The component to family businesses that make them unique from other businesses is the family. Solving family business problems without understanding the family dynamic is akin to a placing a bandage on a broken leg – it simply is not sufficient.
Family businesses possess a complexity that comes with fulfilling dual roles. In business, as in family, those roles require clarity, consistency and flexibility in order to be effective. If the family structure is vague, inconsistent, or too rigid, obstacles abound. In times of transition, these obstacles can seem insurmountable, rather than as challenges to be navigated.
Creating an enduring business structure requires the family to be flexible enough to adapt to various changes they will undoubtedly encounter during its lifecycle. Roles and rules will inevitably shift, and the family structure that thrives will be the one able to adapt to meet the needs of the family.
When a family, whether at home or in business, is stuck in an ingrained dynamic that undermines its ability to plan or prepare for change, the effect can be paralyzing. The need to shift this dynamic, which may call for difficult and potentially conflictual conversations, is absolute. If there is an overt or underlying family value that suggests difficult conversations are off limits, progress on changing this dynamic will be thwarted.
In family-owned businesses, the need to adapt is felt in specific, but unavoidable, situations. For example, families in business together may struggle when the mission or the purpose of the business is either poorly defined, or is no longer relevant, and the family is required to create underlying principles to guide the family to meet the goals of the business. Similarly, succession planning can become a highly conflictual and paralyzing event for a family that does not navigate change well.
If there is an overt or underlying family value that suggests difficult conversations are off limits, progress on changing this dynamic will be thwarted.
When family functioning is less than optimal, leadership planning, conflict resolution and decision-making are often compromised. Eventually, a previously thriving company can experience normative, predictable changes. These changes can lead to the downfall of the company. When anticipated changes are implemented, an organizational shift will occur. In other words, adaptation to various circumstances becomes normal.
[Editor’s Note: For more on this subject, please see “Sensitive Family Business May Bring Up Fur Balls”]
Families are often ill-equipped to make these shifts on their own. This could be because the family has already tried everything they know in order to solve the problem, or has run out of effective ideas.. Regardless of the dynamic that locks the interactional dysfunction in place, the mechanism for creating change is to enlist an outside resource. Whether it is a trusted advisor, consultant, or therapist, the family dynamics, some of which are generations old, are no longer working, and new ways of interacting are required.
When new patterns are implemented in business, it means a new structure has been created that allows the family to navigate various challenges with more ease. This change could include redefining roles, removing power struggles and disruptive alliances, or creating clear and congruent communication patterns. It may also contain a plan that is enduring, and supports decision-making processes for current and future generations. Essentially, the family learns how to problem solve, adapt, grow, and succeed, both around the dinner table, and at the conference table.
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Carrie Rosenbloom is a licensed marriage and family therapist, and attorney mediator in Ann Arbor, Michigan. She specializes in helping individuals and families navigate the complexities of divorce. Carrie also works with family businesses, helping them manage transitions, create succession plans, resolve conflict, and integrate a cohesive culture throughout family owned businesses. More information can…
The Importance of a Family Charter in Family-Controlled Businesses
Business Transition and Exit Planning: Welcome to the Jungle!
How to Pursue Your Family Purpose (And Why You Should)
Family Governance is Not Business Governance
The Importance of Succession Planning for a Thriving Family Business
Parenting Past Fear to Help Set Children Up for Success
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