May 18, 2020
Article
Harvard Business Review (website)

Create a Culture of Generosity and Communication in Your Family Business

Format:Electronic

Abstract

The phrase “family business” is made up of two very different words: “family,” which calls to mind warm, fuzzy feelings around love, joy, and support, and “business,” which is measured in money, profits, impact, and assets. We put the two words together, and often, use business measurements to put rules in place for the family. This is a recipe for failure. Splits and disputes occur often, even in families with well-laid-out constitutions and rules. When the business grows and “success” in monetary terms starts flowing, family issues frequently start increasing. And while money is often assumed to be the major cause of the rifts in a family, because it’s something that’s measurable, the softer side of generosity — the accommodation of others’ needs, wants, and desires — is just as important. That’s why family businesses need to create a culture of generosity and communication — to keep a family and a family business together. It is essential to encourage openness to dialog of all kinds, on a regular, on-going basis. If a family business is to survive for the long term, family members need to be able to address difficult issues. It will help to ensure that when the inevitable crisis hits, neither the business nor the family will implode.