A principle I’m reminded of on a daily basis is: “It is far easier to get entangled than it is to get untangled.” If you’ve ever tried to unravel a tangled up web of string you know what I’m talking about. Entanglement almost seems to be an effortless exercise whereas untangling can tax even the most patient of personalities.
To those of you who are wrapped up in complicated circumstances rest assured there is hope, your situation can be untangled. For many of you, you’re facing circumstances that you may have seen coming. If so, I suggest putting boundaries, guidelines, and rules in place so you avoid repeating history. Most often, if you take a look out onto the horizon, you can indeed see it coming.
For example, let’s assume a situation where a business is owned today by 2 or 3 siblings. By a combination of luck, respect for one another, and giving one another the benefit of the doubt, the siblings have figured out how to run the business together. But, just a short distance into the future, there are 8 or 9 next generation family members in various stages of their development. With 100% accuracy, I can predict at least one of them will come knocking at the door for a job. Yep, it’s coming. The good news is that you have time to prepare for it.
You might think of boundaries as guardrails. Guardrails keep you from driving your car off into the ditch or wrapping your car around a tree and becoming entangled with it – at least that’s what they are designed to do. Likewise, there are guard rails that you can implement in your family business. These rails are designed to prevent complicated entanglements. What are some of those guardrails?
The first guardrail is to establish the appropriate business structuring for succession. The second guardrail is to define covenant expectations for family member employees that address unreasonable and mismatched expectations. Then address family business employment policies, and also governance mechanisms such as: a board of directors or family business councils. These topics will be addressed in the next articles.
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