What can keep the healthy relationship of the family? What values, legacies and traditions do we hold dear as a family that we embrace, that we can always look back so that we gravitate towards each other, to keep us united? How do we define our “sense of mission” as a family in business together?
It is very important that the family members are guided to go through a deep understanding, group reflection and open discussion on the above questions. Most family members are not comfortable discussing openly these highly emotional questions. Either they are in denial or they cover up the true state of their family relations, claiming that they do not have serious problems. Others who crafted their Family Covenant of Family Constitution have expressed disappointment that most of the family members do not uphold their agreements. In most cases, their Family Covenant were academically prepared and they failed to go through the exercise above that well.
In my previous article entitled “The Future of the Family Business,” I mentioned as a guiding framework the three pillars as core foundation of a sustainable business endeavor. I will expound the first pillar as the anchor of sound business practice among the family-run enterprises.
First pillar: Healthy family relations among the owners
In a conference among the members of the Philippine Franchise Association and with franchisors, I shared some insights that in order to “Build and Sustain a Win-Win Franchisor-Franchisee Relationship,” they have to recognize that Family Governance and a healthy family relations among owners is an essential foundation of a sustainable franchise business relations specifically among the family-run enterprises. This is a new dimension outside of the usual conference topics.
In that conference, I emphasized that as a family enterprise, they should manage internally their family dynamics as they cannot build healthy and win-win business relations with their franchisees, clients and even with their own managers if among owners they have deep conflicts against each other.
The same rationale caught the interest of some multinational companies confronted with disruptions or limitations of growth due to the internal issues of their distributors. Banks are likewise concerned; their interest is to help their clients achieve growth and sustainability of their family business.
Dysfunctional issues of the family can break the business. Related to this, the major breaking points of a healthy business relations are triggered by dysfunctional issues within the family (owners).
In my work as a famcor and franchise management consultant, I have seen some of the breaking points why business relations turn sour. If your company is starting to experience these, I suggest that you take a serious decision to get help:
- Personal conflicts among owners. Most often, conflicts among family members had deep emotional roots since childhood, past hurts and parental dysfunctions.
- In several instances during the exclusive family workshop that we conduct, the most potent reflection question that often create a stir among family members pertains to expressing love to each other… “How do you express love in the family?”
- Three out five families that we help are not expressive in their love for each other. They keep their sentiments and resentments but grumble against each other. By the time a critical situation tests them, a small matter can break what was seemingly just a peaceful relationship.
- The manner of upbringing and traumatic experiences during childhood sometimes surface in their behaviors during the board meetings. Great ideas are often blocked because it came from a sibling that the others have resented against. Worse, non-family member managers witness the calisthenics.
- Business accommodation for the family
- In some cases, incompetent and/or pampered members of the family are accommodated in the business or are given concessions in the business, e.g. maybe as a special supplier or franchisee.
- The “COO” or “child of owner” and his feeling of “entitlement” as a family member, even if they do not have the competence most often cause demoralization among the more competent non-family managers.
- Ownership and control struggles
- Polarization of families especially among the cousins or even among siblings become imminent when the founder or leader dies or retires.
- When this happens, there will be factions and most often, managers and franchisees try to align themselves to the side sympathetic to them. Competition of control and ownership eventually happens.
- Owners lack the sense of professionalism and the effort to be professionals themselves
- While they demand performance among the professional managers that hire, their sense of professionalism are almost nil. They cannot even read financial statements.
- Worse, they do not see the value of the contributions of their managers but they assume that their managers are lucky to be employed and that they have no better options outside.
- Absence of competent and dedicated successor in the family. Conflicts and confusion brew when the family anoints a successor, by virtue of his family name, despite that he is not competent, worse, is not focused or dedicated in running the business.
The approach we use in helping family businesses vary and are often not taught in business schools. To a certain degree, some reconciliation, healing and ministering sessions are done capped with a very meaningful prayer. However this approach depends on the readiness and openness of the family members.
(The article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines. The author is President of Famcor Franchise Management and Executive Development Corporation. Feedback at firstname.lastname@example.org. For previous articles, please visit <map.org.ph>.)
Source: Business World
Famcor is the pioneering business consultancy in Cebu that specializes in long-term hand holding programs such as preparing family businesses for expansion through franchising. Beyond the common practices of today’s business consultancies in Cebu and other regions, it is Famcor’s thrust to ensure a proper franchise growth from start to finish. Let’s talk about growing your business. Leave us a message at email@example.com!
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