Cracks in the Foundation: Family Business Truths
Is your family business built on a foundation of unspoken truths? Beneath the surface of legacy and loyalty, hidden emotional dynamics can silently sabotage even the most promising family-owned enterprises. Join Andrea and Michelle as they pull back the curtain on the unspoken stories and secrets that often derail family businesses from the inside out.
Discover the delicate dance of not wanting to "rock the boat," the stifling effect of withheld feedback, and the silent resentments that can fester between generations and even impact non-family employees. Learn why these unaddressed issues erode trust, create false harmony, and ultimately threaten the very future of the business.
In this episode, uncover these hidden dangers and gain practical insights on how to bring the invisible into the visible, fostering honest conversations and building a resilient family legacy. Don't miss the downloadable worksheet to help you identify and address these critical unspoken issues within your own family business.
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Cracks in the Foundation: Family Business Conflicts & Truths
The idyllic image of a family business often masks a more intricate reality, where beneath the facade of shared heritage and loyalty can lie a complex web of unspoken tensions. These simmering resentments and unresolved issues can evolve into significant family business conflicts, posing a direct threat to the longevity and harmony of the enterprise. Addressing these underlying family business issues is crucial for ensuring business success and healthy family business relationships.
At Revela, we understand the unique challenges and opportunities that come with family-owned businesses. So, on our recent episode of The Leadership Hustle podcast, we navigated this sensitive terrain, shedding light on the emotional dynamics that can derail family-owned ventures. Learn about the critical need to confront the hidden stories and unspoken truths that often fuel internal friction and lead to significant family business conflict.
Unveiling Common Family Business Issues
Andrea Fredrickson and Michelle Hill, drawing from their work with many family-run companies, highlighted several recurring issues that often contribute to internal friction. Understanding these common family business issues is the crucial first step in untangling the complexities of family business dynamics and ultimately fostering healthier family business relationships.
Generational Conflict
One of the most prevalent family business issues arises from the delicate dance of succession. As Fredrickson pointed out, a common refrain from the older generation is, "I don't know that the next generation is ready. I don't know that they're prepared." This sentiment, often voiced without any proactive effort to mentor or prepare the younger generation, creates a significant deadlock.
The lack of open dialogue about future leadership not only leaves the younger generation feeling undervalued and without a clear path forward, but it also fosters a perception that the older generation is unwilling to transfer control. As Hill observed, "...by not saying something…the younger generation thinks they're doing well.” The absence of constructive feedback can lead to a disconnect in expectations and perceived readiness. This generational conflict can breed frustration and stagnation on both sides.
The Fear of Feedback
Effective communication is the lifeblood of any successful organization, yet it often becomes a casualty in the intricate dynamics of a family business. As Fredrickson noted, there's a significant reluctance to give honest and timely feedback within the family unit. This fear of hurting someone's feelings or rocking the boat leads to a culture of "false harmony," where crucial issues remain undiscussed.
Hill pointed out familial roles can heavily influence professional interactions and cause communication problems, saying "...the person receiving the feedback is going to possibly hear that feedback coming from maybe a childhood voice. Right. And that it's more of a judgment." This blurring of personal and professional boundaries can distort the intended message and hinder growth. The failure to provide clear, constructive, and timely feedback becomes a significant communication problem, hindering individual and organizational development.
The "Family Tax"
Another tricky spot that can cause problems is when people feel like some family members aren't contributing their fair share to the business. This feeling of uneven work can really cause resentment towards family members.
The idea that "...they wouldn't really have a job if they weren't related," as Fredrickson articulated, can breed significant resentment towards both non-family employees and other family members who feel they are carrying a heavier workload. This "family tax," where some family members are perceived as not pulling their weight yet still benefiting from the business, can create a toxic environment and undermine morale. The lack of accountability and the feeling of unfairness can erode trust and promote a sense of injustice within the organization.
Lingering Resentment Towards Family Members
Perhaps one of the most insidious family business issues is the presence of family resentments that seep into business interactions. As Fredrickson highlighted, individuals may be "...holding on to a family resentment from way back in their lives." These "ghosts of the past," whether stemming from sibling rivalry, perceived favoritism during childhood, or differing life experiences, can cloud present-day judgment and hinder collaboration.
Hill's example of differing childhood financial realities impacting sibling relationships illustrates how these past dynamics can fuel current family business dynamics. The tendency to "keep score," as Fredrickson described, can create an environment where past grievances overshadow present-day business needs.
Why Family Business Dynamics Matter
Ignoring these unspoken issues and allowing negative family business dynamics to fester comes at a significant cost. As Hill warned, unchecked family business conflict can lead to the implosion of the business and the creation of a "very toxic culture," fostering an "us versus them" mentality that can divide the workforce.
