How come family businesses are so private?

Business Leader Post, January 23, 2014

Thomas D. Davidow, Ed.D.

A colleague once quipped that all businesses are very private, but family businesses are hermitically sealed. What is that about?

The business is an extension of the family. Consequently there is a very powerful, emotional connection between the business and the identity of the family. We all know that creating a brand is crucial to the success of the business. Family Businesses understand and embrace that concept. They also bring an additional value and intensity to the preservation and enhancement of that brand due to the identification of the brand with the family itself. Families believe that their personal lives also have to be aligned with the same values that their brand represents. This is a good thing: The truth is that the strong values of the family are usually represented in the culture of the business, and that gives them their competitive edge.

As a result, family businesses are loathe to expose and/or discuss their family business challenges for fear that if any difficulty between family members issues leaks out, then the brand will be tarnished, and the image that they have tried so hard to create will be compromised. The reality of an internal struggle can be worrisome for the business and an embarrassment to the family.

However, having a values-driven family and a values-driven business does not mean perfection and will not insulate the family from all the complexities and challenges that families who are in business together have to address. Ironically, the continued denial of their issues and the unwillingness to share them with professionals who might be helpful only threatens all that they value. Strength comes in a variety of forms. One example of strength that is frequently undervalued is the capacity to acknowledge your limitations and ask for help. Unseal the family business dilemma to a trusted advisor. It is the beginning of the preservation of all that you have worked for.