{"id":3941,"date":"2020-10-01T17:13:00","date_gmt":"2020-10-01T17:13:00","guid":{"rendered":"https:\/\/fusionwm.com\/?p=3941"},"modified":"2022-10-12T17:18:52","modified_gmt":"2022-10-12T17:18:52","slug":"a-formula-for-thoughtful-decision-making-in-a-family-business","status":"publish","type":"post","link":"https:\/\/fusionwm.com\/a-formula-for-thoughtful-decision-making-in-a-family-business\/","title":{"rendered":"A Formula for Thoughtful Decision-Making in a Family Business"},"content":{"rendered":"\n
\"A<\/figure>\n\n\n\n
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Conflict has sunk more than a few family businesses over time. To avoid it as much as possible\u2014and navigate it when it inevitably rears its head\u2014owners of family businesses need to adopt a thoughtful, calculated approach to decision-making.<\/p>\n\n\n\n

To see why, consider one story of a patriarch who runs a company worth north of $300 million. Seeking to involve his sons\u2014both of whom were senior managers at other firms\u2014at a high level, he offered them senior executive positions in the company and positions on the firm\u2019s governing committee. They accepted.<\/p>\n\n\n\n

But problems soon arose as the sons\u2019 expectations and interests clashed with the patriarch\u2019s and with each other\u2019s. The three family members began subtly sabotaging each other\u2019s efforts, resulting in the business suffering weaker financial performance. Within a few years, it was outright war\u2014with the sons openly fighting with their father, each other and the company\u2019s top brass.<\/p>\n\n\n\n

Ultimately, the situation became untenable. The father, after reaffirming his love for his children and his deep concern for their welfare and future, banished them from the business. They were no longer involved in any way with the management of assets or any other aspect of running the operation.<\/p>\n\n\n\n

The result: In less than a year, under the sole direction of the patriarch, the company was once again doing extremely well. But the rough road could have been avoided with some thoughtful planning and expectation-setting in advance.<\/p>\n\n\n\n

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Being thoughtful<\/h1>\n\n\n\n

There are many ways to handle conflicts among family members involved in a business. For some successful entrepreneurs, interventions led by family business coaches are successful. Different forms of conflict management consulting services can be used. The patriarch in the example above obviously went in a different direction.<\/p>\n\n\n\n

But whatever the specific situation, if you want to have a very successful family business, the answer is often taking a calculated approach to decision-making.<\/p>\n\n\n\n

You need to look at business decisions through the lens of your family values and beliefs as well as your obligations (as you see them). To accomplish this, it is very important that you be able to step back and appraise situations, people and other factors nonjudgmentally to derive a workable solution.<\/p>\n\n\n\n

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Values and economics<\/h1>\n\n\n\n

You have to take a lot into account when making decisions affecting your family, your wealth and your business\u2014especially when they\u2019re all tied together. What\u2019s more, the emotional connections with family members can override your best financial and strategic business abilities.<\/p>\n\n\n\n

The key to thoughtful decision-making is to understand how your values impact your decision-making concerning your family business along with your ability to consider the economics of a situation\u2014and to then balance values with financial implications.<\/p>\n\n\n\n

The following formula puts thoughtful decision-making into perspective:<\/p>\n\n\n\n

Family Values + Calculated Economics = Thoughtful Decision-Making<\/em><\/strong><\/p>\n\n\n\n

Let\u2019s look at each component in more detail.<\/p>\n\n\n\n

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1. Family values<\/h1>\n\n\n\n

There are some classic family business concerns that successful entrepreneurs often experience\u2014such as balancing family priorities, issues and interests with business considerations. Family values and intent are typically built into the expectations for the company and those running it.<\/p>\n\n\n\n

Certainly, a core asset of family businesses is very often the family itself\u2014and children can be great sources of strength and creativity. However, there are times when family bonds can prove detrimental to the success of the company and the harmony of the family. If these matters are not capably dealt with, the business and the family will continue to suffer.<\/p>\n\n\n\n

We often see two scenarios in which children can be detrimental to the success of a business.<\/strong><\/p>\n\n\n\n