While family-owned businesses are different, they aren’t all unique. Most owners we’ve come across count at least a few of the following amongst their own family-owned business issues:
-
- Sibling communication, engagement and influence on business decisions
- Parental/patriarch interference and differing cultural/gender values & behaviour
- “Fairness” in family business decisions including ownership, succession and inheritance
- Personal vs. business requirements, including dividends vs. business reinvestment
- Membership/selection processes for governance or family advisory boards
- The role of outside advisors and non-family executives in the business
Common Challenges
And even in the most successful of family-owned enterprises can relate to these two universal areas of concern:
- Alignment of the family’s investments (both human and financial capital), with the business’ strategy for value creation, and
- Planning for eventual ownership and leadership transitions.
When family-owned businesses haven’t planned together for these two eventualities, any minor business or family issue has the potential to become a major family conflict. Planning together balances the tension between the family’s expectations for dividends and careers, and the business’ demands for funding and talent.
Magic for Family-Owned Businesses
Now imagine a business family that develops a shared view of the family’s values, which then informs a clear business vision and strategic plan. Picture this same family then documenting simple agreements and plans for future generations that anticipate the common family concerns noted above. This is where an experienced, emotionally-detached executive from the outside can really help.
It takes time and effort (what doesn’t?) but the outcome can be sustainable “family business magic”, in which the future stewards of the family business legacy can rely on established procedures and consistency – not personalities and power – to become the drivers of all their family business interactions!
This article was published more than 1 year ago. Some information may no longer be current.