When Family is Business
If you are engaged in a family business, you know there are challenges and that those challenges are uniquely different from the kind your friends might encounter at their non-family workplace.
When a business is owned or managed by a family, its members must work together. Whether that means managing a small business with your spouse or sitting on a board chaired by your aunt and co-membered by your siblings and cousins; a high degree of collaboration is required.
This environment of close collaboration is why challenges business families face aren’t necessarily business issues; rather they are rooted in the family itself. The lines and boundaries between the business and the family are often blurred to the extent that it is difficult to operate objectively. The family’s dynamics play out in the business, and vice versa, leading to challenges and struggles non-family businesses don’t have. Family businesses are known to get stuck, trapped in patterns and unspoken rules that cripple business progress and block the sights for a unified path forward.
Bowen Family Systems Science
There is some science behind this dynamic. It defines both the business and the family as separate systems. In each, there is an ever-fluctuating level of anxiety and so they are referred to as “emotional systems”. Because the purpose of the family system and business system are different, those two systems ought to operate independently from one another. Each should have its own unique culture, norms and rules- spoken or unspoken. The big challenges in family business are the result of the ongoing mingling and crossover between the two separate emotional systems.
Family Dynamics in Times of Transition
Generally, these complex dynamics are normalized and tolerated, often far too long. Working relationships will limp along, and important business decisions and issues will lie dormant. But then when either system encounters change like; a transition in management, financially challenging times, a founder’s health setback, the addition of an in-law to the family tree, the departure of a promising next gen from the family business, things get rocky. These are all typical events that spike the system’s anxiety meter and then spills over onto the other. As these stressful events stack, the potential of the family business to build generational legacy erodes and slips toward a path of self-destruction instead.
The Path to Long-Term Family Business Continuity
For a better chance of long-term family business continuity, wise family business leaders prepare and plan for these types of events to ensure smoother transitions. And because it is difficult work, they draw on outside professionals to help the family and the business plan for and navigate the inevitable transitions.
Listed below are the general categories into which family business advisors fall.
Family Business Consultants: They typically cater to HNW families in gen three and beyond, where multiple family branches must build alignment and work together. They will assess the business’ most critical threats and make recommendations that might include the development of a formalized governance structure such as a board of directors and provide help identifying qualified candidates and a chair. Alternatively, they may suggest creating a family charter and council to manage the family-related system. Succession planning of both leadership and ownership is often involved as well.
Executive Leadership Coaches: These are certified professionals trained in the specialized arena of coaching. A skill quite different from consulting in that rather than making recommendations, they act as a thought partner with a focus on helping the existing leader gain clarity and new perspective. It’s often extremely helpful to have an objective outsider pose questions that shed light and develop new thinking to identify paths forward. This kind of support is best suited as the family business begins the process of identifying the foundational family values, vision, and mission.
Navigating Conflict: We often assume conflict is bad and that we are supposed to move through life smoothly aiming to avoid relationship conflict at all costs. But that’s not actually the best choice. Identifying and acknowledging areas of conflict is a healthy family business practice – working through it leads to a better understanding and stronger relationships. When conflict threatens to divide, help is available through Certified Conflict Management Specialists, Family Meeting Facilitators, Family Enterprise Mediators and Advisors. Each emanating from different disciplines and backgrounds. Each with their own unique approach to help business families find alignment so that they can continue to work together.
Family Dynamics Counseling: Because of the crossover between the family and the business, the relationships and patterns of the family system dictate dynamics in the business; often to the detriment of the business itself. Certainly, family business members might seek counseling to deal with their family-related issues and that independent work is helpful. But because of the complexity of the greater family and business systems, counseling with a therapist who specializes in family systems can have a broader and deeper impact. This niche includes certified professionals with a focus on Relationship Advising or Business-Family Therapy, as well as specialized support for Blended Families or Resilience Building within the framework of family business.
Wealth and Family: When a family enterprise reaches the critical juncture of third or fourth generation ownership, there is often significant wealth that adds to the complexity of the dynamics within the system. Again, professionals who do Family Wealth Advising can support and educate generational families on the emotional side of significant wealth. When a family is preparing for a transition, for example wealth is transferring from one generation to the next an Estate Attorney or even a whole team might be engaged to manage the legal documentation and tax consequences but should always be paired with a professional that can provide Beneficiary and Stewardship Education. Preparation for the responsibility of generational wealth helps to ensure that both the founding values and its continuity are preserved.
Additionally, because inheritors sometimes struggle with finding meaning and purpose, there are programs and organizations that specifically focus on supporting next gens. Growing up in a wealthy family is often alienating and so learning and sharing with others of similar background can be grounding.
Philanthropic Advising: Because working together toward a common cause brings people together, generational business families often find meaningful unification when working together to select and support a non-profit or make significant contributions to their favorite organization. Philanthropy Advisors are certified and work deeply with families to help them align their giving with their values and develop a sustainable legacy giving plan that supports the family vision and mission.
A Good Place to Start
Finally, if any of these scenarios are relatable and you want to learn more, a good place to start is podcasts and newsletters to learn about challenges other business families have encountered, their solutions and outcomes. There are bundles of published articles and books that focus on the unique stories of those family businesses who have overcome challenges and point to why others fail. Each offers new perspectives, offers solutions and shares best practices that, when put into place, brighten the prospects of continuity toward the building of a legacy.
Angelika Olsen is a family business coach and facilitator. She helps families come together, building alignment on values, mission and vision for the sake of long-term family business continuity. If you would like further information around the details shared in this article, reach out via email at Angelika@ angelikaolsen.com.
