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How To Deal With Family Issues In Your Family Business

How To Deal With Family Issues In Your Family Business

By | 11.22.10
How To Deal With Family Issues In Your Family Business

For many small business owners, the idea of grooming their children to take over the family business at the appropriate time seems like a completely natural one. Director of the University of Massachusetts Family Business Center, Ira Bryck, says the dream can turn into a nightmare unless you follow some common sense guidelines.

He says although most family businesses “seem to be chugging along nicely; there’s a strong likelihood you’ll have a major conflict at some point.”  He also offers advice on how to avoid such conflict or mitigate the damage when conflict occurs.

For starters, he warns against bringing children into the family business unless they exhibit the sufficient interest and aptitude. A lack of interest or competency can create conflicts with co-workers and customers and can spread beyond the workplace, causing resentment between you and the disaffected child and his or her siblings.

Some children feel that following in their parent’s footsteps is expected of them. You should have an open, honest discussion with your children about their career options and make it clear that you won’t be disappointed if they choose a different career path than yours.

Don’t bring sibling rivalries or conflicts into your business. If your children have difficulty relating to each other outside the workplace, those same difficulties will most likely spill over into their professional lives as well. As the business owner, you are then faced with a choice. You can either allow one of the children to engage in the business, or you can prohibit both from becoming involved in it. Allowing siblings to create conflict within your business should not be an option.

If you choose to bring your adult child into the business, don’t automatically assume that they will run the company someday. Your child may not aspire to eventually take the helm. They may see the experience they gain from being involved with the company as simply that – experience. Furthermore, there may be others within your organization who are better qualified to assume the leadership role at the appropriate time.

If your child has the interest, but you feel they lack the aptitude to assume the leadership of your company, don’t make the decision yourself. Bryck advises leaving that decision to others, for instance an advisory board or board of directors.  He says, “The board might pick one of the kids. But they also could end up choosing someone else in the company. In any case, it’s an objective decision not made by a family member.”

He also warns against giving your son or daughter too much responsibility too quickly. Some business owners mistakenly assume that their children have somehow absorbed the necessary knowledge and skills as if through osmosis. A lack of proper training can be misinterpreted by co-workers as incompetence and destroy your child’s chances for success. Treat your child like any other new hire, and make sure they receive the proper training for their assigned duties.

Your child should also follow the established career path and policy for advancement within the organization. If the starting position your child is assuming requires a college degree and your child doesn’t meet that requirement, don’t make an exception. If your small business doesn’t have formal policies, you might consider creating them to avoid conflicts and allegations of nepotism.

By the same token, it’s not necessary to make your child start their career with the company at the very bottom rung of the ladder. Doing so might make them feel like they’re being victimized for the sake of proving your impartiality. As with any employee, the starting position should realistically reflect their level of ability.

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