Family business issues: Understanding family business issues
Family business issues are often more diverse and complex compared to those in other companies. In family businesses, “business” and “family” are a tapestry where business challenges, personal emotions, family values and vision are all interwoven - sometimes harmoniously, sometimes with vivid contrasts. And of course, family firms still face all the challenges of any business looking for the edge in an ever-changing market. Understanding is the first step to staying on top of family business issues.
Family values & family business dynamics
For family businesses, issues related to values and their affect on company dynamics can be a strong influence. The values of the founders may be the drivers for how the business is run, which in turn reinforces the family values. They can even be glue that holds together an unconventional business model.
But family business dynamics evolve as the family grows and ownership fragments. If different family members bring different understandings of these values, potentially damaging family business issues will arise. When families can tap into the diverse views of different family members, however, the business can grow stronger and respond to new market demands.
Family businesses are potentially more vulnerable at times of succession. Numerous family members in younger generations may be co-owners. Some may want to emulate their forebears and prove themselves as responsible owners who anticipate future family and business needs. But some others may wish to move into new fields of activity. Family legacy and family business dynamics are deeply influenced by these complexities.
Wise family businesses face these family business issues head-on. This includes strategic planning for the family business and a clear family constitution that’s kept current as times - and families - change.
Growth, governance & culture
Issues of growth, governance and culture are key family business issues - affecting both the family and the business. Family businesses succeed through growth and governance changes by having a clear sense of their unique strengths and challenges. They may identify a niche or unique growth plan that gives them greater flexibility in complex markets.
It is also helpful to broaden understanding by benchmarking best practices with leading family businesses. One of the best ways to do this is to seek outside perspectives and expertise. Some business schools offer executive leadership programs built specifically for family businesses. This can provide an excellent environment to review strengths and key challenges, gain new perspectives and build strategies to address family business issues.
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