Family Business and its Unique Challenges
First, a few facts:
· Family businesses account for 64% of the U.S. gross domestic product.
· Family businesses generate 62% of the country’s employment, and account for 78% of all new job creation.
· The backbone of the American economy is family-owned businesses, with studies showing about 35% of Fortune 500 companies being family owned/controlled.
As a consulting company that works extensively with companies in the family business and family office space, we are charged with assisting them in overcoming the challenges that lay at the very foundation of those organizations, not the least of which is that only 3% of family businesses make it to the fourth generation.
Of all the things we hear from next-gen leaders in family businesses, a lot sound like:
“What’s your greatest direction in dealing with my father/ son/ mother/ daughter/ sibling/ grandparent? I’ve been trying to get him/her to hear that even though I respect what he/she has done in the world of business, that world has changed. What can I do to convince him/her that there are better ways of running the business? I genuinely wonder how much he/she values my opinion, or if he/she will always, in some way, see me as a child. I sense that he/she thinks I might destroy the business, but if our family business is going to survive, we need to do things differently.”
Working in the family business space is different from ‘business as usual” and the traditional corporate structure. There are very specific and unique challenges, particularly for us (my company), because we deal with issues that affect so many who are in one way or another caught inside the dynamics of a multi-generational family business — not just the family itself, but all of those who must interact with them, like family office advisors etc.
The one place each of us has to learn the skills to navigate family dynamics is the same for all of us; in the family its self. However, in a family based business those dynamics tend to migrate and play out in two other environments; that of the business, and quite separately those dynamics can play out in regard to business ownership also.
Something that underlies all these interactions is one of our deepest human desires — the desire to belong. At Authentic Paragon Alliance we are focused on bringing a family business back to its most nuclear purpose (a purpose that exists even beyond making a profit). We want to bring the family business to this understanding in a way that unifies everyone involved around a set of mental, emotional and even philosophical maxims. This then will determine and unify, not only the family, but also the business, ownership and the leadership.
We have learned many things from our interaction with family businesses around the world, however, we are always looking to upgrade our services and to fulfill a deeper need. Our intention is to have leaders (and all family members) step fully into their full potential, making them not only better more emotionally intelligent leaders, but also better family members.
With that in mind, I ask your help in assisting me with my latest research: Which of the following issues do you believe (multi-generational) family businesses struggle the most with? In other words, what would make you put up your hands and say, “We need help/assistance/guidance with (blank)”?
Here are a few of the ideas we’ve been given, but we know there are more.
· Lack of passion for the family business
· Feeling trapped
· Sibling rivalry conflict
· Pressure of family success
· Feelings of misalignment in the business Issues with other key employees (non-family staff) at family business
· Problems/conflicts with mom and dad (or grandparents)
· Fear of failure — disappointing mum and dad
· Not clearly understanding the expectations of the business and family
· Father-Son relationship issues
· Mother-Daughter issues
By lending your input in this research, you can help not only our team, but family businesses all over the world — including your own! I look forward to reading your comments and direction.
I trust that you found this article valuable. If so feel free to send this to your friends. I eagerly anticipate your feedback and comments.
Dov Baron, Expert on Leadership, presents his Authentic Leadership Matrix!
My Authentic Leadership Matrix is free this link! Why? Because one of the questions I’m most often asked is; What authentic leadership is and how do we define it? As a result, with years of experience and extensive requests, I created Authentic Leadership Matrix. It’s designed to give you a clear process of how to perform in each of the five main areas that are required for you to become a world class authentic leader. Start your yes and no evaluation to discover your leadership traits here: http://matrix.fullmontyleadership.com
Want to retain your top talent? Then my “Fiercely Loyal” book is for you! Plus get your free: “How to instantly bond any team” infographic.