Family-owned businesses are intrinsically tied to the family. The relationships families have at home are impossible to fully separate from the business. That’s just life. But when a family member exits the family business, things can get a bit tricky. Leaving the family business often feels like leaving the family, especially when the family member is essentially forced out—or forces themselves out. And it happens more than you think. Conflicts (generational, familial or otherwise) are bound to happen because in a family business, sometimes it just doesn’t work out. But that doesn’t mean there needs to be strife in the family outside of the business. You just have to handle it correctly.
There are a few common scenarios that signal an exit for a family member that I see over and over in my work as a family business consultant. In the following examples, I’ll cite a parent-child dynamic, but the scenarios can apply to most family members. They are:
They’re not cut out for the job
While a parent may dream of passing down the business to their child, the child’s skillset is not always up to the task. Not everyone is cut out for the business, and if your child cannot realistically handle the responsibilities of the job, it won’t be good for the business or the family. In many of these cases, the child knows they’re not up to it, but doesn’t want to let their parents down. In other, more difficult cases, the child wants to take over the business but simply doesn’t have the chops.
They don’t like the business
A child may not have the same passion for the family business as the parent who built it. They may find the business boring and unfulfilling—more of a duty than anything else. They know it, the parent knows it. A split is inevitable.
They don’t like working with their parents
Working with (and for) your parents can be tough. Many clients have told me that they feel “trapped” in the business, but they don’t want to do anything to risk their relationship with their parents.
Parents don’t like working with the kids
The family dynamic goes both ways. Often, parents who dreamed of working with their children realize that they really don’t like working with them at all. In many cases, I see parents who assume that their children would have the same work ethic and passion, but it doesn’t always happen that way.
The above scenarios are far from the only ones that cause a split from the family business, but regardless of what caused the fallout, the inevitable must be dealt with so that everyone walks away happy and satisfied with the outcome, family bond intact. Here’s how to land the plane safely—
Communicate…
In most of the examples above, you can see how clear and consistent communication might have mitigated the emotional issues at play. But clear and consistent communication is only possible if you get the communication style right. Every family’s style is different, so there’s no specific prescription. But there are a few ground rules. You must draw a solid line between how you communicate in the business and how you communicate at home. That line is too often blurred. An easy temperature check is, “would I say this to a non-family employee?” If the answer is no, don’t say it to your family member. You must also deploy emotional intelligence in your communication—try to put yourself in the other person’s shoes and listen. Communication skills can be learned, and they’re necessary for a business to be successful.
and have a plan…
If it starts to seem like there may be an issue down the road, start thinking about how the business and the family will handle it now. Remember, regardless of what happens with the business, you’ll want to ensure that you keep the family together. An exit from the family business can be painful, but if you plan for it, talk about it, and consider the best outcome for everyone involved, it can go a lot smoother than you might think.
…That’s it.
