Analysing My Own Family Business Experience

by Daryl Landau, consultant to family businesses, www.common-ground.ca (my own) and www.coop-solutions.ca (the family's/mother's).
Note:  This was cleared in advance with the family.

To paraphrase that old hair commercial, "I'm not just a consultant, I'm also the product" of a family business.  It's a business that offers public courses in conflict management, and offers conflict resolution services to families and workplaces.  I have been involved in the business for about twenty-five years.  Below I reflect on how my experience mirrors that of many family-owned enterprises.

My mother founded the business. In my teen years, she recruited me to help in her courses. When my father started consulting, it was natural that the two would work closely together.  Around that time, in my mid-20s, necessity and interest led me to follow the same career path and I began interning with them, and in time I joined on a fairly equal footing in the training, and generally an associate role in the rest. 

The reality is more complex than a single enterprise.  I also had (and have) my own business, Common Ground, which my parents never viewed as a conflict of interest.  The same was true for my father.  Also, the mediator training carried on under the main company was really a partnership with other non-family businesses.  However, while these arrangements may have offered greater outlets for autonomy, they did not eliminate the typical challenges of a family business.

Below is the Three-Circle Model, developed in the 1970’s by Professors Renato Tagiuri and John A. Davis at Harvard Business School.  

Applying this to our business:

Family

• Family-Owner-Employee (& Founder):  My mother.
• Family Employees:  Myself 
• My father, as explained, doesn't fit neatly into the owner or employee role 
• Family Owners that weren't employees:  none
• Family Members:  My sister, only occasionally involved in the business.

Non-Family Owners
We don't really have these (but see below).

Non-Family Employees

• Non-family Owner Employees:  These were really partners in our mediation training programs.  They owned their own organizations.  We worked together for so many years that it felt sometimes like we were all part of the same business.
• Non-family Employees:  Here we had my mother's admin assistant, and also the coordinator for our courses.  The latter was managed by my parents.

In recent years, we added Associates for some mediation work.  These were non-family members and me, and we all had our own businesses but also did work under my mother's business.


Now that we know 'who's who in the zoo', let's look at how this model relates to the potentially competing interests of the players.  "Competing interests"...as in conflict?  Surely not, not in a family of mediators!  Well, every family has conflict.  I am past 40 now, and can say that we managed our issues fairly well, and still do.  Still, it was part of the mix along with mutual affection and respect.

How do parents set expectations and evaluate the performance of their children?  Also, what happens to children who want to stay outside the family business?  With my sister, she turned down most of the offers to recruit her into the business.  On ocassion, she and my mother found mutual benefit in her minor involvement, but there was also tension over certain issues (e.g., compensation, commitment).  Sometimes I would hear about it from one or the other - 'triangulation' is common in all conflicts, especially families - and I would often advise that they treat it like a business rather than with the expectations of family members; in other words, without the guilt or requests for special favours.  Easier said than done.  These negotiations illustrate that family businesses can offer mutual benefits, and sometimes the children recognize and want them, and sometimes they do not.

How do you know when your child is ready for responsibility, and how do you instill confidence?  I knew my parents respected my abilities and trusted me, and vice versa, but not in every situation.  At times, the sense I got from my parents was "You are nearly ready, you just nead more x, y or z."  Often I would disagree with x, y or z and feel frustrated.  I also wanted my stamp put on the business.  They usually allowed that, often to discover that the new ways were not always better nor necessarily worse than before.  We struggled at times to find a comfortable relationship of unsolicited (but arguably necessary) feedback and solicited advice or support.

Succession planning is a big challenge with family businesses.  We have taken some steps along that road.  My parents are at the stage of semi-retirement and at the instigation of non-family owners we have plans for more concrete discussions.  I imagine that this step creates some mixed feelings for my parents.  It also created some anxiety for me, and some uncertainty about the vision of the non-family owners/partners.  However, given the key role my parents have in the business, planning can avoid a crisis situation. 

With all its challenges, my family business has been the source of my growth and prosperity.  I could not have found two such mentors anywhere else, nor received such opportunities, security, and flexibility.  In return, I have provided loyalty and valued contributions.  These exchanges and foundations are the raison d'etre of most family enterprises.  Now, given how many family businesses do not survive the first generation, my job is to continue the legacy they provided.