“Family Business” … makes no sense! Introduction (Part 1)

 (sans knowledge, focus, skills, and discipline).

Introduction (Part 1)

Every family business has a business family sitting behind it, but the basic concept behind Family Business” actually makes no sense, because every commercial driver needed to make a good business conflicts with the human success factors that make families happy:

This creates a huge conundrum: family businesses are the most common form of business structure in the world, and have been since the beginning of recorded history, but by all the rules of humanity and commercial commonsense they shouldn’t be.  Fundamentally, it makes no sense to mix a family with a business and, like most inappropriate mixtures, the results can range from disturbingly distasteful to catastrophically calamitous.

The following series of articles will describe at least 50 observably common causes of family business conflict … and that’s not all of them, not by a long shot.  QED?

They’ll also offer some strategies and solutions for preventing, avoiding, and resolving family business conflicts.  Like anything to do with families, complexity and unpredictability make it impossible to guarantee success, but that’s no reason not to try.

The Family Business Curse 

Dysfunctional Business Families are cursed.  They suffer long-term unhappiness, no matter how materially successful they are in business, nor how wealthy they become as a result of their business activities.  In fact, business success can be an indicator of family dysfunction – especially when success has been created by rampant entrepreneurs, domineering Matriarchs, and/or imperious Patriarchs.  This exemplifies the Family Business Curse – a Faustian bargain with the Devil that sacrifices family happiness for material gain, instead of working with the Angels to create happy families and strong businesses.

According to most of what we learn during our growing up years, families are supposed to be environments full of love, respect, nurture, support, growth, happiness, and trust – where parents keep everyone happy and safe, and siblings show unconditional love and undying loyalty towards each other.  When this isn’t happening, or worse – we perceive that our own family life is the very opposite of what it should be – it challenges our whole world picture.

When we feel helpless to fix things, or feel guilty we’ve somehow caused or contributed to an “unnatural” situation, being part of a dysfunctional family can seriously screw with our own sense of self and self-worth, even if we’re objectively blameless.

Family Business Success

There’s very little that’s natural, or the result of pure luck, in the makeup of a successful Family Business – especially one that’s survived in a family for several generations.  Scratch the surface and you’ll find a family that’s worked hard doing almost whatever it felt it needed to do to produce and sustain a cohesive family team that owns, manages, and takes pride in operating its own business.

You’ll also find a family that has created an appropriately structured and complex environment where family members actually enjoy working and socialising together.

This is where having the right knowledge, focus, skills, and discipline come in – to create a Business Family culture that harnesses strengths, manages and minimises weaknesses, creates clarity of purpose, and places the right people in the right roles, at the right time, so they can do the right things, in the right ways.

That’s a lot of things to get right.

The Challenge

Regrettably, most families don’t have the genetic constitution, and/or don’t work hard or smart enough to achieve Family Business Nirvana.  Like the participants in an unhappy marriage, they suffer interminable misery, life-long conflict, and constantly strained relationships – both in and out of the family, and in its business.

The outcome is “a mathematical certainty” when family members are forced, or feel obliged to work together in, jobs they wouldn’t naturally choose for themselves, and have to work alongside people they’d rather not be with, for a wide variety of reasons.

And sadly, making pots of money doesn’t improve things much, although it’s admittedly better than not making enough money.   Financial stress is a primary cause of dissatisfaction, complaint, and conflict between members of a business family.

The Best Practice Solution

To make sense of, and to create sustainable success for any family business, both the business and the family that stands behind it should be treated, with some unique tweaks, in much the same way as other comparable, complex organisations.  Relevant knowledge, focus, skills, and discipline should be applied to shape and direct their thinking.

Both families and businesses should reflect the resulting decisions in actions and deeds that seek to maximise quality, consistency, efficiency, and congruence with declared values and objectives.  This is essentially the concept of “business best practice” applied by businesses around the world since the early 20th century, including big boosts in the 1980s and 90s through the Total Quality Management movement and the introduction of Motorola’s Six Sigma Principles.

The basic principles used are the same for every family and every business, although actual outcomes are directed towards the specific needs of each entity.

I apply Family Business Best Practice operates as a process model, rather than as a set of prescriptive procedures and rules.  It’s based on decades of research and training, practical advisory experience, and open collaboration with complementary consultants and advisers – focussed on the nature, needs, and underlying dynamics of a wide range of business families, and their businesses.

A foundational requirement for Best Practice involves separating the family from the business for all important decision-making – to make each entity, within reason: free to apply its own values; follow its own visions; pursue its own distinct goals, and to do so in whatever ways seem best to them, according to their individual circumstances.

Best Practice alerts families and businesses to actual and potential problems and encourages them to deal with them sooner rather than later.  It advises strongly against ignoring problem issues in the vague hope they’ll magically fix themselves.  It treats small problems like weeds – best eliminated before they gain a hold.  But like weeds, problems are hard to see when small.  They grow large and prickly when fed, watered, and left unattended, and they get harder to remove as they gain in size, and develop deep roots.

Best Practice encourages business families to get the right people on the right buses and get the wrong people off the bus(es).

“Right people” create great cultures in families and businesses and support long-term sustainability in families and in their businesses.

“Wrong people” (including, and perhaps especially, emotionally / behaviourally troubled family members) are a danger to the greater good of everyone and everything, including themselves – unless and until they, and their issues, are dealt with appropriately.  That means taking things out of the business and inside the family.  Problems arise when personal / family issues are addressed or, more often not addressed, within the business.

Good leadership is critical.  Bad leadership can be fatal to the future success, and even the survival, of families and businesses.  Trustworthy leaders know where they want to go, are able to work out what they need to do to get there, and inspire others to be willing followers on the journey.

Because leadership styles vary enormously, it’s inevitable that the right family leader may not be the right business leader at any given point in time, and vice-versa.

We’ll dive much deeper into all of these issues in the coming articles.


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