In my first post on this issue I said that the reason for exploring family dynamics is precisely because family issues compel business decisions. I just got off an hour long phone conversation with a client regarding generational attitude differences between her generation and the 3rd generation family member employees. The mental health issue that has brought this to the forefront is that one of the G3 family members just admitted himself, at the urging of other family members, into a drug rehab facility.

The unwritten family policy that has been in place for this family (because they’ve been through it before) is that the business will pay for one round of drug rehab. So several family members from two generations got together to discuss the importance of making sure that the family member is in the right facility, because he’s only got one shot.  This policy, however, was unwritten, never discussed, and has never been agreed to by the family. So generational attitude differences came into play. G2 believes this is a one shot deal and if the family member doesn’t get clean, he’ll no longer qualify for employment in the family business. G3 feels differently about the employment part. These attitude differences are primarily due to naïveté and lack of maturity, but also illustrate differences in morality standards between the generations.  G3 also doesn’t seem to understand that family policy is not about regulating morality, but about protecting the business, or the “golden goose.” 

I’m constantly preaching the importance of family governance because governance mechanisms are the only sure-fire way to navigate the family business balance. Family business is an oxymoron. Family is an environment of unconditional acceptance based upon who you are, while business is an environment of conditional acceptance based upon behavior. Family policies play an important role in providing governance that will protect the business from out of control family members.  Family policies need to be discussed, debated, negotiated, defined, documented, and agreed upon by all family members. This process is the only way to facilitate bringing generational differences closer together. 

 Sign up for our monthly e-newsletter to stay informed on how to overcome related succession planning issues.