Family-Owned Businesses – No Such Thing as Typical

Whenever someone asks me about family-owned businesses, I picture a huge auditorium with a banner flying over the stage saying: International Convention of Typical Families. And quietly in the first row ………..two people sitting alone.

Asking someone to describe a family-owned business is like a Rorschach test (what does that inkblot remind you of?) We make all kinds of assumptions about family-owned businesses even when we are an owner of one ourselves! But whether you are part of a small enterprise run out of the spare bedroom or the CEO of a large multigenerational global organization, or somewhere along the broad spectrum in between, FOBs face one critical issue in common. They must ensure positive family relationships while serving the business needs.  

With constant and rapid changes in social, economic, environmental, and geo /political domains, not to mention natural disasters, international conflicts, war, world health crises, and the burgeoning AI industry, all businesses face unprecedented challenges. FOBs face these same challenges along with the extra complication of meeting family needs.

So how does one address this tsunami of issues? How do we manage family relationships in the context of running a successful business? Smaller FOBs certainly face dilemmas; however, issues such as leadership succession, ownership, equity, governance, and long-term strategy become exponentially more complicated as the business becomes increasingly successful and families grow generation after generation.

Sophisticated family-owned businesses frequently bring in experts to help them navigate what can be the treacherous waters of transitions. Depending on the size and stage of development of the business, best practice solutions are available. Still, experts must recognize that there are no “typical” processes for getting them in place. Every business has unique aspects; every family has its own culture and quirks; therefore, there is no “typical” process that applies to all family business situations. 

To effectively manage the thorny issues in FOBs, leaders and their advisors must engage their C2 Factor – the application of profound curiosity and relentless courage. My book, The C2Factor for Leadership, explores how it is the alchemy of curiosity and courage that enables champion leadership.  It describes the many ways that leaders depend on and benefit from strong relationships and how those relationships can get derailed when participants do not oscillate between curiosity and courage.

Two ways outstanding leaders use curiosity and courage to manage the complex interpersonal dynamics in FOBs are: by 1) questioning assumptions and 2) managing conflict.

Leaders must engage their curiosity and question assumptions that family members, advisors, board members may be making about each other and the business. It is easy to assume that because they share a lot of history, the various key figures know and understand each other.

But over time, people’s thoughts and feelings often change.  You may remember the 13-year-old girl who came to her father’s office when you greeted the new Director of Operations. Do you ask yourself what assumptions you may be making about her? Does her age say something about her attitude that you haven’t checked out with her? Are you assuming that her approach to management will be like her father’s?

When did you last have a conversation with various members about their interest in the business? Do they view it as a source of employment, income, legacy, or a combination? What weight do they give to the importance of each? How might they have changed over time? What is their vision of the future? What are you assuming about the CEO’s role in the business once he steps down? FOBs are the only organizations in which at least some of the executives never leave.

Engaging our curiosity about the things we “know for sure” at a minimum clarifies situations and often illuminates unseen opportunities.It can also reveal conflicts that may be lurking in the complicated interpersonal dynamics inherent in FOBs.

Leaders must have the courage to deal with conflicts directly. In order to maintain positive relationships, participants often try to avoid conflict. But avoidance or its related strategy, bullying only drives conflict underground where its influence is insidious.  The stakes are way too high to deal with conflict this way. Especially in FOBs where relationships are personal as well as business-related, conflicts often arise over topics such as executive compensation, the performance of management, and maintaining equity as new generations become adults with varying interests and participation in the business. 

What happens when a CEO doesn’t want to step down, there is no heir-apparent, or competition between family members to be the new leader?  How about when two equal owners have different visions of the future?  Or when there was a personal slight that has crept into the boardroom? Leaders call on their courage to address topics that are the “elephants in the room,” invite differences of opinion to surface and manage conflicts in a way that participants feel respected and relationships are not damaged.

Leaders and their advisors need to be curious about the nature of these conflicts remembering that every FOB has a distinct culture, history, and talent, so they must not default to “typical” solutions.  They must have courage and the ability to manage conflict directly and productively. 

All businesses grapple with maintaining a strategy that is relevant today and tomorrow, succession planning, and executive alignment issues. Qualities in FOBs can make them especially positioned to thrive, but they also have notable challenges. To take advantage of their unique strengths and circumnavigate potential obstacles, the skillful application of curiosity and courage is essential. Fortunately, the C2 Factor can be identified, strengthened, and practiced by those charged with leading.

If you are interested in how the C2 Factor might help you address the many issues in your FOB, contact me at or 301-943-3074.

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