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Sunday, 8 September 2013

Is a Family Business a Curse or a Blessing? It’s Up to the Family to Decide!

One of the recurring issues which all Vistage chairs encounter is that of the family business which can be either a blessing or a curse. 

Over the years I have experienced many examples of the family business and usually with the traumas which seem to be a daily part of life for those involved.  The word “dysfunctional” often comes to mind. 

It can be a father bringing sons and/or daughters into the business, brothers in business together, sons who have been told to employ siblings, a parent who just will not let go and pas responsibility to the next generation, even worse the patent to passes on the gauntlet and then continues to interfere; the list goes on and on as do the problems. 

Under normal circumstances if someone isn’t performing or worse, is disruptive, it is relatively simple to take the necessary action even if the process is drawn out through the exigencies of employment legislation. 

It is not so simple of the miscreant is family.  Although theoretically the same legislation applies to everyone, in the case of a family member emotion and loyalty, even though misplaced, tends to get in the way. 

This is not to say that every family business has severe problems but I have heard it said that “as soon as we get through the door at the company, the business takes over and the family takes second place”.  Would that it were so simple.   

I have had a member of my Vistage group who was fifth generation in the business and looked upon himself, rightly, as the custodian for the next generation.  However, his father was reluctant to give up the position of CEO until, as he said, “the boy was ready to take over”.  He actually meant "when I am ready to let go".

In another case, the father was effectively the 100% shareholder and brought his two sons into the business in senior positions.  He had decided, sensibly, that both of them should have a couple of years working outside the business before joining and that gave them both a taste of how other companies can be run. 

The problem was that he constantly referred to them as “the kids” which as they were both directors of the business was not exactly complimentary.  

On the other hand, I have known cases where the owner has brought in siblings, found that they were unable or unwilling to comply with the needs of the business and the requirements of the leader, so the bullet was bitten and they went.  I can’t imagine what the atmosphere at the next family Christmas dinner was like. 

Another of my CEO members with two sons made it clear from the outset that he was not having them in the business at any price.  He would be happy to give them any assistance that they might need and indeed was prepared to help them go into business on their own but come into his business?  No way! 

All of this might seem somewhat negative and there are many situations where the family business works very effectively.  I would suggest that it takes a great deal of care and generosity to make it work. 

As long as everyone involved as a family member in a business accepts and understands that the needs of the business and the people in it are paramount then all can be well and peace will reign. 

There are plenty of examples of very successful family businesses and it is a wonderful thing to behold when they work well.  It does take care and understanding on the part of everyone concerned but it is well worth the effort.
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