In life, you spend more time with your family or working than doing anything else. When you combine these two areas of your life into one and create a family business, the commitment required to managing both is immense and you often don’t know where family ends and business begins. To sustain a family business for generations to come requires that family members be “all in” in the work they need to do to effectively run the company as well as manage the family dynamics that can be at play.
There are a number of challenges and opportunities family businesses face when effecting change in areas of the lifecycle of a family business and, in particular, the transition from one generation to the next. The intention of creating meaningful change in different areas of the family business, can be both ultimately unsuccessful due to a lack of commitment or alignment on the part of one or multiple family members. This failure to commit to the work can manifest in different forms, ranging from false promises on the willingness to change to an inability to align with other family members on the direction in which to transition the business.
Family business leaders should not ultimately allow emotions to dictate their actions. The breakdown that could occur when a family member says they’re ready to change but truly aren’t is immeasurable. Not only can it impact the transition of leadership for the business, but it also puts tremendous strain on the family as a whole.
The struggle in the transition of ownership can often rival that of a transition of leadership. In certain family businesses, there could be a constant practice of blaming other family members for problems in the business without seeking solutions, with the addition of being unable to let go of family interactions from the past. This emotional turmoil that permeates in these situations creates an environment that is not conducive to decision-making. Some family members may not let go of decision-making control, while others may be trying to make decisions for the wrong reasons. For example, attempting to work to protect the family bloodline rather than making decisions in the company’s best interest.
In addition, with respect to the senior generation of family businesses, there lies the question of what they would do after a transition of ownership. This is an essential question during times of transition and one that should be met with thoughtful consideration and caring communication.
When family members are not committed, not ready to let things go and do the work, or not aligned on the direction of change, the progress can be impacted. The dynamic of having some, but not all, family members engaged in the work leaves everyone dissatisfied and some questioning their continued involvement in the company, which could ultimately lead to the demise of the family business.
But when family members are all in? That’s where change can truly happen.
(All factual and statistical information presented in this blog has been obtained from an extract of a blog from thefbcg.com ) Follow us on our Facebook page and Family Business Office website at www.familybusiness.org.mt
At the Family Business Office we can offer you assistance in dealing with family business succession planning issues through incentives supporting advisory and mediation services. Contact us today on firstname.lastname@example.org.