At AdviCoach, our business coaches spend a good deal of time working with family-owned businesses. As a result, we are upfront and personal with the daily struggles experienced by family enterprises, especially those where a new family member is stepping up or taking over the business.
When people take over the family business, it’s not always smooth sailing. Sometimes, they’re thrown into the new role suddenly, unexpectedly, or prematurely. They may be unprepared and feel overwhelmed at the proposition. They may be forced to make a snap decision about stepping into their predecessor’s shoes, and sometimes with much trepidation.
When people take over family businesses, it’s not uncommon for them to already be dealing with complex family issues – ones that were in motion for years prior to the business owner’s sudden exit. The family business is now in a precarious situation, and the family’s future hinges on the competence of the successor, who’s often a son, daughter, or sibling. What we’ve noticed is that family baggage can be a burden to the business, and unresolved conflicts in the family can force businesses down a certain path.
Unfortunately, unresolved family conflicts can and do affect the course of family-owned businesses. For example, if something sudden or unexpected were to happen to the business leader, such as a terminal illness, a heart attack, or a fatal accident, forcing other family members to fill his or her shoes, old, unresolved family conflicts can affect the business moving forward, and not necessarily for the best.
While this situation is not ideal, it’s common among family businesses and something can be done about it. If the family can handle the unresolved conflict, it allows them to move forward and make strategic decisions about the business and what’s in the family’s best interests, rather than having the future of the business dictated by old grudges.
Which Problems Plague Family Businesses?
- Family Conflicts: Not all families agree on everything – that is normal. If a family has a conflict, they don’t necessarily need to agree, but they do need to agree to move forward for the sake of the family and the business. Families need to make sound business decisions that are not dictated by emotions or grudges.
- Poor Planning: Like estate planning, things can get hairy when families fail to plan for the owner’s disability or death. When a family fails to plan, the business can shift in a less than ideal direction, which can impact the business’s sustainability and success, not to mention the family legacy!
- Undefined Expectations: When a business owner intends to hand their business to a child or other family member, there needs to be a mutual understanding about the owner’s expectations. When the owner’s succession goals are undefined or vague, or when the owner refuses to share power, it can lead to resentment which can harm the family and the business.
- Sense of Entitlement: We often see this when Mom and Dad give a child power in the company but they’ve done little, if anything to earn it. When parents fail to have their children work in the trenches alongside the employees, the kids can become poor leaders with unrealistic expectations. The employees can resent the kids and they can quit because they no longer respect their superiors. When the time comes for the kids to take over, they are incapable and they put the business at risk.
- Poorly Defined Responsibilities: When the responsibilities in a company are poorly-defined, it will lead to extra work, lost productivity, and disorganization. In all businesses, including family businesses, people need to have a common understanding of who does what. When roles and responsibilities are poorly-defined, they will contribute to mismanaged expectations and chaos.
- Poor Communication: Because families are more comfortable with each other, they can let poor communication get in the way of running their business. If family members cannot communicate effectively with each other; for example, if they blow up, give one another the silent treatment, or storm away from a conversation, the business will not move forward. To keep this from happening, family members need to treat each other with dignity and respect and walk each other through their individual perspectives until a resolution is reached.
In our experience, conflicts in family businesses are often the result of poor communication. So, if you are running a family business and you are presently experiencing a shift that’s questionable, our advice is to ask yourself, “What is behind this shift? Is it the market, or could it be unresolved family conflicts?”
Starting a business is hard and starting with family dynamics involved is more difficult, but with the help of a business coach, it can be a lot easier. At AdviCoach, we proudly help family and non-family businesses achieve their goals so they can succeed. To see if a coach is right for you, we invite you to contact us today!