The article below was featured in the Jan/Feb 2022 issue of Family Business Magazine
It’s an honor to be part of a family business, especially a multi-generation one. However, when emotions and family dynamics bleed into operational objectives, it’s easy to lose sight of that honor and the rare opportunities that come along with it.
While many might bemoan the common threats—such as business alignment differences and evolving roles/responsibilities—these challenges are really a chance to strengthen the organization and the family relationships.
Business Needs before Family Wants
One of the biggest sources of conflict for many family businesses ties to company growth and profit distributions.
Our philosophy at Goodfellow Bros. is to put the needs of the business first. We believe we have a responsibility to ensure that our people and their families are well cared for and are a part of an organization that can thrive from one generation of ownership to another. They are counting on us to make good decisions so they can be successful in their lives, therefore it is paramount that we make decisions in the best interest of the overall organization first. It’s one reason why only family members that are directly involved in the business have the opportunity to purchase voting shares. We want to make sure that the decision makers are intimately involved and understand the challenges that our business faces—that knowledge will allow them to make better business decisions for the benefit of the family and the business.
That said, there are successful family-owned organizations that see the business as a family asset and have shareholders that are not directly involved in the business. In these cases, it is critical that there is clear communication about the needs of the business so that all shareholders fully understand the reasoning behind key decisions that will affect the distribution of profits.
No matter your philosophy, the common denominator in successful family-owned businesses is a defined mission that is aligned for business success. In my experience, when family members deviate from that message, and start to put their wants ahead of the business needs, trouble soon follows. Alignment for business success is an opportunity to strengthen the organization and the family.
Conflict and Conversations
A second challenge—or opportunity—in a family-owned business is often conflict resolution.
At some point in every business, there’s going to be disagreement about company directions—and in a family-business, those challenges can be magnified due to familial relationships. While a corporate run operation might be able to sweep conflict under the rug, family operational issues extend far beyond the workday, which in turn, force difficult conversations and can build a stronger company mission.
For my immediate family, we use well organized, fun and focused family meetings to communicate about each family member’s holdings and financial standing. I speak from personal experience as it’s been a blessing to work with my father and uncle for many years. We don’t always agree, but we respect our roles of authority, appreciate each other’s viewpoints and are hyper committed to the success of the company—and the family as a whole.
Turning conflict into opportunity, in my experience, requires clear boundaries. For instance, as a multi-generation family, there’s often a desire for family members to offer advice to employees outside their responsibilities. While well-intentioned, these actions can impede on another family member or employee’s role in a way that can be detrimental to the organization.
At Goodfellow Bros., we have defined and documented roles and responsibilities to help family members stay in their lane—and every once in a while, it is good to pull out those documents to revise as family members’ roles change.
Another lesson learned is that whenever possible, it is best to not have one family member reporting to another. We’ve found that reporting to a non-family member is a great way to learn and also helps non-family members feel more connected to the company.
Family-owned businesses can intensify succession struggles and role conflicts—but these scenarios are also opportunities to strengthen your organization. Many people would much rather work for a family over a corporation, which helps us find and retain talent. As an owner, we are fortunate to have a family business and it is critical to remember that many people would love the chance to be in our shoes.
Across four generations, we have learned that a clear focus on honoring the vision of our founders and defined roles/responsibilities will strengthen our organization…and our family relationships. It’s not an easy path, but the rewards are clear. Turning challenges into opportunities gives way to solid family relationships, satisfied employees, and a business built for longevity.
By Chad Goodfellow, CEO of Goodfellow Bros.