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Challenges & Continuity in Family Businesses

Family businesses are the backbone of the U.S. economy and they most certainly are the backbone of the jewelry industry economy. But there is great misunderstanding about the role of family members in a business and whether the business exists to serve the family or whether the family exists to serve the business.

Healthy Family Systems and Healthy Business Systems

There is a big difference between a healthy family system and a healthy business system. In a traditional business system, the business comes first and specific personal needs are secondary. In a business controlled by a family system, the business is often viewed as a vehicle to serve the family’s needs. As a result, families owning businesses often put personal needs ahead of the needs of the business. The business can therefore easily become a tool to serve the interests of its owners or even other individual family members who lobby to put their desires ahead of the business itself. The result is decisions based on emotional concerns instead of logical, rational thinking and best business practices. Worse yet, jealousy, bitterness, and strife fuel even deeper problems which cause family breakups and the impossibility of business continuity.

Friction and Heartache

The friction and heartache I so often see in family businesses in our industry – particularly among parents and children, and most often between fathers and sons – is debilitating, demoralizing, and disheartening. But it doesn’t have to exist if people are capable of getting their egos out of the way, understanding their blind spots, not being greedy, aligning their values, getting past the baggage that each carries and agreeing to move forward with reconciliation. None of this is easy, but all of it is doable with the right counsel.

The main problem lies not with the business itself, but with the family system and relationships that have reached a critical point. Changes to the business system can attempt to accommodate the problems but seldom do because the root of the problems lies with family relationships that get in the way. There are countless stories of deep-seated psychological factors that cause family dysfunction and inevitable business dysfunction.

How to Resolve the Problems

So, what can members of a family business do to hope to resolve such conflicts? First, acknowledge that you have a problem and that you are operating a business where decisions should be based on sound business principles instead of sentimental and emotional considerations. Second, recognize how these same sentimental and emotional factors that are inherent in your family system have brought you to a no-win situation in your business. You may not even know that these factors are present, may not recognize or even acknowledge them, or just assume that this is normal and to be expected.

The beauty of family businesses is that the individuals involved have a vested interest in the success of the business and in the well-being of each individual in it. The ugly side of family businesses reveals itself when individuals put their own personal interests ahead of what is best for the business.

A Solution to Achieve Family and Business Harmony

I encourage people to treat their business as a family business that is owned and operated by people who are much more than mere business associates, but who, for all the right reasons, agree to put the interests of the business ahead of their own personal interests. I also encourage people to treat owners with the respect they deserve, having invested their time, energy, money, and personal identity behind a vision for the future of their enterprise and their family. But I also encourage these same owners to have mutual respect for family members who are not exactly like them.

Finally, I encourage anyone reading this to have the courage and intelligence to get some help if you need it from an outside professional who can intervene and address these issues in a fair and unbiased way. This may be the only way to gain the peace and harmony you seek – let alone the business continuity you so desperately want and deserve – in your decades old family business.

AT: 05/29/2018 01:00:37 PM   LINK TO THIS ENTRY

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