The truth is that there are countless ways a business can wreak havoc on a family. Talk to anybody involved in a family business—even the non – family employees—and you will hear the stories of conflict, fighting, and sometimes a toxic environment.

First and foremost, love and money in a family business or legacy family are symbiotic and immiscible—they are connected but don’t always mix together naturally. Love and money, what experts refer to as emotional economics, influences nearly everything in business and family relationships.

The problems today for legacy families are probably far more complex and snarled in family politics. Maybe, the founder of the business might have passed from the scene. In a last stride of generosity, dad distributed sizable chunks of stock to his children and grandchildren.

There are now several families sharing in the goodies, many parents lobbying for jobs or perks for their kids, and no one to umpire their disagreements. At this point, the business’s needs are tossed aside. Entitlement then becomes rampant; greed is labelled “ambition,” and deep – seated animosities are often given righteous justifications.

Naturally, families are concerned with people’s emotional wellbeing, and businesses are primarily concerned with economic success. Families are also more inward looking, often resisting change, while a business demands innovation and a focus on external events to succeed, and these two do not always go along.

Some owners even bring warring family members into the firm in hopes of teaching them to get along better. The business is expected to provide therapy rather taking care of the economic well – being of the family.

Even when it becomes clear that kids in some families will never work as a team, their parents still search for a solution that will keep everyone “happy.” Some owners try to create separate areas within the business so that siblings can have their own turf and never have to come in contact with their brothers and sisters and cousins. Gradually, these wounds continue to fester beneath this arrangement, however; sooner or later, the blood – letting resumes, the family crisis deepens and the internal war breaks out.

Some prefer to believe that conflict in their family doesn’t exist. They can be brought to their senses and mobilized to act rationally only when given a blunt warning: When they are gone, their grieving widow will be left to deal with the problems they ignored and these grown children might seem uncontrollable at this point.

Family is always family—you trust them, you love them, and you admire them. But they are also blood and that tends to amplify things. Arguing with your business partner is one thing but having to sit at the family dinner table with them makes things even worse.

Most businesses have been started and managed successfully by families. But it is always pertinent to identify these pitfalls and avoid them as quickly as possible. 

Steps to Avoid Pitfalls When Running A Family Business

  1. Consider outside the Family for Objectivity

Always remember that family members rarely give honest, objective business advice—especially when a business is first starting. Some risk – averse relatives may throw a wet blanket on even the most brilliant ideas. Others are hesitant to tell another family member their idea won’t work, that they are charging too much or anything else that seems unsupportive.

Most just don’t want to be proven wrong, so they keep their opinions to themselves. This is the more reason it is better to identify a team of “neutral” advisors outside of the family who you can trust for impartial advice when you are facing important business decisions. This group can include professionals from a variety of fields; an attorney, an accountant and a banker make a good start.

  1. Good Communication

Note that communication is one of the recurring issues that owners and executives in family business identify as a major obstacle to productivity. In a family business, poor communication can turn into personal and professional conflict.

It is a family’s ability to manage and resolve conflict that determines its maturity and emotional health. Always note that communication is more than transmission of information; it is the interactional heartbeat of the organisation.

Whether it is resolving relationship issues, confronting challenges, managing conflicts or planning for succession, effective communication skills guarantee that every situation will be addressed and resolved in a thoughtful, deliberate, constructive and comprehensive way. Clear, constructive communication must always be the goal.

  1. Put Agreements in Writing

We all don’t always like to think about death or divorce. But succession and contingency plans—including obtaining key man insurance and establishing buy – sell agreements—can help eliminate power struggles down the road should the unexpected happen. Also to be most effective, it is best for these plans to be put in place while the founders are still playing an active role in the business.

  1. Boundaries

According to experts, family businesses have three components: the family, ownership and enterprise. Boundary skills determine how family members, owners, non – family executives and employees will interface for the advantage of the business. Note that unclear boundaries are at the root of many of the problems in family business. Boundaries need to be clear and constantly maintained if they are going to do the job for which they were intended.

So to create and maintain good boundaries family business leaders must define roles, responsibilities and accountability for owners, managers and employees and methods for handling certain personal matters. Family members must not meddle in areas for which they do not have responsibility.

  1. Hold Relatives Accountable

Note that holding family accountable is not only bad for business; it can also hurt the morale of family and non – family members alike. That is why you should set goals for each family member—whether they relate to sales, profits or implementing IT systems. Also ensure they know the consequences for non – performance. Family members should also participate in regular discussions of the company’s future to help ensure that everyone buys into the company’s larger goals.

  1. Family time isn’t Business Time

It is not easy to do but it is very imperative. When you are at work, you are not family; you are co – workers. You are united together with the goal of making the business thrive. When you are outside of the business, you are family.

You love each other unconditionally, you laugh together, you are there for each other when times are tough, and you help each other in whatever way is needed. Also try as much as possible to keep clear lines between these conflicting roles. Talk about work at the office—not during family times. Don’t make the business into what defines your relationship.

  1. Begin training the next generation of leaders sooner, rather than later

Most business owners may think it will be years—perhaps decades—before you are ready to retire. In a perfect world, events happen on our own timetables. But we do not live in a perfect world. So it is imperative to have a formal plan in place to identify and train family members for their future roles.

It is also why you will want non – family members on your board of directors; they can help ensure that the most qualified family members are chosen to lead. One of the worst mistakes a family business can make is to place someone in a position of authority solely because he or she is family.

  1. Be Flexible

Always understand that family members are people, and people change. Children may not wish to follow in their parents’ footsteps. The ideal way to ensure a family business’ longevity is to recognize and respect your family members’ interests and limitations, and identify leaders with the fortitude to follow a business’ long – term vision. Although such decisions can be difficult, In the long run, what’s best for the company is often what’s best for the family as well.

  1. Take the Arguments to Lunch

Even though it is a bad idea to bring the drama to work, it still doesn’t mean it shouldn’t be resolved right away. If that is the case, gather the affected family members and head out to lunch. Everybody is more agreeable when they eat and since it is outside of the office, having tough conversations about family problems is completely appropriate.

  1. Alignment

Family businesses can always achieve long – term success when family members, owners, executives and employees have similar values and are united toward the same goals. Note that the best companies are the best aligned. Strategy, purpose and organisational capabilities must be in sync. Without clear alignment family businesses are vulnerable.

Misalignment creates discord, tension and conflict. Alignment creates a process that reinforces the company strategy, increases family and organizational harmony and promotes accountability and profitability. Always strive to keep the focus on the business! Its success is what makes other things possible.

Running and ensuring long term success in a family business is always centered on the connection and maturity shared by family members. Ruining family relationships over what may be petty arguments isn’t worth it in the end. Talk about things while they are small concerns. Cultivating positive family relationships outside of the office will help create a positive atmosphere at work.

Ajaero Tony Martins