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I have always believed that family has a built in advantage in business. From my perspective the natural behavior of family provides both governance and teamwork benefits. Unfortunately some families leverage their natural behaviors better than others. The wide variation of performance among family businesses brings up the question, “What makes some family businesses better than others?”
Before we answer the above question, let’s discuss the definition of family. From my experience, I do not believe that a shared gene pool adequately defines family. Throughout my career I have continuously observed, what I define as “Blood Related Business Groups.” Their only common bond is their shared gene pool, as they are not the least bit congenial and have the business compatibility of dogs and cats. As a result of these types of groups, I believe family, with respect to business, should be defined in terms of behavior not genes. In support of this belief, I contend that the definition of a family in business is two or more people working together for reasons other than money. If money is the only bond holding a collaborative group together, the glue is very thin and highly combustible. I would not be placing any bets that long term goals will be achieved in the hot world of contemporary business.
So, what makes some family businesses better than others? Fundamentally, it is the two spiritual feelings of respect and trust. A productive family business exhibits genuine family behavior that is rooted in trust and respect for each other. With this type of behavior being the foundation of family interactions, the result is a safe, affirming, productive environment. “Walton” fans would naturally ask “where is the love in this family cocktail”? I believe that love is a frequent companion of families and a complement to families in business, but not a critical factor. In fact, I commonly work with family members who do not like each other but work together successfully because of respect and trust.
With this in mind, how can family business’ achieve higher levels of harmony and cure “Blood Related Business Groups” of the squabbling, rivalry, rebellion, and backbiting. The first step is to understand the foundation of Respect and Trusts.
- Family “RESPECT” comes from reaffirmations of the worthiness of parents, siblings, and people in general.
- TRUST comes from the achievement of confidence that there is comforting consistency and predictability in the valued behavior and attitudes of those we respect.
Although some people may naturally be respectful and trusting, my experience affirms that respect and trust, are reinforced internally through experiences within the family and externally through life experiences. Unfortunately, some personalities are more prone to disrespect and distrust, even if it’s not intended, ultimately infecting the family business. This unfortunate behavior can be the byproduct of psychological tendencies and learned from experiences from the big bad world, not within the family
So how do we change the dynamic of disrespect and distrust that handicaps so many “Blood Related Business Groups” that want to become productive family businesses?
1. Determine if there are any family terrorists.
These incurable malcontents can be easily identified as they are not motivated to improve their perspective, but motivated to reconcile anger and resentment through various means of pay-back. As many of my clients have so bravely demonstrated, families can exist with a terrorist but the collateral damage becomes progressively more difficult.
Unfortunately, removing or reconciling a family terrorist is no easy task as they generally view themselves as victims. Any pressure directed at them generally feeds their goal of creating chaos. Furthermore, it is near impossible for a member of a family to reconcile their own family’s disease. Therefore, involvement of an independent party to provide an objective assessment and offer viable alternative courses of action gives the best shot at identifying and removing a family terrorist.
2. Establish a leadership role within the family.
Leadership is a critical component to building family harmony and unity and most important, avoiding or addressing family terrorists. The following are 5 key roles or positions the leader must take:
- Earn the trust and respect of rational family members
- Remove the irrational (terrorists) and then dictate that respect and trust to non negotiable, core values.
- Serve as a role model and be vulnerable to close inspection of actions, attitudes and motives
- Apply that ever so difficult accountability to anyone challenging the core values
- Constantly dictate that there is no opportunity for a family member to pursue a role in the family’s business just for the money.
In search of a turnaround from a “Blood Related Business Group” to a family business, a leader must recognize that regaining respect and trust requires a major change of behaviors and attitudes, which will take patience. Families don’t learn to distrust overnight so there is no valid presumption that distrust can be eradicated overnight.
Loyd H. Rawls, President/CEO of The Rawls Group, has specialized in succession planning for closely-held, family owned businesses since 1973. Well respected in his field, Mr. Rawls is a highly requested speaker and has published numerous articles and publications on this subject such as “Seeking Succession: How to Continue the Family Business Legacy” and “The Succession Bridge: Key Manager Succession Alternatives for Family Owned Businesses.” For more information visit http://www.seekingsuccession.com.
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