The importance of the family unit
One of the greatest resources of a family business is the family itself. In fact, the success and continuity of the family business is dependent upon having a strong family in addition to a strong business.
A group of individuals who share the same vision and values provides a tremendous source of power and vigour with which to build a strong and successful business. Such family businesses have the advantage of hiring managers and employees who are already compatible, have the same beliefs and attitudes, and are strongly committed to the future of the business. A family where members share an interest in each other and in the direction of the business is one that enjoys a healthy familybusiness.
But be aware that it is a two-way street. A family business that does not have a united family unit behind it will falter. Family baggage can be unconsciously carried over into the management side of the business. Warring siblings, bickering spouses or uninterested, ill-prepared or incompetent heirs can eventually sink the business!
Research shows that strong family 'family businesses' perform much better than non-family businesses. Employees, suppliers, customers, bankers, and investors have much more faith in the power and synergy that propel a 'connected' family business. The involvement of family in a family business is obviously very critical to its long-term success.
A family business is described as an entity where two or more people from the same family work together in a business that at least one of them owns. Considering that approximately half of the GDP and over half of our jobs are generated by family businesses, they are certainly very important to the Canadian and North American economies. In addition, 70% of all new jobs created each year can be attributed to family businesses. Indeed, we should respect the importance and power of the family business entity.
For the most part, these businesses begin as a sole proprietorship run by the founder who is also the owner and manager. If the business transitions to the next generation it may well be a partnership of siblings. John Ward, Clinical Professor of Family Enterprises at the Kellogg Graduate School of Management, calls the third generation of a family business the 'Confederation of Cousins.' As the dynasty grows, so does the complexity of the family business.
Understanding Family Dynamics
A family that understands their own unique culture and the role each family member instinctively plays, is in a much stronger position to manage differences and take advantage of the opportunities afforded by the family business.
In many cultures it would never occur to the parents to discuss their wealth or personal health issues with their own children. In others, the father automatically assigns the role of successor to the eldest son, regardless of whether or not that son has dreams and aspirations of his own. That same father will likely not consider his daughter a suitable successor for the family business. She should devote the majority of her time to raising her family.
Often siblings will react negatively to the ideas and suggestions made by their brother or sister because of a childhood incident that was never resolved. When there is conflict between a father and son as to how the business should be managed, the mother is often caught in the middle and has to take on the role of mediator.
If family members fail to recognize that they unconsciously adopt family patterns such as these, and that the family history has a profound impact on their attitude and actions, they will not be aware of the interests and needs of the rest of the family. Perception becomes reality.
When the needs of individuals are suppressed, negative reactions are triggered and it is difficult for anyone to effectively deal with their emotions. This situation can be very damaging to the family unit and the family business. The result is major frustration, which can in turn lead to a total family breakdown.
However, when people are heard, are given the facts and allowed to share their views and interests, differences can be understood and conflict can be managed. They can work towards a common goal.
Just as you would not hesitate to implement management systems to help you understand why your business is not reaching its goals, so should you set up structures that will allow the family members a non-threatening forum to discuss their own needs and understand the needs of others. The result will be a family that is less threatened by conflict and can embrace change to take advantage of opportunities.
The Power of the Family
While recognizing that family issues must be dealt with separately from business issues, it is a fact that the goals for the business are interwined with the personal goals of the key family members.
Think about some of the other family businesses you know. Have the values of the family or the individuals shaped the business or contributed to its image? Do all family members share the same principles? Are they all committed to the success of the company? How has the family culture impacted the business?
One of the greatest resources for a family business is the family itself. A group of individuals who share the same values and vision supply a tremendous source of power and vigour with which to build a strong and successful business.
But be aware that it's a two-way street. Whether good or bad, the family value system will have an impact on the business. Family baggage is often unconsciously carried over to the management side of the business.
So creating a strong legacy is vital to the ongoing success of the business. If the family members can experience a sharing of information and interests while benefiting from the support of other members of the family, they will return the respect and value the legacy of which they are a part. They will be strong stewards of the family business.
As the legacy builds, it in turn provides for continued personal growth and development of all family members and greater strength for the family unit to continue the family heritage through subsequent generations.
And how do you tap into this power? By creating structures for the family to come together, to share their goals and aspirations, to get facts on the table and build on common interests and goals. The SuccessCare ® Program's experienced facilitators can help you to design and implement such structures.
When you concentrate on building that strong, loyal family unit that is focused on shared goals, a family that can work together, you will open the doors to the real power of the "family" business!