Resolving Family Business Problems—Part 1

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This topic is so vast that I’ve decided to split it into two blogs—this one focuses on the issues that face family businesses and a second will provide some solutions to those challenges.

While some people can’t fathom having their mom or dad as their boss, or working side-by-side with a sibling, others really enjoy building a successful business as a family. In fact, loyalty and trust are what make family businesses distinct and thriving in today’s market. However, as you might suspect, family businesses also face unique challenges that are absent when colleagues and management aren’t related.

The following Top 10 list might not make you chuckle like one created by David Letterman, but it’s worth reviewing if you work in a family business or are considering joining one. I believe knowledge gives you power so, here are the top 10 reasons that family businesses get derailed:

  • Fear of conflict
  • Avoidance behavior
  • Undefined/non-discussed expectations
  • Unmet expectations
  • Sense of entitlement
  • Differences in business philosophy
  • Lack of predictability and consistency
  • Lack of accountability
  • Different rules for family and non-family employees
  • Discrepancy in work values

As you can imagine, it’s fairly easy to run into any number of these pitfalls—and the result is going to be dysfunction. That causes chaos at the office that often spills over into family members’ personal lives, since the boundary between time on and off the clock can be a little hazy.

What causes the problems noted above? Communication breakdowns—such as not talking specifically about critical employment issues—are the biggest culprit. Oftentimes, too many assumptions are made or parents expect their kids to “trust” that everything will be taken care of—but nobody discusses the hard stuff about money or expectations.    This lack of direct, honest communication can result in:

  • Difficulty respecting boundaries
  • Power struggles
  • Hidden agendas
  • Compensation issues
  • Entry and promotion issues
  • Succession planning challenges
  • Ownership challenges/who has power
  • Communication issues/who’s included and excluded

These concerns can be addressed as simply as adult children not calling their parents/bosses mom and dad on the job to verbally create needed boundaries, or they may be as deep-seated as trying to stop a sibling from having anything to do with the future of the business. The important thing is to deal with things upfront—talk about “the elephant in the living room”—so both simple and complex problems can be dealt with in a proactive way. Regardless of the issue, the behaviors or feelings that lead to it are usually the same, and can include:

  • Feeling patronized or not taken seriously
  • Needing love and recognition
  • Lack of trust
  • Lack of respect
  • Favoritism
  • Fairness issues

Is your head spinning yet? Are you wondering how any family business can survive in the face of all these potential issues? Good news! There are a number of strategies that can be used to overcome these challenges…and I’ll cover them in my next blog.


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