The Problems of “Family” in Running a Family Business





Running a family business is not like running a business where everyone (owners, employees, vendors, etc.) are almost always unrelated. In a family business, you are not only dealing with more emotion than a typical business, you are also bringing in past history and the burden of the sense of obligation. Don’t let the fact that your brother spit in your Pepsi when you were five years old dictate how you get along with him in running the business thirty years later.

I’ve worked with large family businesses that are now in their second and third generations to keep them functioning and successful despite all of the emotions that are involved.  For example, I worked with a company to implement an internal dispute resolution system to resolve disagreements among the founder’s three children because they couldn’t work well together.  Most of the reason they couldn’t cooperate was because one child thought he was entitled to everything and another child thought she wasn’t rewarded or recognized for her efforts.  Due to this antagonistic relationship, business decisions weren’t being made timely or decisively which impacted the company’s bottom line and negatively impacted employee performance and morale.  So, we put this dispute resolution system in place to allow the founder’s children openly discuss their views and fix the underlying problems without having their dirty laundry aired in front of the public.  Its been over ten years since I last work with this company so I don’t know whether they are still using this system but I believe that the fact they were willing to try to work together to compromise on various aspects of the business and family was a huge step for them and the company.

The following article highlights other items to focus on when the “family” part of the family business comes into play.   But if you or a business you know is struggling with resolving the issues associated with running a family business, please take the time to schedule an appointment with me to go over your options.