A successful business and healthy family dynamics

August 16, 2010
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What do you have in common with the award-winning Harley Davidson, Ping Golf and Gordon Foods? You are a successful, family business contributing to the economic growth of your community and nation.

Today you may be feeling some optimism as the economy finally is showing fewer signs of decline. Hopefully, the worst has been weathered. While challenges for small businesses remain, the additional challenge of family businesses requires stronger skills moving forward. DNA does not determine a family business’s success; instead, the role of family dynamics in the business is a determining factor, especially managing conflict.

You are not alone. With family businesses representing 80 to 90 percent of all businesses in the U.S., and 60 percent of all public companies family controlled, you are in great company. The good news is that family-owned businesses represent approximately 50 percent of the GNP and 60 percent of the labor force, while creating 78 percent of all new jobs.

The bad news, however, is that only 40 percent of family businesses will survive into the second generation, and only 12 percent will survive into the third. Although several factors enter into survival, not being blindsided by conflict is vital. Creating both business success and family harmony requires the following foundation action steps:

Recognize and tame the invisible gorilla. Have you ever been in a meeting that you thought was going well but somehow uproar reared its ugly head between family members and everything went downhill? Well, the invisible gorilla appeared, carrying all the family memories and growing stronger under stress. While you discuss roles and responsibilities for a new product or process, the invisible gorilla is whispering about who received the best bicycle, or even worse, recalling when you were an “unruly” child at the beach.

In stressful times, perception trumps reality, so recognize that resistance may be based on perceived family history, not your reality. When asked by The Wall Street Journal why he stepped down as CEO of Estee Lauder, William Lauder cited the constant stress of mediating family disputes. “It isn’t easy to answer to board members who remember you as a child and then call you at home anytime.”(Family Business 2008)

Keep competence, not DNA, as the focus. You can’t banish the gorilla, but you can tame it. Family members should learn techniques for not participating in the emotional hijack but remain focused on important business issues.

Have a kind sense of humor. I am not suggesting sarcasm to provide the proverbial fuel for the flame, but I do suggest decreasing stress by maintaining your own self-management. A next-generation member needs to recognize that he can never become the oldest sibling, nor can he erase from his parent’s memory that unfortunate bad decision, but he can learn techniques on how not to become emotionally hooked and focus instead on current accomplishments.  

Establish rules of behavior. Increased conflict and tension are part of complex relationships and require a clear plan for dealing with disagreements. In all businesses, success requires clear communication, but members of a family business have far more face time, providing opportunities for more pleasure and more pain. How do successful businesses increase the pleasure and decrease the pain?

Do not, I repeat, do not allow temper outbursts from anyone, including present or future leadership. Repeated temper flares are a means of manipulation demonstrating that “I want my way at all costs.” Setting boundaries will help other employees feel safer knowing that you are in charge of the situation. If you are frustrated in dealing with outbursts, get outside help in learning how to manage a bully. Everyone will appreciate the relief.

Agree on how to negotiate strong differences and stick to that agreement. Remember that family members tend to break their own rules.

Practice, practice, practice. I tell my clients that conflict resolution is a learned skilled needing daily reinforcement.

Share your gratitude daily. We often take family members for granted.

Business meetings vs. family gatherings. All families need quality time together without the intrusion of business. Family gatherings are opportunities to nurture, play, share talents and recognize the value of those who are not directly in the business but share in its legacy. In working with spouses, the complaint I hear most often is that the business permeates all areas of the home and most family gatherings.

If the business discussion must occur at a family gathering, move the discussion to a separate area and agree upon a time limit.

Remember that the member who initiates the business discussion at a family event may be trying to gain power or initiate conflict.

If you share a home and work together in the business, reach a mutual decision that business discussions will occur in a designated area and be scheduled. Tough to do but when the home atmosphere has less conflict, the result is a more productive time at the worksite with less stress.

Plan family meetings to discuss the business and achieve the continuity needed for multigenerational ownership. Invite all family members to participate in legacy conversation: “What is the vision of the family business for the next 25 years?”

Clients who successfully have implemented these three action steps describe results in decreased conflict and increased productive outcomes. If you are uncertain how to begin, seek expert help to get you started. Begin today with just one step.

You have worked hard and deserve to have it all — a successful business and healthy family dynamics.

Camille Donnelly works with leaders in family businesses throughout the U.S. and Central America, specializing in healthy family dynamics. The owner of Donnelly Leadership since 1984, she was a co-founder of the West Michigan Family Business Council and is a sponsor of the Family Business Alliance. She can be reached at camille@donnellyleadership.com or www.donnellyleadership.com

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