Great Family Businesses are made, not born. Although 1st generation entrepreneurs always know this fact, second and subsequent generations often do not. As we all know, family businesses, like individuals and families can easily become ill or fall into dis-repair. This is true even when there are only a few family members participating in the business as well as when there are many. Most often these signs are not seen until the illness or problem has become debilitating, which causes ever more harm and destruction to the individual, the family and the business. Like good medical health, the quicker distress areas are addressed, the easier they are to fix. Waiting too long can cause great damage, sometimes to the point of ending the life of the family business.
In one case there were two brothers who together built a great empire but inwardly deeply distrusted each other. They spoke kindly of each other in public, but never in person. In another, one son felt his brother was constantly favored by their Dad. Dad, of course always denied this. In a third case two sons after twenty years of working in the business together were rather surprised to learn that their Dad planned to bring in the third son to become President on the eve of Dad’s retirement. What are some of the typical signs of distress and how can they be addressed?
Although it is beyond the scope of this article to mention all of the signs here, let me elaborate on some of the major ones:
Mixing of Business and Family Roles – This occurs when the family is contaminating the business or vice versa. For example – one business owner proudly told me he was hiring his wife as Office Manager. “Does she have any experience I asked?” “No, but I trust her.” he replied. Another example, “My daughter needs a job that’s why she works here…”
Obvious Inequality and Favoritism – when one child is treated under different criteria or rules then others it is bound to create conflict and rivalry between the brothers and sisters of the next generation. One will always be asking why did my brother get this and I only received …”
Lack of Acceptance of Differences – There will always be conflict between generations and human beings. The ability to have constructive dialogue about these differences can build intelligence of the corporation. Autocratic leadership defeats this. The key here is the ability to dialogue respectfully different opinions, strategies and needs.
The Ability to Address and Resolve Conflicts – not only must differences be respected; the family business members must find a way to resolve upsetting issues and conflicts in such a way that maintains reasonable transparency in communication. If hurt feelings and resentments are harbored within the individual, they will fester, grow, and without question re-emerge later,
Career Paths – Each individual in the business – family member or not needs a clear sense of meaning in their life. For most people this is tied to a career plan – one that is both idealistic (striving towards personal greatness) and realistic (based on current or potential learnable skills). Clear career paths allows the business support the individual in their goals which will also increase employee loyalty.
Strategic and Succession Plans – No business does well over time without clear strategic plans. And strategic planning in a family business is impossible without succession planning. Although, often difficult and complex succession planning both in terms of ownership AND management must be addressed. Otherwise insecurity and power struggles will prevail.
If you find that the trust level between family members is decreasing, the communication is less open, work issues are less and less enjoyable, and the desire for wealth and money seems to becoming too important – take heed of these signs. Similarly, if you notice boredom, arrogance, addictions or other forms of low self esteem in any of your family members – address them now! Don’t give these diseases a chance to in infect your family or business.
Marc@sii-inc.net