Family ties: when the family business divides

Conflicts in family businesses are better avoided if roles are clearly defined and formal lines of communication are set down, as in any other well-organised small to medium enterprise
Conflicts in family businesses are better avoided if roles are clearly defined and formal lines of communication are set down, as in any other well-organised small to medium enterprise

It’s normal for families to fight but when there’s a business at stake the result can be a lot more damaging

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Advisor

7 January 2009 | 0

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THE PROBLEM

I’m experiencing a bit of a dilemma at the moment and I really don’t know how to deal with it. I have a stake in a family business, along with my two brothers who were also brought into the company by our father. It was originally the father’s business but he had to step down as chief executive, becoming a minority shareholder and bringing in my brothers and myself afterwards to run it. Sadly, my father passed away last year and his remaining shares were divided between us and our mother, who has no role in the company.

For some time now I felt that my ambitions or ideas for the company have been hindered and it’s gone as far as it’s going to at this point. I’ve also lost interest a bit as well I suppose. Seeing as the others don’t want to try to move forward or sell up completely, I can’t see any better option for me at this point than to sell my share of the company. This however, I’ve been told, will “tear the family apart” and as it is one of my brothers has stopped speaking to me. I want to make this decision based on business not family but there seems to be no way of avoiding the mess. Can you give me any advice?

THE ADVICE

How much do you believe the words "I want to make this decision based on business not family"? One of the key questions that coaches ask is "What do you want?" Perhaps you do want to make your decision based on business but your letter implies the opposite. Family businesses always have a level of emotional involvement in them. I will deal with this later. Firstly, lets look at what appears to be one of the main issues you are dealing with; communication.

If your business was not a family business do you think you would be facing such difficulties? In a fully-functioning small to medium-sized business, the key decision-makers (management) would make decisions based on their role in the business. In an ideal world, these decisions would be communicated effectively across all levels. Unfortunately, from my coaching experience, there is nearly always a break-down in communication in family businesses. This breakdown is as a result of one or more of the following reasons;

  • No agreed formal roles being in place
  • No agreed lines of communication
  • Information being held back (for various reasons)
  • Lack of understanding of the other persons roles
  • Parental involvement (the good child syndrome)
  • Emotional involvement

Communicate clearly and know your role

A very effective way of resolving these issues is to start by assigning the roles of the various family members. Then establish the roles of non-family members if they exist in the business. Finally agree the formal lines of communication. Many family businesses are established as a company. The directors have various duties and responsibilities under company law. If there has been a complete break-down in communication, this may be the best place to start; perhaps by getting professional advice. Look at the reasons each of your siblings are in the business; what strengths each of you have and where you see the business in the six months, 12 months and five years. 

You mention that the "others" don’t want to move forward. It is very difficult to move forward in a business situation if there is no common agreed goal and vision for the business. If you cannot communicate as a group, I would suggest you bring in an outside impartial person to assist with the basics of communication until you and the "others" can agree the common ground. note that you are not talking to one of your siblings at this stage. This form of total "shut-down" is more common in family businesses as the family unit tolerates this behaviour. A professional business will not; even if it causes friction.
 
It’s important to note that the common ground you seek maybe that you exit the business, but even the exit strategy will need to be agreed. Again, this is dependent on the level of your emotional involvement in the business. Now you need to establish why you are in the business in the first place. From my reading of the scenario, you ended up in the family business not by choice but more as a natural progression and this may be the basis of your unease and "lack of interest".

Investing in the business

I said I would come back to the concept of "emotional investment" or "investment". Investment refers to the extent to which we put our happiness, self-worth and well-being on the line in our pursuit of an outcome; business or otherwise. 

With all emotional involvement comes a level of mental and physical involvement. "Involvement" is the extent to which we put our creative and physical energies into the creation of that outcome; again business or otherwise.

According to Michael Neill, US Success Coach, there are four ways in which the elements of emotional investment and physical involvement can combine in relation to any goal, problem or circumstance you can imagine in the world. Take a look at your position in the family business under each of these headings (1 to 4 below) and see where you fit. It might also be useful to get your grasp on which of the combinations most match your siblings (in your view).

Low Investment/Low Involvement

Low investment/low involvement is when you do not particularly care (or even know) about what happens and you are not doing anything to influence the outcome in any way. For example, someone who doesn’t care about sport will be unaffected by the outcome of a sporting match. Someone who has no interest in a relationship, job or world situation will not only not care how those things are going, they will do little or nothing to attempt to influence how things go in the future.

High Investment/Low Involvement

You care too much and do too little. While in some situations this is necessitated by circumstance the lack of action is more often due to learned helplessness and emotional paralysis. It seems as though there is so much to be done that you wind up feeling overwhelmed and doing nothing.

High Investment/High Involvement

High-flying entrepreneurs tend to pursue their goals from a high investment/high involvement point of view. They work long hours, take massive action, do whatever it takes, and then ride the emotional rollercoaster up through the thrill of victory and down into the agony of defeat. This can be an effective approach in the short-term; it often leads to the burn-out/drop-out mentality that stops so many people from actually reaching their goals, and in many people an actual fear of setting goals.

Low Investment/High Involvement

The two best ways I know to lower your level of emotional investment in an outcome are: (a) get as clear as you can about what is within your control and what is not, and (b) really see that you will be okay regardless of what happens and how things turn out; that your ultimate happiness and well-being is not at stake.

I will not make any assumptions as to what category you currently fall under from an emotional investment/involvement point of view, but I expect it is very obvious. Before you try to meet with your other family members, I would suggest that you establish which category you fall under. Write down the reasons you believe you fall under this category. Look at each of the other categories to see if you could fit under any other category.

What would improve, what do you need to change in order to move to a category that works for you and perhaps removes the emotional involvement and responsibility you are faced with in the business. You will be surprised with what you find out. Best of luck.

 

 

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