The family-owned business has always played a central role in the American economy — and as part of the American dream itself. According to some sources, up to 90 percent of American businesses are family owned and make up about 50 percent of the U.S. gross national product. They range from mom-and-pop small businesses to Fortune 500 firms.
Family businesses can endure for generations, providing for family and an extended family of employees. They often have high standards of quality and represent the best of American business values.
They also have a unique set of financial and management challenges that occur when business and family issues collide. Fortunately, there are numerous excellent resources that provide keen insights into the challenges of family business.
Family Businesses: The Essentials
By Peter Leach
Beginning with a discussion of why family businesses are special, this book provides a comprehensive look at how to effectively manage this unique type of firm. While some areas such as succession and leadership are part of any organization, there are unique features including culture and values that make the family business particularly challenging.
Family businesses can benefit by having clearly defined values, vision and purpose. Understanding on the part of all the family members involved of the strategic vision of the company can help to build open communication and family teamwork.
The section on the leadership challenge of managing succession is particularly insightful. Effectively planning for succession is often the decisive factor of whether or not the business survives or fails. Only about 5 percent of family firms survive past the third generation.
If you are in a family business or considering one, Family Businesses should be on your reading and reference list.
Family Wars: The Real Stories behind the Most Famous Family Business Feuds
By Grant Gordon and Nigel Nicholson
This page-turner of a business book reveals the great and the gritty of family-owned businesses. It presents nearly two dozen case studies that illustrate the dynamics of conflict in family business.
The melodramas read like a who’s who in industry: the father-and-son conflict of the Gallo wine family; parental oppression of the Ford family; sibling rivalry of the Ambani family. The authors explore the nature of family warfare, the reasons conflict arise and the key dynamics for families. Family businesses may be fatally flawed, the authors suggest, but they are also vital to the economy.
Indeed, the authors suggest that family businesses may hold the secret to one of the greatest challenges in the business world — what it takes to make a large company a small one by building a unique culture. A recent study of S&P 500 companies found that businesses owned by families outperformed those that were not.
Still, family businesses have a dark side. There are special sources of conflict as well as cohesion in what the authors call “gene politics” of families. By highlighting their failures, as well as their successes, there is a great deal to be learned. Conflict is not unique to family businesses, and many of the observations made are applicable to non-family companies.
9 Elements of Family Business Success: A Proven Formula for Improving Leadership & Relationships in Family Businesses
By Allen E. Fishman
Family businesses are different, this book argues. Mix family dynamics with those of managing and leading a business, and you have a unique set of challenges.
9 Elements addresses the “FBLs,” or family business leaders, highlighting how family members can help the business reach its highest potential. It also provides invaluable insights for non-family members working in a family business.
The nine elements are a comprehensive list of the dilemmas of running a family business. Hiring and firing family-member employees, compensation and issues of succession are all given their due.
The author’s discussion into the problems of the family-business owner’s vision varying from that of other family members and employees provides an insightful study of the importance of vision in business. It addresses such issues as how much time the owner should spend working in the family business and how and when money should be taken out of the company by the family.
Family business may have unique challenges, Fishman says, but it also provides opportunities for the owners and their families. Fishman draws upon examples from his own family business, The Alternative Board (TAB), a business peer board and coaching company. The result is an optimistic and insightful look at family business.