In our education article Amy Schuman and I used the word ‘stakeholder’ to talk about the broad group of people who should have a role to play in the education process in a family business. While we use this word often in our work with clients, I realize that many people are not always sure what is meant by the word ‘stakeholder.’ Simply put, I would say it is any individual who may have a ‘stake’ or an ‘interest’ in the business and the family. While some companies may have additional stakeholder groups that are central for them, typically stakeholders fall into four broad categories:
1) Family members
4) Broader business community (creditors, suppliers, customers, community)
Of course, within each group there are sub-groups that come with some nuance. For example, are family members treated differently if they are ‘blood descendants’ v. those who marry in? Within the group of employees – there are employees who are in leadership roles and those who are ‘worker bees’ – and they may see choices or decisions quite differently from one another, and also differently from folks who are not working in the business at all. While this is complex, in a family business you often have the additional complexity of individuals who fall into more than one stakeholder group at the same time – you have a working family member for example.
This complexity is important to bear in mind as different stakeholder groups may sometimes see issues differently. As a result, it is important to consult with all relevant stakeholder groups on core issues, or at least take the time to deeply consider the impact of a given decision or priority for all the stakeholder groups affected. Education is only one example where this is appropriate – we tend to encourage transparency and open communication on issues as much as possible with families in business. While it is certainly true that you can’t please all of the people all of the time – if you are genuinely considering the concerns and perspective of all your stakeholder groups, and engaging as broad a cross-section of stakeholders as appropriate often, you will certainly minimize your risk of ‘toxic conflict.’ In most cases people mostly want to feel ‘heard’ – if you can demonstrate that you understand the concerns and priorities of all the stakeholders of your family business, you are well ahead of the pack!