In some family businesses, family members get along, communication is effective, each individual contributes to the success of the business, and the transfer of leadership from one generation to the next is planned, smooth and seamless.
If you work in a family business like that, consider yourself fortunate. Most likely, the person leading the business has developed a few personal rules to guide his relationships with other family members. These “principles for relationships” might be written down or just solidly imprinted in a wise owner’s brain.
Leaders who live by clearly developed relationship guidelines are more likely to avoid emotionally reactive mistakes that can be perilous to the business and to the family.
If enlightened family business leaders pooled their most sacred rules, I believe the same injunctions would appear repeatedly. What are those common threads? I’ve boiled them down to six principles for family business relationships. These apply to all family members working in a business and also to key non-family leaders working alongside family members:
Principle 1: Stay connected
To become strong and endure, relationships require time. The healthiest business-owning families I know routinely make time for family relationships—one-on-one interactions that are not focused on projects and tasks. Regular one-on-one interactions offer enduring benefits. At the same time, the intimacy of “me getting to know you and you getting to know me” also triggers discomfort.
That’s because it’s not easy to communicate genuinely about myself: what’s really going on in my life, what I’m losing sleep over, where I want to be 10 years from today, what’s appealing to me about the direction of the business, etc. As one sibling put it: “If we’re not talking about the business, what do we have to talk about?”
At times, family relationships get tested by frustrations, hurtful words or perceptions of inequality. Less mature family members respond to these challenges by avoiding uncomfortable topics or, worse, completely cutting off contact. As family relationships degenerate, the business pays the price.
More mature family members recognize that staying connected to one another provides the emotional lubrication that keeps both family and business running smoothly.
Principle 2: Avoid indirect messaging
Imagine this: Nate and Joanie, two siblings in a family business, are stuck in a communication pattern that is so automatic, they don’t even know they’re doing it. Here’s how it works: Nate has a problem with Joanie, but doesn’t talk to Joanie about it. Instead, Nate mentions it to their father, Frank, who often lectures Nate about what to do to solve the problem.
That kind of indirectness imperils clarity and connection among family members; Frank’s lectures are also part of the problem.
More mature families operate straightforwardly: “If I have a problem with you for any reason, I’m going to talk about it with you, not with others. Whenever possible, I will do that face-to-face, not through email, texting or phone.”
Principle 3: Question your motives
Let’s say a founder wants her children to come into the business. What’s driving that desire? Is it the prospect of opportunity for the children? The founder’s need to stay close to her kids? Over-protection? Ego?
What influences a child to enter the family business? Is it the path of least resistance? A way to gain parental approval? Does the child’s talent warrant the invitation?
Why we do what we do matters, because motives powerfully influence behavior. Emotional contamination in family relationships can be reduced by discussing motives. Such discussion ignites deeper reflection that often produces air-clearing enlightenment.
On the contrary, motives hidden under the table cannot be clearly understood, scrutinized or adjusted.
Principle 4: Discuss entitlement
Entitlement among family members can operate like a small tumor that grows over time and eventually weakens or destroys the business. Family member understandings of rights and privileges vary. It’s an uneasy topic to address, but facing uncomfortable issues is what mature leadership is all about.
If you lead a family business, ask yourself these questions related to entitlement:
Should family members be permitted to go straight from college into the family business without having to “pay their dues” for a few years in another work setting?
Should family members start at the bottom and work their way up?
Should family members earn more than non-family members, for similar contributions?
Who will hold family members accountable? If they fail to perform, can they be put on probation or terminated? Are family members “special?”
Should family members automatically become owners? Is ownership earned or given? What does it take for a family member to lead the business? Are the qualifications clearly stated to all family members?
How thoroughly have the above questions been addressed?
Principle 5: Find a pressure release valve
When a problem arises among or between family members, other family members are often the first to hear about it. They’re also least likely to be helpful. That’s because the intensity of close family relationships makes it unlikely for any family member to maintain a neutral, less anxious presence.
More often, family members get caught in emotional traps such as side-taking and feeling overly responsible for outcomes.
In emotionally disruptive situations, a neutral, non-family listener can be invaluable. Optimally, the outsider helps reduce the intensity that fuels discord, and stimulates clear thinking about what is best for the family and for the business.
The biggest stumbling block might be the excessive privacy that prevents some family leaders from reaching out for help.
Principle 6: Plan for future leadership
Many would consider it irresponsible to expose a business to the void resulting from a leader’s sudden death or disability. Yet most family business heads drag their feet into succession planning. Why the avoidance?
The reason often comes down to fear: Fear of letting go of a treasured life’s work, fear of moving on into an uncertain future, fear that the next generation will fail, fear that “without my work, will I be able to maintain enthusiasm for my life?” Perhaps the often unspoken fear of mortality lurks underneath all other fears.
No one can answer for certain when to hold on and when to let go. That’s why discussions have to take place. Sometimes, a family can manage those discussions without a trusted facilitator, sometimes not. Either way, the slippery fish of succession must be flopped on the table for careful dissection.
I’ve tried to break down six important principles for family business leaders to consider. If you have others, I would like to hear from you.
John Engels is an international leadership thought leader, speaker and writer. He is president of Leadership Coaching Inc., a science-based consulting firm serving top-level leaders and partners in family businesses and professional firms. He can be reached at [email protected].
8/28/15 (c) 2015 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email [email protected].