and nurture (experience). This is transgenerational trauma.
While there are many factors that influence the dynamics of a family business, TGT plays a major role in shaping recurring behaviors that can both help and hinder a family business.
Let’s dig into what those impacts can look like through the lens of some of the world’s most well-known business leaders.
The Impacts of Transgenerational Trauma
Sumner Redstone was an entrepreneur whose drive to succeed led to building a media and entertainment empire. The media giant built his company, National Amusements, Inc (NAI) through acquisitions.
At the time of his death in 2020, he held 70% of the voting stock for ViacomCBS. He had been forced out of the Chairman role when the Board legally challenged Redstone’s mental competency.
In his 2010 book, “A Passion to Win” Redstone describes his fierce competitive drive and relentless pursuit to dominate the entertainment industry. He also indirectly describes traumatic experiences, coping behaviors, and other aspects of his psychology that epitomize the term entrepreneurial personality.
His descriptions of the relationship with his father and significant traumatic events are hallmarks of a man who overcame adversity and built a self-identity tied to winning at all costs.
Redstone is not alone in this regard. Steven Jobs, Elon Musk, Jeff Bezos, James Dyson, Donald Trump, and many other famous business leaders have a documented history of trauma that profoundly impacted their identity, motivations, and leadership styles.
Many of the habitual behaviors that made them successful were likely started as coping mechanisms as they made meaning of the traumatic events experienced in their lives. Their success then reinforced these behaviors.
It’s also important to note that business and entrepreneurial success driven by trauma can take both positive and negative forms. Many of these leaders mentioned above are known for toxic leadership traits as well like being autocratic, tyrannical, utilitarian, and transactional. There are also plenty of business leaders who turned those traumas into positive leadership behaviors like goal achievement, teamwork, self-leadership, and choosing gratitude.
Having the context of how trauma can affect the behaviors of these well-known business leader, let’s examine how it affects the family business structure more closely.
Transgenerational Trauma in Family Systems and the Impact on Their Businesses
Beyond the rarified billionaire circle, many successful owners and enterprising families have similar stories.
While researchers continue to pursue scientific insights that explain the complex biopsychosocial mechanism for successful entrepreneurship, what we do know is that the residue of unresolved trauma permeates families for generations.
At Orange Kiwi, over the last twelve years we’ve worked with hundreds of successful entrepreneurs and enterprising families. Reflecting on that journey we find that each owner we have worked with has a story, most filled with traumatic journeys. Some of these are dangerous, scary, or violent events known as big “T” traumas, like Redstone’s heroic survival of the hotel fire. Others are small “t” traumas that involve fear, loss, humiliation, shame, guilt, or powerlessness at a personal level (eg., bullying, death of a pet, caregiver neglect, rejection by friend group, repeated failures, etc.).
There are stories of entrepreneurs conquering childhood neglect and abuse to fight their way to the top, being forced out of their country of origin to start over in America, facing mental health challenges and being unable to hold a job, finding escape in a creative endeavor that grew into a business doing hundreds of millions of dollars annually.
The coping behaviors that resulted from traumatic circumstances ultimately led to the creation of their family business where the coping behaviors were perpetuated rather than being resolved. It is through this mechanism that these behaviors are repeated through the generations. Unfortunately, the coping behaviors that led to early success of the business could hinder future generations as that trauma is passed down and behavior patterns repeat until the capacity in the business and the family hits a ceiling.
The question is, what can family businesses do about transgenerational trauma?
Awareness Leads to Change
The behavior patterns that worked at the start up and early growth stages of a family business in most cases are not the behaviors and traits needed in the maturity stages of the business as it gets passed down to future generations.
Awareness of these behaviors and how they have passed down through the generations is key. When those involved in the family business and the family system are aware of their TGT and how it presents in the behaviors of not only themselves but in their family members, they can begin to form a plan. When those behaviors are addressed, true change can occur that will help ensure the business (as well as the family) is healthy enough to continue to thrive for generations to come.
For a deeper dive on the interplay of transgenerational trauma and unique family business dynamics, check out our white paper, “Complex Change in Family Business: The interplay of family systems, transgenerational trauma, organizational culture, and decision-making.”