The complexity in family enterprises is often illustrated by three overlapping circles that represent the family, the business and ownership. “Everything is interconnected, and where things overlap, there is potential for a lot of conflict,” says Suzanne St. John Smith, a therapist and designated family enterprise adviser. “That’s why it’s important to look at issues from the perspective of family systems theory.”
Every family system seeks to maintain a sense of balance, which is often supported by behavioural patterns that have been ingrained for a long time. Yet the balance is not necessarily a healthy one, and when Ms. St. John Smith steps in to help families, they have typically come to a crisis. “That’s when families turn to facilitators like me, usually on the recommendation of other experts advisers, such as lawyers, wealth managers, accountants, or when family members realize they have reached a stalemate and cannot move forward unless they sort out the dysfunction within the family system.”
In her work with families, Ms. St. John Smith first determines what the particular system looks like. “Once I gain an understanding of it, I encourage different behaviours, which often upset the previous balance,” she says. “But when people work consistently on changing unhealthy patterns, then the family can find a new balance, and one that sits on a much healthier foundation.”
In a fairly typical scenario, the founder of the family business is a strong-willed individual, whose drive and ambition have contributed much to the success of the enterprise. However, these “founders are not that keen to accept to input from others,” she says. “And many of their family members are conflict avoiders, because they simply don’t want to get into the path of an angry founder.”
A system like this may appear stable, but it can prevent successful transitions, explains Ms. St. John Smith. “For achieving long-term goals, the founder has to step back and manage his emotions. And other family members have become more courageous in sharing their vision for the future of the family business.”
When the founder is not mentoring future leaders – the business is at risk, believes Ms. St. John Smith. “Many founders pay lip service to succession, but have difficulty letting go. They may worry that successors are not competent. Or their identity is so closely linked to the business that they cannot imagine life without it,” she says. “We typically encourage founders to move into advising roles where they can still participate while allowing the next generation to grow into effective leaders.”
In order to promote a healthy system, Ms. St. John Smith suggests regular family meetings and/or family councils, where family members – internal and external – can share their visions and goals for the short-, mid- or long term. Rules and guidelines can help to set the tone for these family meetings, and she encourages the exploration of questions like: How do we handle disagreement? How can we make sure everyone is comfortable speaking up?
Such gatherings can help the next generation become accustomed to contributing to the discussion – while also teaching founders that it is important to have other voices in the room, says Ms. St. John Smith. “When families communicate regularly, respect and understanding can develop over time.”
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