Running a family business brings a unique set of challenges and dynamics that can complicate both work and personal relationships. While the blend of family and business can be rewarding, it also requires careful management to avoid potential pitfalls. Let’s explore some of the key issues that arise in family-run businesses and how to navigate them effectively.
The Unique Dynamics of Family Businesses
Family businesses differ from non-family businesses due to the intricate web of emotions, relationships, and history that family members bring into the work environment. These elements can enhance the sense of care and commitment but can also create conflicts and complications not typically seen in non-family businesses.
One major challenge is maintaining clear boundaries between personal and professional relationships. When family dynamics seep into the workplace, it can lead to co-dependencies and blurred lines. Without clear boundaries and exit strategies, what begins as genuine care can quickly become toxic. This fine line between support and interference requires constant attention and management.
The Emotional Component
One of the defining characteristics of family businesses is the heightened emotional environment. Emotions run higher because of the deep personal connections between family members. This can lead to passionate dedication and loyalty, but it can also result in intense conflicts and stress.
I know this first hand from my nearly two decades in my own family business. My mom started a design agency when I was small so that she would work from home. The small agency grew over the years and eventually my dad created a division for himself in the late nineties. I watched the business evolve in front of my eyes and swore I would never run the business. It is amazing how demands like that sometimes do a complete 180.
Due to a very large staffing turn over when I was graduating college, I offered to work part-time to help create some stability. That worked well until the Great Recession when I was start my originally planned exit and work got really hard and leaving my parents high and dry did not even feel like an option. From then on, I was deep in the business. It was due to this dynamic and frustration that the three of us sought out business coaching because it was becoming increasingly complicated to function.
Coaching was the best thing that happened to us. We were able to have the deep conversations that we needed to have to help us figure out what we each needed, including transitioning three family members out of the business.
The Role of Nepotism
Nepotism is another critical issue in family businesses. While it’s natural to want to involve family members in the business, it can lead to resentment and a lack of meritocracy. This goes both ways – favoring a family member for a role they are not suited for can harm the business, while neglecting the contributions of deserving family members can lead to feelings of undervaluation and frustration.
The Importance of Not Calling Staff “Family”
Another crucial aspect is avoiding the notion of calling all staff “family.” While it might seem like a way to foster camaraderie, it can create unrealistic expectations and pressures. Employees who are not actual family members might feel excluded or undervalued, while family members might struggle with the pressure to live up to the “family” standard. Instead, focus on building a professional, respectful, and inclusive work culture where everyone is treated fairly and judged by their performance and contribution to the business.
I love this quote from Adam Grant:
Dear managers: A company is not a family.
Parents owe kids unconditional love. Most companies only offer at-will employment.
A leader’s job is not to show daily affection. It’s to give people pay and purpose, support their success, and care about their well-being.
Coming from a family business, we used to call our staff a family. It felt right in the moment, but over time the emotional dynamic changed and the culture felt more family-like and less productive. We made an intentional choice to stop using “family” and changed to “team”.
The shift to calling us a team was a game change (pun intended). Team members are recruited to fill a specific role in the dynamic group. We need to work together and you have to work hard to stay on the team. You position is not guaranteed like a family member, you have to earn it every day.
The complacency were feeling as a family disappeared and was replaced with a comradery that I look forward to every day I go to work.
Balancing the Family Dynamic
Balancing the family dynamic in a business setting requires intentionality and a clear prioritization of business objectives over family ties. A family business can be incredibly powerful and successful if managed with a structured approach. One exemplary model is Chick-fil-A, which requires family members to work outside the family business before joining. This policy ensures that family members bring valuable external experience and perspectives into the business, helping maintain professionalism and reducing potential conflicts.
By setting clear boundaries, addressing emotional triggers, and prioritizing business goals, family businesses can harness the unique strengths of their familial connections while minimizing the risks. With the right strategies and mindset, your family business can thrive and become a source of pride and success for generations to come.
Black Creek Business Coaching 