Improving the Dynamic in a Family Owned Business

Family and business can be like oil and water – The two dynamics are often complete opposites.

Family decisions can be completely emotional – Business decisions can be unemotional.

Being part of a family is automatic from birth and continues for life.

Being employed in a business is earned and may be for short periods.

You can get fired from a business, but you can’t get fired from a family!

Here are some tips to help deal with the challenges that are unique to family businesses.

1) Recognize emotions when they are high, but then transition to ‘business’

I have facilitated many meetings between family members who own a small business. The participants sometimes include the spouses or the siblings that are not part of the business. Everyone brings their opinions and issues and often everyone is emotionally charged. If you try to ignore the emotions, you end up with conflict and fights. By first acknowledging that the emotions that exist, the participants feel understood. The next step is to request that all parties can transition to a business meeting and discuss the issues in a business-like manner.

2) Meetings should include only the family members actively engaged in the business

When there are issues that require input from family members, there can be in-laws or siblings giving input informally. Let’s say for example there is a brother in the business but his wife is not, but she is the one that ‘wears the pants’! In special circumstances it is easier to invite the spouse to address the issues directly than have the husband suffer the consequences of delivering the message inaccurately.  However, most times it is prudent to keep the relatives who are not directly employed by the business completely out of the meetings. 

3) Ask a non-family member to facilitate important meetings

If two brothers meet on their own often they act like brothers in the meeting. The family dynamic of the relationship overrides the business relationship. If a husband and wife own a business and communicate on their own, they default to their personal communication patterns. However, when I show up at the table as an independent business advisor and non-family member, the meeting becomes a business meeting and people adjust their communication styles accordingly. Sometimes I don’t say a word – I just sit in so the family members can have a business-like meeting.

4) Use business-like criteria for decision making

The worst family business decisions happen when one family member gets their way because the last time another family member picked the decision. This is not good business decision making.  An agreed-upon criteria for evaluating options in a business-like manner will produce better decisions. The simple method of listing the pros and cons on a single sheet of paper works well.

5) Consider having one boss

In a family, everyone gets their say and typically share equal votes. This doesn’t work in business. A family business can easily be paralyzed by indecision. If you pick one boss and agree that that person makes the final decisions then the business can function better. It certainly doesn’t hurt if the boss has a collaborative management style. It is often better to choose one option and take action than spend forever deciding which option is better.  A good example would be picking the paint colour for the business bathroom.  Profitable businesses make these small decisions quickly. This might seem silly, but if decision making isn’t business-like and efficient, the family and the business suffers.

Alternatively, everybody wins when the boss can take charge and motivate the family and non-family team members to push in the same direction.

If you are considering utilizing a facilitator, it would be a pleasure to discuss being of service to your family business. I consider the responsibility quite important and truly look forward to the opportunity. Please feel free to email me at paul@thebusinesstherapist.com



Author: Paul Foster
Paul's life’s purpose is to bring more cash, freedom and happiness to independent business owners. Paul wants to learn about your toughest business challenges and frustrations so he can help you tackle them.

Leave a Reply