The Challenge of a Family-Owned Business

The Challenge

George’s high productivity got stopped dead in its tracks. His mother was demanding meeting after time-consuming meeting over the details of how to renovate their new facility. George was making a major expansion in his family-owned business. He was adding a new home care division. The expansion was consuming much of his time. Now mother was telling George what bids to take and what contractors to use. And of course, all those meetings ate up his precious time.

George needed additional funds to make the new change. Mother was one of the big investors. Now mother had taken her position as a major investor as permission for her to tell George what to do.

George was in a quandary. Mother was undermining his authority as CEO, interfering with his decisions and wasting large amounts of his valuable time. Furthermore, he wanted a high quality facility, not a cheap one that his frugal mother was bent on providing. What was he to do? He couldn’t fire his own mother – could he?

It was a tough decision!

Finding A Solution

Confused and anxious, he discussed this challenge with his coach. During this discussion, it became clear to George that George had allowed his mother to overstep the boundaries of an investor. Most investors do not have oversight to the running of a business. Their role is passive.

George realized he allowed this to happen when he accepted his mother’s offer of help. Mother had offered to help George renovate the new facility. This “help” turned out to be like a lifeguard hitting a drowning victim in the head with the life preserver he was throwing to the victim. This could not go on. He could not afford the time and he wanted a high-quality facility – not the low-quality his budget minded mother wanted.

The first thing he had to do was to confirm that it made good business sense to fire her. Secondly, he had to know in his heart that he had the right to do this. He conferred with his brothers and sisters who supported his decision. This would be harder than it was the time he fired his nephew four years ago.

He was naturally nervous about confronting his mother. Although he was now a grown man, he had a long childhood history obeying his mother. He certainly did not want to hurt his mother’s feelings or cause dissension in the family.

It would be a delicate conversation. Rather than demanding or pleading with her, he decided he would ask for her help in solving this problem.

George role-played with his coach the intended conversation. Using principles of assertion, George practiced with his coach until he felt comfortable.

It worked like a charm. His mother turned the reins back over to him without a tear or a reprimand. George was in charge of his company once more.

Other Dilemmas

Running a family business has many advantages. Your relatives are usually much more dedicated and loyal then an outsider would be. However, there are dilemmas, like the one I just described. A brother may just not have the necessary skills required.

A sister may think she has a free ride in the family business, hurting the business by drawing a high salary for inferior work.

Just like any business, to succeed in this competitive environment, you need to have high quality, competent and motivated workers. They have to be in a job that matches their skills. Sometimes your relative has to be disciplined or even fired. This is especially hard to do to a family member. It is extremely difficult to be objective about family members. The cool objective eyes of an outside consultant or coach can be a huge help.