Do you want your family business to be Succession or a success?

masterclass, family businesses, consultancy

Small business accounts for around 98 per cent of all businesses in Australia, and it’s estimated that 67 per cent are family-owned.

While the pros of working in a family-owned business are many, familial dynamics can also create unique tensions within a business. You only need to watch an episode or two of the hit drama Succession to see how dysfunctional a family business can be when it’s driven by sibling rivalries, quarrels over business direction and a tyrannical founder who plays his children off against each other.

While Succession sits at the extreme end of the family business scale, it reveals some of the common pitfalls and problems that can affect family-owned and operated businesses.

Ironically, some of the key reasons disputes arise in family businesses are the same reasons why family business can be so successful.  

We know our family intimately, their likes and dislikes, strengths and weaknesses, we’re loyal to them and we usually like being around them. Conversely, because we know them so well, this means we also know how to push their buttons, and can use that knowledge to manipulate situations and outcomes. And because of our shared history, there’s often baggage and unresolved issues. Sibling or parent/child rivalry is also an issue in some businesses as family members battle for ascendancy.

There’s also the risk of generational conflict, with children and parent founders often sharing different opinions about the business, or disputes arising about how decisions are made and how the business is managed.

And there are regular disputes over succession – who takes over after the founder retires? When is the right time to pass over the reins, and how will succession happen?   

If a family tries to solve internal conflict or disputes themselves, it’s often not a smooth and productive process, which is why many family businesses use external specialist mediators or consultants to help them to work their way through some of their thornier issues.  

Often a mediator can work with people in a family-owned business and help them to develop options, discuss how things might work and make agreements that can guide a family business though some of the most common and serious issues it will face.

Mediators are perfect to engage for family business disputes, as they have no skin in the game, no prior knowledge of family dynamics and can dispassionately and impartially facilitate agreements without any conflicts of interest.

The process of engaging a mediator isn’t difficult, but for the mediation process to be successful it’s important to get everyone in the family to agree to the process.

It’s also important to choose the right mediator for your family business, and there are specialist family business mediators who have experience in certain industries and sectors, like retail or agriculture which means they have more intimate and detailed knowledge on how to navigate some of the common issues.

If you have a Logan Roy in your business, or siblings squabbling over who does what and how, and it’s negatively impacting your business and relationships, a skilled mediator can make all the difference in how your business operates.

Put simply family business mediation can help create a lasting business legacy that stretches over generations.

So, ask yourself…do you want Succession or success?