Cause #34 Dysfunctional Business Families

Family dysfunction is a common cause of conflict in business families.

Family Dysfunction (clinical definition): a family is dysfunctional when conflict and/or serious misbehaviours occur regularly and are accepted as the family’s behavioural norm.

Business Family Dysfunction (family business definition): a business family is dysfunctional when its fundamental inability or unwillingness to solve problems and make wise decisions results in constant conflict, long-term relationship breakdowns, continuous frustration, and sub-optimal outcomes for the family and its business.

Common characteristics of a dysfunctional business family may include:  Dishonesty;  Issue Avoidance;  Addictions;  Unrealistic Demands and Expectations;  Childhood Abuse and/or Neglect;  Unpredictability;  Fear;  Emotional Blackmail;  Conditional Love;  Vague or no Boundaries;  Limited Intimacy;  Excessive Dependency (broken wing syndrome), and Poor Communication, Problem-Solving and Decision-Making Skills and Systems.

Family dysfunction indicates that the core family system is seriously damaged, or broken.  There’s seldom a quick fix for a problem that’s taken years to develop.

Properly functioning group systems make constant efforts to maintain equilibrium, restore focus and alignment, and ensure harmonious interactions between all parts of the whole.  Dysfunctional families don’t, because they can’t or won’t, do this.

In nature, any member of a pack, hive, pod, flock, herd, school, troupe, or murder (of crows) that displays dysfunctional behaviours by unsettling, obstructing, opposing, fighting or generally misbehaving in ways that damage the body politic are (best case) exiled, (worst case) killed.  This is natural selection at work: excluding “defectives” from the gene pool, to ensure the survival of the species.

In civilised society, and especially in families, we rarely dispose of difficult individuals in either of those ways.  Instead, we try to understand the cause and effects of dysfunction, and invent excuses to explain, and even justify, the behaviours of troublesome, and often troubled, individuals.  This worsens the unbalance – as additional financial / emotional resources are committed to a single recipient, often by unilateral command – to shield and support a troubled individual.  The inevitable result is even more disharmony, jealousy, and conflict.

Some family members try avoidance – excluding the dysfunctional individual from certain family activities.  But that doesn’t stop them being family, and there’s usually a pitying/nurturing family member (often Mum) who’ll step in to stop that happening.

Dysfunctional individuals rarely absent themselves from family affairs for long – their emotional neediness forces them to stay involved, even if it hurts.

When family dysfunction transfers family conflict into the family business, the result for the business is much the same as for the family – and the more intimate the business, the greater the impact.

Serious family dysfunction creates inefficiency, dissatisfaction, and conflict in the family business.  Eventually, it destroys employee morale and business competitiveness by damaging the speed, quality and reliability of commercial decision-making.

Regrettably, many family businesses become an unwilling arena for the acting out of bad behaviours between family members.  Dysfunctional individuals feel more protected in a structured, open business environment, surrounded by non-family employees, than they do in family gatherings, where everyone sees through the gameplay, and knows how to push everyone else’s buttons.


Any remediation / self-defence process needs to be started by a “champion”.  It’s almost invariably a family member who finds the courage to call out: (a) the individuals’ dysfunctional behaviour;  (b) the family’s dysfunctional response and, (c) the need to seek expert help from outside the family to deal with the problem, preferably in a non-destructive way.  Dysfunction can rarely be dealt with internally, or it wouldn’t have developed into the challenge it’s become.

Process Steps:

  1. Conduct independent, individual interviews of all key people, including trusted employees and advisers, to get a handle on what’s really going on, from a range of perspectives. Understand what’s going wrong, and what everyone feels needs to be done to correct the situation, before proceeding.
  2. If there’s a concern about serious behavioural anomalies, get a competent psych to conduct psychometric (personality profile) tests on your key people. The resulting objective analysis of the behavioural preferences and styles of the family team provides an excellent basis for holding deep and meaningful conversations about individual behaviours and their effect on family dynamics.
  3. Develop a go-forward plan, through an independent facilitator. It may range from: (a) stay put and work on changing behaviours / expectations / responses to (b) get them out of there!

Family dysfunction is a common cause of conflict in business families.  It’s a problem that cannot be resolved internally, relying on the same people and responses the family has always used, because: “We cannot solve great problems at the same level of thinking that created them” – Einstein.

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