Keeping lines open in family businesses

MANILA, Philippines – Running a family business isn’t easy. Tensions can run high when family members are involved, communication can break down, arguments can form between generations and business fortunes can be dispersed from one family member to another.

According to Professor Joseph Astrachan, executive director of the Cox Family Enterprises Center, with each generation, only 30% of family members stay in the business so by third generation, you’re down to almost nobody.

“If you own a family business, it’s a bit like being royalty. You should have really clear expectations about what the family is and what your responsibilities are. If you choose not to obey responsibility you are choosing not to be part of the family. It’s just a constraint on your being alive,” Astrachan said.

“There are far more opportunities in families for conflict than there are for good relationships.”

The Ateneo Family Business Development Center, together with the Singapore Management University, is holding a series of lectures under “The Business Families Master Class.”

In his March 25 lecture titled “Conflict and Communication in Business Families – from Adversaries to Allies,” Astrachan took a psychological viewpoint. The lecture looked at communication, the number one pillar when it comes to making or breaking family ties.

Becoming a better communicator sets one on a 3- to 5-year journey. It’s something that needs to be worked on in a long, eventual process, said Astrachan.

Here are some necessary conditions for effective communication:

Self-esteem

This is the biggest key to good communication. It’s hard to communicate with someone with no self-esteem, said Astrachan.

If you lack it, everything you hear gets interpreted into a negative angle, then you begin to ask yourself, “What is wrong with me?”

Clear boundaries

Boundaries need to be set. One should know how long a conversation’s going to last, noted Astrachan.

There is also the boundary of place and boundary of topics. It is important to respect each other in this.

Transparent goals and agendas

According to Astrachan, this can be a lot harder to express in family businesses. If you’re upfront with your problems and difficulties, creative solutions can be found.

However, if you don’t tell people what your problems are and what you’re trying to gain, you can’t come up with a solution.

Explicit rules

There needs to be rules in communication. Interrupting someone who’s emotional makes the emotions worse. You need to give people a chance and the time to speak.

Trust

This has different meanings. For some it means honesty, while for others it means telling what they need to know. It may also mean looking out for others’ interests.

“Generosity builds trust, secrecy destroys it,” said Astrachan. It’s not just money and presents you can give to build trust, there are other things like time, care, love, information, and more. But if you hold these things back you will develop an environment of distrust.”

The psychological relationship among different members of the family formed since birth or marriage has a big impact as well in how the family runs as a business.

“Family members are almost never fighting about what they say they’re fighting about,” said Astrachan noting some fights may stem from events and conflicts that happened many years ago.

Emotional dynamics are set by the age of 6 and are formed depending on your relationship with the different members of the family.

For example, if you are positioned as a first born, you often receive a lot more attention, while the second born receives a little less and may become one of these 3 — constant failure, over achiever or problem solver.

Astrachan also outlined how age dynamics play a role in how different generations make decisions. He said adult development follows this structure: 17-28 explore; 29-39 decide, learn and do; 40-50 make mark; 45-55 experience mid-life crisis; 51-62 teach and give back; 63-70 find relevance; 70+ scared to get pushed out.

So when the son is 20-30 and looking to learn, and his father is 51-62 and looking to teach, they get along.

But then the situation changes in a few years: the son is 40-50 and trying to make his mark, the father is 70+ trying to ensure he doesn’t get pushed out. There is conflict.

Other lectures in these series include Family Governance, Successful Succession Planning, Crafting the Family Constitution, Professionalizing the Family Business, and Coaching and Mentoring the next Generation of Leaders. – Rappler.com