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How alcohol can dilute your family business

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To help the problem drinker and save your company, stop tiptoeing around the elephant in the office.

By Ellen Frankenberg

“I was helpless to prevent the downfall of our family business,” laments Jane, a former owner of a printing company in the Midwest. Like many siblings who are not directly involved in their family firms, Jane admits she mainly focused on her own life; she had moved away from her hometown and was busy with her own career and family. By the time she realized what was happening, it was too late. The successful business her father had bought from his employer went bust under her younger brother’s leadership. The legacy her parents had provided for all three of their children was lost.

“In retrospect,” Jane says, “I understand that the core problem was alcoholism, concealed under the veneer of country club living, a high-end lifestyle and a social network of heavy drinkers.” There was an “elephant” dominating the business, and the family and their non-family employees had tried to ignore it for too long.

According to the venerable tradition of Alcoholics Anonymous, Jane’s identity will be protected. Her story is painfully familiar. The first sign of the elephant was a “tremendous increase in relationship problems, including an ugly divorce and a cut-off of ordinary contact with the rest of the family,” she recalls. Failure to communicate led to business decisions made in secret and the manipulation of funds for individual advantage. There were more golf games than strategic plans; more heavy drinking than financial analysis.

Like many second-generation family firms, the company was governed in a casual, informal style. No well-functioning board met regularly to review executive and company performance. As is true of all too many well-meaning families, no one wanted to trigger more conflict by confronting the issues, even as suspicions about major problems increased.

Eventually, Jane’s brother—a capable, attractive business leader who initially had enjoyed the confidence of his parents and the respect of the community—walked away from the business, seeking a “geographical cure.” He closed the doors and began a new life in another state, with no explanation to other family stockholders.

Unfortunately, a “geographical cure” seldom works. Jane and her other brother, whose only inheritance was their share in the business, were left with unanswered questions, frustration over what had disrupted the family relationships they had once enjoyed, and the troubling dilemma of whether to take legal action.

Trapped in a ‘CAGE’

In a society inundated with beer ads and encouragement to “party hearty,” our notion of normal social drinking has become super-sized. There’s lots of encouragement to drink a six-pack each weekend night, or two or three Manhattans a day. How do you know if alcohol is controlling your future and the future of those you love?

You can simply do the math: If you’re a man, do you have more than 14 drinks per week? If you’re a woman, do you have more than seven? If you’re a man, have you had more than four drinks on any day in the past month, or more than three if you’re a woman? If you answered “yes” to these questions, you may be at risk for developing alcohol-related health problems and should speak with a health care professional trained to recognize substance abuse and addiction.

Another way that professionals assess drinking problems is by asking whether alcohol is becoming a CAGE:

C: Have you ever felt that you should cut down on your drinking, or has anyone else suggested that you cut down?

A: Have other people annoyed or angered you by criticizing your drinking?

G: Have you ever felt guilty about your drinking?

E: Have you ever had a drink first thing in the morning (an eye opener) to steady your nerves or get rid of a hangover?

Here’s my personal definition of an untreated alcoholic: someone who keeps on drinking despite emotional, familial, financial, legal, physical, social or spiritual problems. Many alcoholics go to work every morning and try harder to prove they can get the job done. Some alcoholics give up drinking every year for Lent to “prove” they don't have a problem. Some episodic drinkers, who drink to get drunk only on “special occasions,” leave behind terrible memories of ruined holidays and children who expect promises to be broken.

Usually, problem drinkers change their behavior only when the pain of maintaining their drinking becomes greater than the pleasure it brings. When the bank refuses to refinance the company, or a divorce is threatened, or, in a state like Ohio, a salesman gets a bright orange license plate indicating a DUI, the resulting crisis may be sufficient to motivate change.

More often, change occurs when someone else stops enabling bad drinking behavior—stops lying about why the 8 a.m. meeting was canceled, stops taking on extra responsibility to cover for the alcoholic at work, stops stocking the refrigerator with beer, stops riding in a car when the driver is drunk or stops avoiding tough questions about the problem drinker’s job performance. As Alanon emphasizes, you can’t change anyone else’s behavior, but you can change your own.

