It’s Just Personal; Nothing Business – A Lesson for Family Business Owners

Quote: “No good deed goes unpunished”  – Clare Booth Luce

In the “typical family business,” many of the issues which arise appear to be centered on one common thread; a lack of clear communication.  To illustrate this, I will recall one of the more unique family business problems I was asked to help resolve.

IThe-Godfather-marlon-brando-9109847-1191-842 assume most of you will recognize my “twist” on the famous line from The Godfather.  I must admit, I struggled between this and the famous quote from Clare Booth Luce and decided to sight both.  The relevant background (modified to protect the innocent) is a parent of a very prosperous family-owned business who decided at the end of one particularly successful year to bestow upon his four children an equal and substantial amount of money.  It should be noted that all four were shareholders as well as employees in that business.  So far, so good; so what can go wrong?

The answer is misconception due to poor communication.  While each of the siblings was involved in the business, they all played significantly different roles.  So, immediately, each sibling reflected on what they received and each thought they were entitled to more because they felt their contribution to the business was more substantial than any of their siblings. The infighting began, became very intense and eventually led to the inclusion of the second parent who began chastising the first parent for being insensitive.  (Booth Luce was right!)

Astonished, the parent who gave the money could not believe what was happening and asked me to intervene” to straighten things out as they’re getting worse by the day.”  The solution, though relatively simple, took a bit of time to communicate.  Each of the siblings had interpreted the amount received as a “bonus” for a job-well-done when in fact, it was nothing more than a gift from a thoughtful parent.  While their roles may have been different within the company, as siblings they were on equal footing and thus were given an equal amount of money.  It was personal; nothing business.

In a typical job environment, employees and their bosses are communicating in a bit more of a structured fashion and it is usually clear when conversation is drifting from business to personal topics.  This is not the same in a family business.  It is not unusual for business to work its way into discussions at family events and soon lines get blurred between what is business and what is family.  I think the average family-owned business has to concentrate a bit more to ensure that business communications remain just that and that it is clear when the conversation is drifting to the personal side.  All that was required here was to state the reason the sibling was receiving their money – – it was a gift and this never would have been an issue.  Interestingly, this did have a happy outcome.  The client subsequently put in place some simple position descriptions that helped each sibling better understand their role in the business and so far, that seems to have worked just fine.

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