Back to the Future – of Your Family Enterprise

 

David Karofsky

A few years back, I worked with a client who was struggling to make strategic decisions for his company.  He had just taken over his family’s business and, as is the case with many family businesses, was dealing with challenging family dynamics set in motion well before he’d come aboard. Even though the defining event – the sudden exit of one of the principles years before – had happened when he was a young adult, the ripple effect of that event was still impacting the family’s direction for the future.  This got me thinking about the paths family businesses choose, leading me to ask myself, “Are family business often forced down a path as a result of past unresolved conflicts in the family?”

As I thought about this, I suddenly remembered the scene in the movie Back to the Future II where Doc Brown is explaining the space/time continuum path to Marty McFly, and how his going back to 1955 in the first movie disrupted the universe: “Our only chance to repair the present is in the past, at the point where the timeline skewed into this tangent. “

You may be asking yourself, “What does this have to do with family business?”

It’s my contention that unresolved conflict in a family business acts very much like Doc Brown’s disruption of the space/time continuum; causing what I call a break in the family/time continuum that influences all subsequent decisions, affecting the direction of the family business going forward – and not always for the best. But if the family can “go back in time” in a sense, to resolve or at least honestly address this past conflict, it provides an opportunity to make strategic decisions based on what is best for the family and the business, rather than having those choices dictated by a conflict in the past, as illustrated below.

What are some of the most common causes of breaks in the Family/Time Continuum?

  • Poor communication: Family members are not able to communicate effectively with each other or to talk through their different perspectives; conversations that should be had are not, yet life and the business still move forward.
  • Family conflict /lack of resolution: Resolution does not mean agreement – but it does mean agreeing to move forward. You’ve got to be able to make good business decisions, in which the past doesn’t dictate the future.
  • Lack of strategic planning: Good strategic planning can help prevent these kinds of family/time continuum events from happening. If, for instance a family doesn’t plan in advance for the death of a family member, it’s possible that the business will shift in a direction that isn’t optimal when the event happens.
  • Unexpected death in the family: A sudden death in the family brings emotional trauma along with other practical repercussions that can easily push the family off course.
  • Poor definitions of roles and responsibilities: When you don’t have structure in an organization, it’s like a bad rowing crew that can’t pull together to win a race. This also contributes to the likelihood of…
  • Mismanaged expectations: When people don’t share a common understanding of their place and power in the family business, or when the leader refuses to share power with his heir apparent, it can lead to hard feelings that damage both the business and the family.
  • Entitlement: We often see cases in which Mom and Dad have effectively given their kids power in the company without having set expectations around what they have to do to earn it. When parents are unwilling to address entitlement issues, they run the risk of creating a break in the family/time continuum; the employees resent the kids, and the kids themselves aren’t capable of taking over when the time comes, risking the future of the business.

As we’ve seen, poor communication is most often the underlying current that drives conflict in a family business.  Before making changes to an intended strategic direction in your business, I encourage you ask yourself “What is causing this shift; is it due to changing market or financial conditions, or is because of unresolved family dynamics?”

If it is the latter, I encourage you to address those family issues before making change in direction that may negatively impact your business down the line. You may still find yourself continuing down the altered path, but at least you be doing it knowing this is what is right for the family and the business.