Family and business, put them together and you have family business, the core of so many local economies throughout the world. Switch the words around, it becomes business family and you can imagine the people behind the enterprise. The families who turn entrepreneurial dreams into powerful engines of economic growth and social development.
There are so many myths about families and business for instance, many people think family owned businesses are not profitable. Actually, they are often more profitable than other forms of business. Also, it is often thought that family businesses do not last but research shows they actually tend to have a longer life cycle than other forms of business. Another myth, people feel families in business face unsolvable problems, siblings who fight over succession, huge tensions between parents and children, the successor who spends the familiy’s hard-earned wealth and on, and on. In reality most families in business endure because they learn to get along and solve their issues. With all the bad press we often forget about the good sides of being part of a family in business. Of course there are difficulties but many families enjoy long periods of harmony, happiness, and success.
The reality is that all family businesses begin the same way, with an entrepreneurial dream, one that grows and flourishes over generations. The most important task throughout this journey by far is for the family to maintain harmony while building its capital. Easier said than done, certainly there are frustrations, conflicts, and confrontations. Business families, especially extended and multigenerational families, may not always unite around the initial business dream, but they can succeed and go on to develop new family ventures together. They can expand the business, engage in philanthropy, or build a family council that provides for the well being of future generations. We know that business families worldwide share the same challenges, but families in China, Brazil, Canada, meet these challenges in different ways based on their culture and experience. The life of a business family is always full of challenges.
My husband and I, along with his two brothers, have put everything into the business, all our time and money. I worry that we are stretched too thin and will not succeed. What should I do?
My father appointed me CEO of the family corporation five years ago, but he still makes all the key decisions. He will not let go, and now he is remarried and I see him getting closer to his new family and becoming more distant to me and my sister. Is there still a future for me in this family business?
Our family has a successful chain of health food stores. We are cousins and part of the third generation. See, our other cousins do not really seem to care much about our legacy, but we would like to make something of it. Where do we start?
You know I thought I knew a lot about the day to day working of our packaging business but when my husband suddenly died I realized how unprepared I was to take over. The kids were still in school and it all came down to me, it has certainly been a challenging journey for all of us, but it has also been a rich learning experience.
Each challenge is different and can make business families uncertain and anxious, but beyond difficulties there are journeys into discovery, which can lead to wonderful moments of inspiration and innovation for the business and the family. Facing challenges will often trigger intense and complex emotional responses within families in business. Just under the surface there can be strong feelings about the family’s past and worries about what the future holds. When a family and business is unified there are deep feelings of harmony and family bonding. These positive feelings come from belonging to a group that gives meaning to everyone, a family with a sense of purpose, energy and creativity. One thing is for sure, there are changes in the lives of each family member. There are changes in the life of the business itself and in the broader life of the industry to which the business belongs. The fact is, families in business are in constant motion, achieving unity and harmony in the midst of such change, can only happen through a shared vision and a coherent governance system that is refined over time. Each family system is unique, created by the family itself over the years. Fortunately there are fundamental practices that help family members successfully navigate the stages they and their business will go through. Each family and business should know about them.
Successful businesses do not necessarily make for success families, but successful families who apply themselves everyday to the task of family governance can create wonderful enterprises, ones that have a long lasting and positive impact on the family and their local communities. Family owned businesses that make it through the second and third generations tend to out-live and out-perform non-family owned businesses. They tend to be more productive, and more successful than other forms of business. Clearly it is worth investing in our entrepreneurial families, they are crucial elements in our social fabric and our local economies. Let us unveil the mystery. Beyond the myth there is so much to offer.