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  • Writer's picturesarah bays

What Comes First in Family Business - the Family or the Business?

How being born into a family business can be a blessing - or a poison chalice!

I speak from experience when I say that whilst being born into and raised in and around a family business can undoubtedly be a blessing, it can also present itself as a poison chalice that can shatter the very bonds that were behind its conception.

family business contract

Good intentions

The founders of a family business will undoubtedly share hopes and dreams, have aligned ambition for its future and most likely share common vision that future generations will continue the business beyond their own life journey.  But the very bonds that serve as the driving force for such enterprise can also form the foundation of huge potential risks, with so much more at stake than just the future of the business.

So what happens when the next generation comes along, with their own ideas as to the direction the business should follow and the route it should take to achieve their goals?  And what about when more than one member of the younger generation decide to follow in their parents' footsteps, but are not aligned with each other?

So how does it all go so wrong?

There are many things that can lead to conflict in our family businesses. In our case, my husband and his siblings were simply worlds apart in their long term visions for the third generation business as well as the levels of investment (both financial and personal) they were willing and/or able to make.  These differing views and personal situations led to recurring disagreements, compounded by an inherited issue within the family whereby effective communication was painfully lacking.  It is worth noting that this entire situation was practically an exact repeat of that which had arisen years before between my father in law, his father and brother (the three original founders of the business).  In both situations, the outcome was a buyout of two of the parties by the third.  Equally in both cases what followed was years of discord which naturally spread to the wider family and caused an immense amount of pain and heartbreak. Knowing what I know now, I deeply regret that there was never a suggestion or understanding of mediation (and maybe even some individual conflict coaching) as an opportunity for all concerned to be encouraged to take part and learn how to be open and honest with one another in a safe environment to promote far healthier working relationships that would have seen the family bonds survive the buyout.

Act fast!

The truth is, conflicts within family businesses are not uncommon (quite the opposite in fact), and they can escalate rapidly if left unaddressed. The emotional investment in both the family unit and the business itself makes these conflicts particularly challenging, which is why it is crucial to recognise the signs of tension early on and take proactive measures to address them.  It is important to remember that conflict amongst family members in business is not only distressing and difficult for each of them personally, but can (and often does) have a very negative and damaging impact on the wider team and the function of the business itself.

Few businesses do not encounter issues at some time or another arising from differing views at director level, but in those without the added complication of deep family emotional ties it can be easier for those involved to work through their differences and reach mutually agreeable  conclusions without the need for outside intervention.

When it comes to family businesses, however, my best advice would be to seek outside support (maybe through mediation, conflict coaching, or perhaps even business coaching) at the earliest possible opportunity in order to work through the challenges they are facing in an open and honest environment, which will undoubtedly set the path for more effective communication in the future and go a very long way towards securing the future success of your family business for the next generation!!

Need help and support?

If you would like to know more about how we at Montage Mediation can help the sustainability of your family business, book a no obligation chat below.


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