This erosion of trust undermines collaboration, hurts productivity, and ultimately jeopardizes the long-term success of the business. As Fredrickson stated, "...most family businesses don't fail or struggle because of a strategy. They fail because of the emotions that are happening between everyone else." This is why it’s crucial to address the human element in family business sustainability.
Strategies for Addressing Conflict
Fortunately, these deep-seated issues are not impossible to fix. There are several practical strategies for navigating these treacherous waters that can help foster healthier family business relationships.
Naming the Unsaid
The crucial first step towards resolution, as Fredrickson emphasized, is naming the issues upfront and speaking the unsaid. Using tools, like guiding worksheets, can be valuable in this process, allowing individuals to confront and articulate their unspoken thoughts and concerns. Moving beyond "buffering" negative thoughts and explicitly naming the issues, such as "I don't trust so-and-so" or "I'm not telling them this because of that," is the foundational step towards constructive dialogue.
Initiating Difficult Conversations
Acknowledging the inherent discomfort in these crucial conversations, Fredrickson suggested alternative approaches to confrontations. Instead of making assumptions and building elaborate negative scenarios in our minds, she advocated for initiating open-ended dialogues focused on understanding different perspectives.
Asking questions like, "What are some of the things that you believe about the future of the business?" or "What do you assume I want?" can foster empathy and uncover shared goals. The aim is to make the "invisible, visible," as Fredrickson put it, by creating a space for honest and curious exploration of individual perspectives.
The Role of a Neutral Third Party
Recognizing that managing the intense emotions often associated with family business conflict can be challenging, both Fredrickson and Hill strongly recommended bringing in a neutral third party. This objective mediator can facilitate fair and productive conversations, acting as a referee to ensure everyone feels heard and understood.
Addressing potential concerns about perceived bias, Fredrickson emphasized the importance of finding a truly neutral facilitator who can guide the process without taking sides. A third party can:
Help manage emotions
Ensure everyone has a chance to speak uninterrupted
Guide the family towards mutually beneficial solutions
Building a Stronger Foundation
The family business journey is often a marathon, not a sprint. The inevitable bumps and challenges along the way can either fracture the foundation or, if addressed with courage and open communication, strengthen it. By making the invisible into the visible, engaging in honest dialogue, and seeking neutral guidance when needed, family businesses can move beyond the pitfalls of assumption and resentment.
At Revela, we believe that by fostering open communication and addressing the root causes of tension, family businesses can resolve conflict and build an even stronger and more unified future. We're dedicated to helping family businesses navigate these complex dynamics. If you’re looking for more advice on managing your family business, be sure to listen to the rest of The Leadership Hustle podcast!
About the Hosts
Andrea Fredrickson
Andrea Fredrickson is a thought leader and consultant at Revela, an organization based in Omaha, Nebraska specializing in the development of leaders, culture alignment, and business strategy for private and family businesses of all sizes. Revela is one of the region's most experienced thought challengers, helping individuals and companies find their greatness. Andrea has built an amazing team by believing that fundamentally people want to be successful and become better versions of themselves.
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Andrea has degrees in education, management, and business. She is the author of Insight Unseen; How to lead with 20/20 business vision. She helps people see things differently, self-reflect, and never stop looking for ways to improve themselves on a personal and professional level. Andrea has spent more than 30 years researching and developing methods to help people communicate and lead more effectively.
When Andrea isn’t working with clients, you’ll find her spending time with her family & friends and making memories by exploring new cities.
Michelle Hill
Michelle Hill is a master facilitator and coach at Revela, an organization specializing in the development of leaders and aligning the culture of privately held and family businesses of all sizes. Revela is one of the region's most experienced thought challengers, helping individuals and companies find their greatness.
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An ambitious leader, Michelle has the natural ability to create forward momentum to build teams and get results. She inspires others to look within themselves and to challenge the status quo. She helps create high-performing environments. Michelle brings a diverse background: operations, employee development, and sales in the steel, hospitality, and consulting industries.
Outside of work, you will see her competitive side engaged in her daughter’s sports and ISU athletics. She loves life, her four-legged companions, and captures all the moments through her camera’s lens.
TRANSCRIPT
Andrea Fredrickson: In this episode of The Leadership Hustle, we'll talk about some of the emotional dynamics that often derail a family owned business. Hello, and welcome to the Leadership Hustle. For executives whose companies are growing fast and need leaders who are ready. Oh, welcome back to this episode of The Leadership Hustle. I'm Andrea Frederickson, and.
Michelle Hill: I am Michelle Hill.
Andrea Fredrickson: And we're here again on. A couple months ago, we started talking about family businesses in some of these episodes. So today we thought we would bring up another topic today, realizing that we work with so many businesses that happen to be for sure private, but many of them end up being family owned businesses. Yes. And so with this episode, um, we're looking at the secrets or actually the stories that people don't talk about that derail businesses. And, uh, this is this is such a crazy topic where, you know, it looks like everything's running smooth on the outside. There's a lot of legacy going on.