The Unique Work-Life Challenges Of Family Businesses
3rd March 2016 Josh Baron & Rob Lachenauer, BanyanGlobal
Great insight into the world of family business and the challenges of working with family members and getting the balance right.
Howard is the brilliant and overpowering founder of a billion dollar vehicle business who pressed his elder son into the business. The son is himself a brilliant man who wished to be a physicist but, overwhelmed by a sense of duty to his father, studied business in college and then entered the family firm. His father demanded absolute commitment to the business, forcing his son to be “all in” and to follow the career path set down for him in early adolescence.
Howard didn’t allow his son to carve out any personal space for himself; there was no pretense of a work-life balance. Relations grew tense, and things finally blew up after a board meeting when Howard skewered his son’s wife behind her back. Tearful, Howard’s son quit the company, and for years stayed “all out” of the business, remaining part of the family, but harboring bitter resentments toward his father and everything to do with the family business.
Being “all in” or “all out” are two unproductive ways of finding a work-life balance in a family business. Neither alternative allows the family member room to sculpt a satisfying role in the family business system. Of course, finding a balance is difficult in a publicly-traded company, too, but in a family business the boundary between professional and personal lives is often fuzzy.
There is a third way, but it isn’t easy. Consider Charles, Howard’s younger son. Even before his brother exited the business, Charles entered it. Unlike his older brother, however, Charles has stayed and manages to survive and thrive. Significantly, he converted to a new religion in his early 20s despite his father’s vociferous objections.
Although his religious choice was much more profound than a simple decision to establish a boundary between himself and the business, Charles’s religious identity separates him from his father. For example, he observes the Sabbath, effectively setting down concrete limits on how much the family business can encroach on his private time.
In one of the most powerful meetings that we have ever witnessed in a family setting, Charles told his father, “Don’t force me to choose between my religion and the chance to run this business because I’ll choose my religion.” His father had to respect the boundary that Charles had unilaterally imposed, or watch his younger son walk away.
By setting a boundary that his father honored, Charles found a way to live in both worlds — his own and that of the family business. The extreme boundary that he imposed also illustrates the difficulty that he faced in drawing a line between his love for his family and his personal need for some private space.
We see clients caught all the time on the horns of this dilemma. However much they love and support one another, even the closest family members find it difficult to live and work together all their lives.
As one of our clients, the gifted CFO of a large manufacturing company, said when he quit the business, “I can’t continue going through life always being the younger brother.” His identity as a family member undermined his professional growth and effectiveness as CFO. When people are not allowed to be their “own person” in a family business, the tragedy is that both the family and the business lose out.
Here are some solutions that client families have come up with to find a reasonable middle way between the extremes of “all in” or “all out” in their search for a work-life balance:
Separate family time from work time.
Something common to all our clients is that they are passionate about their work, sometimes to the point of being obsessive. One Latin American business family, for example, held weekly Sunday family lunches, but all the men sat at one table; all the women sat at another. The men talked business, and the meal turned into a de facto board meeting.
At the time, the business didn’t have a board. A part of the solution was to create a disciplined, formal board – to establish a space and appropriate times for them to have business conversations. The other part of the solution was intentionally to draw a line between family and work. To take business off the table on Sundays, the matriarch mixed up the men and women by imposing formal seating arrangements. Though artificial at first, family members eventually mingled freely.
Use your work voice.
In successful family businesses, family members learn to talk to one another as business partners and not as siblings or cousins. These family members implement certain rules that seem obvious, but which are not always practiced: Listen actively. Don’t interrupt when others speak. Ask for clarification when you don’t understand the other person’s point of view.
Participate equally. This business-like communication style veers sharply from the free-for-all exchanges that go on in many families. Indeed, establishing a boundary between the personal and the professional in a family business really involves being more careful about how things are said rather than what is actually said.
Create healthy silos.
Very often silos are disparaged as poor management practice. Indeed, they can cause problems when it comes to succession or when boundaries cut across customer needs or reduce operational efficiencies. But the vast majority of successful family businesses establish silos with clear roles: “I’m the Head of Retail, you’re the Head of the Textile Division.” Silos can be boundaries that prevent the confusion of responsibilities and authority that so often plagues a family business system. Silos have the added advantage of giving family members something that they can call their own.
Recognize the value of financial independence.
In business families where wealth can be substantial, friction often develops between the robustness of the business and the financial dependence of family members. We know of one family where the siblings are now in their fifties and sixties, and they still rely on the matriarch for their “allowance.”
The healthiest business families are those where parents respect the separate financial interests of the next generation, which isn’t easy. If the adult children or nephews and nieces aren’t responsible about money, then they will become more, not less, dependent on the older generation. But without establishing some boundary between what belongs to the business and what the individual family members want, need, and are accountable for, people remain beholden to the business in a way that breeds frustration and discontent. Without fiscal autonomy, a work-life balance cannot exist in a family business.
Create an identity outside the family business.
Business families often have strong ties to the community, and their identity and status are deeply bound up with it. Yet an individual’s identity can get subsumed under the family’s prestige and stature in the outside world. While status confers many advantages, it’s important for family members to find a place in society where they can create an identity unrelated to the family.
Charles finds that place in his religious community, where he feels that people don’t care about his last name. To them, he is just Charles, and that’s the way he manages to achieve a work-life balance in a very successful and demanding family business.
About the Authors - Josh Baron is a Partner and a co-founder of BanyanGlobal Family Business Advisors, and author of Great Power Peace and American Primacy: The Origins and Future of a New International Order. Rob Lachenauer is the CEO and a co-founder of Banyan Family Business Advisors, as well as co-author, with George Stalk, of Hardball: Are You Playing to Play or Playing to Win? This article was first published on Harvard Business Review and has been reproduced with permission from the authors. For more information please visit the BanyanGlobal website here
Some of the identifying details in this article have been changed to protect client confidentiality.