Most professionals say that enjoying a glass of wine with a great meal or a frosty beer at a baseball game isn’t a problem if alcohol is not used to solve emotional problems. Some individuals “need” a drink whenever they are upset or frustrated; they also “need” a drink to celebrate every Friday afternoon, or every real or imagined victory. Teenagers who start drinking at 15 or 19 don’t learn how to manage the ups and downs of normal emotional development. When they finally become sober at 40, they may find themselves functioning with the emotional maturity of an adolescent.

No matter how it’s mixed, alcohol remains a depressant. Even though it reduces inhibitions, so that one may feel less tense (and less socially constrained), it contributes to a downward emotional spiral. The train that the alcoholic boards is headed straight downhill, and although some of us have a DNA loading that predisposes us to alcoholism, anyone who drinks long and hard enough can eventually flip the switch and become addicted.

Polysubstance abuse—the mixing of alcohol with prescription drugs, marijuana, cocaine, crack or other substances—is increasing, according to sources within AA. Those who mix alcohol with antidepressants engage in peculiar behavior indeed.

Advice for family business owners

Family business owners who dream of passing their business on to the next generation need to learn as much as they can about the drinking behavior of their kids and grandkids. Some college students drink like fish in the campus environment and somehow manage to move on with their lives as successful adults; other adolescents become belligerent, depressed poor performers who develop a chemical addiction that will remain a challenge for the rest of their lives.

If someone in your family can’t remember where he was the night before, or what happened to his girlfriend, this is no joke. A “blackout,” or loss of recent memory, indicates brain damage and represents a major red flag that should not be ignored, especially if you are considering the person as a future leader of your company.

Some grim statistics are worth reviewing. According to the National Institute on Alcohol Abuse and Alcoholism (, alcohol consumption leads to more than 100,000 deaths each year from alcohol-related injuries and illnesses. An April 2004 report noted that more than 12% of eighth-graders and nearly 30% of 12th-graders said they had five or more drinks in a row in the previous two weeks. Where are your children?

NIAAA reports that 29% of U.S. adults, or nearly three in ten, are “risky drinkers” who regularly or occasionally exceed screening guidelines. The category of risky drinkers also includes 7% of U.S. adults —about 18 million people— who met diagnostic criteria for alcohol disorders in 2002. How many are employed in your business?

Do any members of your family meet the criteria for alcohol abuse or alcohol dependence? According to the DSM IV, the diagnostic manual used by clinicians, alcohol abuse is characterized by failure to fulfill major role obligations at work, school or home; interpersonal, social and legal problems; and/or drinking in hazardous situations.

Alcohol dependence, also known as alcoholism, is characterized by impaired control over drinking, compulsive drinking, preoccupation with drinking, tolerance for alcohol and/or withdrawal symptoms.

Abuse of alcohol and other substances continues to be one of the top health problems in our society. At $400 billion per year, untreated addiction is more expensive than heart disease ($133.2 billion per year) diabetes ($130 billion per year) and cancer ($96.1 billion per year). The emotional costs are inestimable. How much has substance abuse cost your company already?

Some steps to take:

1. If you are concerned that someone in your family business has a problem with substance abuse, tell that person what you have observed—at an appropriate time—and ask him or her to get help. Studies have found that the most effective person to suggest treatment to an alcoholic is his or her boss.

2. Learn about Alcoholics Anonymous or Alanon meetings in your area by contacting your local Council on Alcoholism or the National Drug and Alcohol Treatment Referral Routing Service (1-800-662-HELP). Attending 90 meetings within 90 days (often scheduled quite flexibly) is one inexpensive but effective route to recovery.

3. With appropriate legal advice, require random drug screening, especially for those using heavy equipment or driving company vehicles.

4. Provide adequate benefits for addiction treatment through your employee assistance program or health insurance plan, or refer to your local health department.

5. Provide information and training for managers and other supervisors, so they can recognize substance abuse problems and intervene appropriately.

6. Recognize that chemical dependency can be treated effectively, like other illnesses, but there is no quick fix. It is not only an acute problem, but also a chronic one that requires continuing vigilance, “one day at a time.”

Substance abuse is maintained by secrecy and denial. It is treated effectively with honesty, compassion and understanding of this complicated and relentless disease. If there is an elephant stomping around inside your business, your intervention may be essential. After all, your business and your family are at risk.

Ellen Frankenberg, Ph.D., is a family business consultant who facilitates family meetings and coaches executives and successors ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it ).

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