Ensures business continuity.: Preserves family harmony:. Protects wealth and legacy.:

Together you can make it or break it! Yes, it is the reality of every business family. In this world of internet, it is easy to get information about what is family business and what are its challenges. You will come across topics which are commonly discussed & addressed as challenges in family businesses!

The issues like Communication, Managing Trust, succession planning, wealth management in family business, role of women in family business, leadership in family business and on and on and on. Wealth of knowledge is available and even few educational institutes have started giving inputs in their courses.

My point is if you are in family businesses you must know what it is and you should know how to deal with situations having dimensions beyond logic. 

Think it as a pack of wolves, a social animal! who lives and hunts together! Caring more about the pack before catching the prey, sometimes rejecting/sacrificing the opportunity of hunt over safety and future of their family members. 

Isn’t it similar to most of the business families? Many times, sacrificing the business opportunities over safety of family wealth and lifestyle. Understanding this situational and visionary decisions of our family business leaders is what expected from each one who’s emotions matters a lot.

Taking excessive calculated risk, delay in decisions making and conventional thinking sometimes create a generational challenge. Emotion and economic are pillars and YES, when it comes to family business management, I have written it in the correct sequence of their priority. 

Having said that every generation is working with some unwritten rules. sounds like coordination and understanding but sometimes very difficult to live with.

In the current business scenario where business model is changing faster than speed of light, I think I must include those challenges in family businesses which are critical for business and family. In this information jungle, let’s try to find out a road which may be less travelled but worth exploring. Identifying root cause is something I learned and practiced for over 24 years in my consulting practice. 

If the business model is changing it is not because of the way new generations wants to work. It is because of the expectation of present customers. Changing rapidly and more demanding. 

To cope up with this every business must understand that yesterday’s performance is not going to be the criteria for success. It can give you some support but performance is to be in present term and should not only be the past experience. Living in the past glory is what is been observe in many family business owners.

Though we share same blood line and DNA, by nature we all can have different view point, which should be respected. A more matured approach towards other family members views or perspective helps us to think rationally and to avoid dispute.

In my observation, in any family decision making meetings, whether the issue is about business or family the real issue never gets addressed based on the merits i.e. for understanding net consequences. When equality, position, experience is being challenged with a note of sarcasm in the voice, immediately disagreement becomes dispute. 

Expressing emotions in a correct frame is a challenge for most of the family business owners. Sometimes too emotional or too practical. 

So when next time you sit for a family meeting, just focus on addressing the issue collectively rather than giving your verdict. Yes, it is applicable to every one irrespective of experience, age and position.

The way we communicate with each other as a family member in family and business situation is been watched. Watched by everyone who is directly or indirectly related to us and our business. 

For me to define family business in one word is “Complex”. It is not because of the industry in which they work or the culture of the family that leads the business or the knowledge and entrepreneurship of family members.

I believe success or failure happen in a family business because of team work or lack of team work. Together you all can make it or break it! This is why every business family should have clear understanding about each team members or future team members. 

Root cause of many family business conflicts are mainly lack of understanding of who they are and what they are. Success or continuation of family business largely depends upon the clarity to family members where they stand in their family business. 

If you are clear with your role, responsibilities and ready to follow pre decided rules, it becomes easy to pass on the batten to next generation.

Although there are many challenges a family business faces in different circle of responsibilities, my immediate objective is well focused to accomplish an important document “the family constitution”. For this to happen our approach towards it should be that we not only need to address the challenges but to anticipate them, surround them and deliver sustainable solutions.

One of the core challenge of family businesses is its continuity. Experts have published data on this.

The key for business success and continuity is good governance. Purpose and ethical principles (mission and value) statements can provide a strong base and guideline to build a healthy family relationship with active communication and trust among family members. Based on this positive culture, Business families can build good governance, which can be controlled under the guidance of family business board.

The biggest nightmare for many family businesses is, its generational Business continuity. The key responsibility of family business leader is to turn this worst nightmare into a dynamic road map for business continuity.

After survival and growth, the challenge of lasting the business for generations need to be addressed more systematically and also legally.

I do agree that emotions play important role in family business but along with emotion we have to think of economics and endurance also. Else the continuity or even survival of the business will be at stake. 

Unlike the business challenges in 80 and 90’s , the current generation of family business owners are well read and well informed about the challenges . be it related to business and family. A decade ago, professionals were reluctant to work for family owned organization's. For various reasons. Was finding it difficult to work in a family owned business as they fear of becoming victim of nepotism. 

In order to make a family business successful, every generation must understand and act based on the future needs of business as well as the family who owns the business. Ideally the focus of the business and family should be to fulfil each other’s needs. That is to make the business capable of satisfying family members financial and emotional needs. In case of most of the family businesses the biggest and the longest investment they are doing is in their own family business. Then don’t you think it is extremely important for every generation leader to keep family members financial position safe and secure? This will happen only when each member is emotionally connected with the products, the team members and the philanthropic activities. The truth is no one will be loyal without emotional connect. Moreover, family members should feel proud to be part of the business, happy while working together and there should not be fear of conflict while spending time together.

Almost 80% of businesses are family owned and managed irrespective of the status. Be it sole proprietary or large organization. Undoubtedly playing an important role in the economy. This makes it more important for the government to create favorable environment for the family businesses. For this reason the key role and responsibility of family business owners to work ethically ,professionally and most important profitably  to contribute in overall economic growth and develop.

After working with many business families, for me, family business in a structure where almost all the decisions are controlled by owner or owner family members. Many times, emotionally. I can say emotions and economics are pillars of family businesses. Family culture of the owners is having high influence on the business. Observation is that the culture of business and family in many cases are almost same.

In my experience most family businesses and the family members mirror the values and nature of the founder. The reason for this could be because the founder plays various roles in his business journey. The key milestones according to me are Identifying a market opportunity and starting a business, Growing the business and building an organization with loyal team members, when day to day business operations are run by non -family members guiding them, Introducing family members and relatives in the business and guiding them to lead some functional responsibilities ,planning for next generations role as Business leader. The Lead role is normally given to sons, daughters or family members involved in the business.

The interaction of family, their style of managing business and ownership can create unique competitive advantages. The key factor here is the harmony of family members who manages the business.

I came across different type of family businesses. Few are family owned , most are family owned and managed , very few are family owned but managed by professionals. Based on the active involvement and vision of the business, the type changes. The family decide and guides the organization for vision, strategies and policies. Finance decisions are controlled by the family or the founder.

The entrepreneurial spirit, flexibility, and opportunism make it more attractive to younger generation and inspiring to be part of the story.