The stigma of the drug addict is someone unkempt, unwashed, and unemployed. The reality of substance use disorder is that it touches everyone from billionaires to beggars, from boardrooms to barrooms. We see the homeless substance abuser because they have no place to go. We rarely see the C-suite substance abuser because they have the means and motive to keep their vices hidden.

Fortune magazine, however, sent journalist Lila MacLellan to take a peek at substance abuse in family-owned businesses. MacLellan is a corporate governance specialist and editor of the newsletter, The Modern Board. What she found is illuminating. 

MacLellan went to a business consultancy in Dallas, Texas, that specializes in family-owned enterprises. Over the years, they have seen substance abuse problems damage family businesses. How often? A review of 270 clients found that 55% had a family member in senior management with a problem. A majority of the firm’s customers had this elephant to navigate around. MacLellan writes:

[A]ddiction — usually for alcohol, though the consultants have dealt with drugs, gambling, and sex addictions, too — is an unrecognized challenge for family-operated firms.

In order to preserve the value of the business, and sometimes to facilitate its sale, the elephant in the room of a substance abuser who can’t be fired must be dealt with as a business problem. In an article on managing family businesses, American Express explains how bringing in a business consultant can help:

There are instances where one family member is experiencing a significant struggle that’s disrupting the family business, such as substance abuse. The temptation can be to distance yourself from that family member. But… it’s worth keeping in mind that person may have all the voting rights, financial information, and assets as other family members.

Some business consultancies have made it a specialty dealing with addictions, including drugs, gambling, and pornography. Most often, it’s alcohol use disorder, according to the Fortune article. American Express advises trying to get the family member into treatment. Fortune teases out exactly how that is done.

Fortune points out that heirs of family businesses often struggle to live up to the standards of the founding family members. Even though they typically grow up in material comfort, they bear psychological burdens that can lead to substance abuse. “Turning to alcohol, pills, or other drugs to cope with uncomfortable feelings is also easy to do when you’re wealthy and you have a lot of time on your hands,” MacLellan writes. She suggests:

• Consultants can help when the family is unable to set boundaries for the substance abuser
• Involving the family is essential; rehab only lasts so long but recovery lasts forever
• A consultant can help family businesses maneuver around the temporary or permanent loss of a senior manager

American Express stresses getting mental health support for those trying to juggle business management with family business and substance use issues. The consultant Fortune interviews says he’s seen hundreds of clients go through rehab. Many of them more than once. “They return to work… and do an effective job.”

“Families are most successful,” writes MacLellan, “when everyone becomes engaged in the process and commits to it through relapses, which are statistically speaking almost inevitable.” The consultant she interviews cites family support as “one of the strongest indicators of long-term success.” In the addiction recovery business, this is known as the community reinforcement approach, a circle of love that surrounds the substance abuser and helps lift them out of addiction, if they keep at it.

Written by Steve O’Keefe. First published August 27, 2024.

Sources:

“When the heir is also an alcoholic: Family businesses plagued by addiction share a few common themes, according to these consultants,” Fortune, August 22, 2024.

“How to Manage Your Multigenerational Family Business,” American Express, retrieved August 22, 2024.

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