Does the business serve the family or does the family serve the business?

August 2, 2015

Thomas D. Davidow, Ed.D.

The family owned businesses that have survived for generations have been those that understand that when they are confronted with a family decision versus a business decision, it is important to do what is best for the business. At the same time, the families that own the businesses and consequently face the risks associated with it ought to have certain privileges or rights due to that ownership/control and risk. Those rights are the same ones that parents have regarding their children. Parents/owners of family owned businesses ought to provide opportunity and support to family members.

How family members respond to that opportunity is up to them. Just as there are no guarantees in life, there are guarantees for success in the family business. We all need to earn our successes. Earned success in the work place fosters self-esteem and autonomy. The absence of those two characteristics frequently leads to unhappiness, which manifests itself in a number of ways, the most frequent of which is failed and/or poor relationships.

Meritocracy has to be the philosophy attached to all aspects of the business environment. Otherwise, you will contaminate the culture of your company, which is frequently the family business’s competitive edge. Giving family members an opportunity to be in the fast track is okay; allowing them to move along that track without evaluation and a solid performance is not. At the end of the day, successful families and successful family businesses are those in which the family's goals/values and the business's goals/values are aligned.

When confronted with the dilemma of pleasing a family member versus making a decision that is best for the business, my recommendation is that you should do what is clearly best for the business. If you don't, you will do a disservice to both.