The promise and pitfalls of family business are both related to the overlapping spheres of family and business. Each sphere has distinct priorities, values, and norms. And in a family business, the overlap creates unique challenges and opportunities.
I learned this from David Bork, a pioneer in family business consulting whose practice began in 1968. Several years ago, I was a guest in his home for a two-day mentoring session. I’m grateful for the wisdom he shared with me, informed by four decades of experience.
The Tension Between Unconditional Love and Performance
One key takeaway was the tension created by different criteria for acceptance in family and business.
He said, “The task of families is to raise responsible adults who have high self-esteem and can function independently. That is our job as parents. Acceptance in the family is unconditional. We unconditionally love our children. …
The task of business is generating profits. If you aren’t generating profits, you’re not in business! Acceptance in business is based on competence, ability to develop skills, to produce and perform. If you can’t produce and perform, you don’t belong in the family business. … So you have in effect conflicting messages between the family and the business. Where the problems come in is when you confuse those tasks and try you to use the business to do what you should be doing as a family.”
Here’s how this tension can arise:
- A family member is kept on the payroll even though the person’s addiction-fueled erratic behavior would make them unemployable in a similar nonfamily firm.
- A parent hires their adult child into the business in hopes that working together will “fix” a strained personal relationship.
- A sibling is paid well above market rate or given unwarranted bonuses as a gesture of love, loyalty, or even “catching up” for past neglect.
- Family members who underperform or disrupt business operations are not held accountable out of fear it will cause family tension.
Creating Boundaries Between the Spheres
In these situations, the business becomes a therapeutic tool rather than a professional endeavor. Emotional needs are addressed through financial decisions that should be based on role, contribution, and performance. A leader who concludes that this is justified should do so only after carefully considering the consequence.
In healthy business families, this unconditional/conditional dynamic is named and discussed openly. When the values, boundaries, and expectations of each sphere are clear and consistent, unique rewards are possible. The unconditional love and acceptance of family relationships strengthen affection, appreciation, respect, and unity among those inside and outside the enterprise. Appropriate accountable relationships in the business undergird consistent operations and results.
Learn how to avoid the pitfalls & enjoy the rewards.
Family Business Facilitators can help you develop family charters and employment policies to avoid the pitfalls and enjoy the rewards of the overlapping spheres of family and business. If you’re interested in learning more about our facilitation and workshops on this topic, reach out via email or submit a request using the form below.
