The Complexities of Family Business Systems

By Nina Kaufman, Esq.

Have you ever known a family that doesn’t have a fight . . . about something?  It could be about “who’s hosting Thanksgiving,” “who slighted whom,” or “how to run our business.”  In his article, Resolving Disputes in Family Businesses, David Gage points out that:

A family business is really three distinct but intricately related systems: Family, Business, and Ownership. Part of each system is separate from the others and part is bound to the others. Conflicts can occur in a non-intersecting area, e.g., a family conflict unrelated to the business, or a problem in the business concerning non-family employees.

In other words, untangling a family business dispute is like business partnership disputes–only exponentially more complicated.  Think of it like 3-D chess: you may know how the pieces tend to move, but there are many more layers to playing the game well.

And it’s so easy to put a foot wrong, when you add family relationships (and resentments) to the mix.  Just look at the example Gage gives of giving an equal share in his business to his 3 children.  You’d think that fair’s fair, right?  Wrong.  Another reason to get an outside pair of eyes to give you objective feedback on your succession planning.

Many thanks to Marian Banker for pointing this out to our Successful Business Partnerships LinkedIn group!

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