Facing up to Difficult Family Business Issues

Joe Schmieder

“Hey dad, could we talk about what Uncle Ted is doing to turn-around our construction division?”  asked Jerry Bates, third-generation family member working in the business as Vice President of Development.  His CEO father, Donald, replied:   “Sure son, we can address this in 2016 when Ted is ready to retire!”

Why do so many members of an enterprising family avoid discussing difficult matters?  Some of the brightest family business leaders simply cannot, or will not, take on issues that could create a potential fissure in a family relationship.  As close brothers, Donald and Ted have gone through many challenges together in life after their father died when they were in their twenties.  Although not fully prepared, they had to grab the reins of the business and learn quickly on the job to lead the family firm.   They built the company into a thriving entity that now employs over 300 people, including five family members.    As the Great Recession severely impacted the business, particularly Ted’s division, they have not been able to fully discuss some tough measures to take with employ lay-offs and other expense reductions to bring the division back to profitability.

Whatever the reason, family members are prone to avoid many tough issues when they believe the risk of damaging the family is too high.  Unfortunately, most difficult family business issues do not go away.  Like a weeds in a garden, the “un-addressed tough issues” can eventually choke out the valuable elements of the family business.

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