Every family business is fraught with landmines. Successful families realize the issues won’t go away by themselves. The problem is that most families are ill equipped to disarm the potentially damaging issues that lay under the surface.
The good news is families that commit themselves to skill building and learning, can effectively disarm these issues. Most of the problems that lead to a family businesses’ disintegration are avoidable, but not enough families are taking action. Statistics consistently show that a mere 17% of all family businesses will make it successfully to the third-generation.
The first step is for the family to put its ear to the ground and listen for and detect the oncoming issues. Issues typically arise in predictable places in most families; sibling rivalry, personality differences, in law drama or health issues such as depression or substance abuse.
The Family Business Performance Center is an online educational resource for families and provides a free landmine detection map to help families review their situation and determine the appropriate course of action.
Most families can successfully resolve the issues by engaging in dialogue about the issues before they become acute. Brain scientists have proven individuals are much more creative and resourceful when facing a challenge when they are placed in a safe learning environment.
Too many families delay dealing with the issue until it erupts and causes significant damage to family relationships and individuals within the family. As the family tries to tackle the issue, when hampered by high levels of stress, they seriously limit their collective creativity and resourcefulness.
Family businesses that have successfully transitioned past the second and third generation have done so by engaging in a thorough and rigorous process for discussing the issues and mapping out a plan of attack. Successful transitions are years in the making.
The family should get started early and allow time for developing the skills and attitudes needed for long-term success. Many families benefit from outside advisors skilled in the areas of financial and estate planning as well as communication skill building and family dynamics.
Many families are reluctant to address the delicate issues for fear of causing stress in the family system. Unfortunately, delaying some short-term stress could cause life-threatening stress to the business. When the family takes on a thoughtful approach with proven practices, it can navigate its way through the short-term stress and become a stronger, healthier family.
It's human nature to avoid difficult situations. Long-term, sustainable family business success requires courageous and determined leadership!