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Bringing the family business community together

An Important Season For The Family....Business

5th December 2014 Cathy Booth, BDO Northern Ireland

This sense of becoming a ‘business family’ is fundamental to the success of the businesses, but what about the fundamental needs of ‘a’ family?

Family businesses can go under for many reasons, including family conflicts over money, nepotism leading to poor management, and infighting over the succession of power from one generation to the next. Regulating the family’s roles as shareholders, board members, and managers is essential because it can help avoid these pitfalls.

We have heard the above many times before, the old adage - family firms that succeed are those that have struck the right balance between the needs of the business and those of the family.

Much is written in the sector about how a family business should/could survive over the generations through permeating their ethos of ownership with a strong sense of purpose. Over decades, they develop oral and written agreements that address issues such as the composition and election of the company’s board, the key board decisions that require a consensus or a qualified majority, the appointment of the CEO, the conditions in which family members can (and can’t) work in the business, and some of the boundaries for corporate and financial strategy.

The continual development and interpretation of these agreements, and the governance decisions guided by them, may involve several kinds of family forums. A family council representing different branches and generations of the family, for instance, may be responsible to a larger family assembly used to build consensus on major issues.

This sense of becoming a ‘business family’ is fundamental to the success of the businesses, but what about the fundamental needs of ‘a’ family?

With the festive season upon us it may an opportunity for our business families to reflect on how our family roles have played out over the last 12 months, and how we have ensured we have provided for these in our incredibly busy lives.

In considering the above it’s useful to reflect on the characteristics that defines the family unit.

FAMILY                                             

Emotion Based                                   

Subconscious Behaviour                      

Inward Looking                                   

Minimising Change                               

BUSINESS

Task Based

Conscious Behaviour

Outward Looking

Exploiting Change

Needless to say, where a family is in business together the overlap between the family unit and the business can provide ample opportunities for FRICTION and CONFLICT.

The family system is emotion-based with its members bound together by deep emotional ties that can be both positive and negative. These ties, and indeed, a great deal of behaviour in family relationships, are influenced by the subconscious – for example:

  • the need for parents to treat children equally

  • the need for brothers to dominate brothers

  • the need for fathers to be stronger than their sons; and so on.

The family system also tends to be inward-looking, placing high values on long-term loyalty, care and the nurturing of family members. In addition, it’s a conservative structure operating to minimise change – keeping the equilibrium of the family intact.

We have worked with many family businesses, and families, over the years, and, whilst not a scientific categorisation, recognised a number of different ‘types’ of families – each one presenting its own strengths and challenges.  Through our work we have however identified what we believe are the key characteristics of strong families:

  • Spending Time Together: Strong families try to find time to spend time together to help create a feeling of family – this time is for laughing, listening and talking!

  • Strong Commitment to Each Other: Strong families make their relationships a high priority. They face the same difficulties and problems as we all do. But the bad times do not destroy them. They work together to solve their problems. 

  • Showing Caring and Appreciation: Showing respect and affection for the uniqueness of each family member is important.

  • Open Communication & Good Listening: Families who share beliefs and feelings, and listen to one another feel more connected. Communication is one of the key elements of family relationships—whether it is spending time talking about little things, or big issues!

  • Spiritual Wellness: Strong families believe in a greater power. Shared beliefs help to create a bond between family members. 

  • An Ability to Cope: Strong families pull together and draw strength from each other when problems arise.   

So as you are spending time with your family over the festive season – make sure it is time well spent!

 

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