What does the term “boundaries” mean in family owned businesses?

Business Leader Post, December 4, 2013

Thomas D. Davidow, Ed.D.

Family owned businesses suffer from the absence of boundaries. The best example of this absence is that family members are judged/evaluated not only on their performance within the framework of the business, but also on how they “perform” or interact with other family members.  That kind of overlap may seem grossly unfair.  However, you can never separate out performance on the job from interacting with other family members—ultimately, one kind of performance does affect the other and fair or not, the overlap has to be addressed. The first step is to create more structure within the organization.

The absence of boundaries or structure takes many forms: Family members walk into each other’s offices; or they call each other at all times of the day and night, including weekends, to discuss both family and business matters. There are very few, if any, formal meetings; and there is very little respect for privacy between and amongst one another.

The business becomes the extension of family life. Within the business, the family adopts the interaction and communication styles that the family had when everybody was growing up together. Symbolically and in reality, the family continues to share the same roof over their head, the same bathrooms, etc. Consequently, there are many conscious and unconscious cues. In the beginning, that is all part of the fun; and the lack of formality can have its strengths in the family’s ability to address issues quickly and concisely.

However, it can get old pretty quickly.

So the question becomes: How do you deal with it? Again, the growth of the business and the stress on family relationships require structure. The family needs to discuss and develop more formal approaches to how they do business. There are many simple rules and formal structures available. For example: business meetings; formal evaluations for business performance; becoming conscious of concentrating on business discussions during business hours and personal discussions after hours.

If you are having trouble implementing these structures and formalities, call a consultant. Calling a consultant early in the process will help you change things. Waiting until the lack of boundaries creates stress and conflict means that the consultant will have to fix and then facilitate change. That is more expensive and more painful.