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University of Massachusetts Amherst

Family Business Center

Family Business: Eagle or Albatross?

by Ira Bryck

Many people are astonished to learn that over 90% of American business is family owned, assuming that large corporations could not be so "mom and pop," meaning so "un-professional." Interestingly, when I ask business people if their company is a family business, there is often a long pause, while they consider if working with relatives, frequently co-owners, qualifies them for that status. Others respond "and how!," referring to the continuous quandary of how to perform professionally when family rivalries, assumptions, pecking orders, and communication failures muck up their growth and daily operations.

A certain "Mr. Green," not his real color, who attended a UMass Amherst Family Business Center dinner forum commented: "It felt good to see how together we are. More than those other guys." Indeed, any thriving third generation company should be proud of past successes and whatever planning and strategizing has been accomplished. Especially after hearing a particular speaker who frankly chronicled his unfortunate family blowout that attracted significant media attention.

In a recent discussion with "Mr. Green's" adult child (if anyone knows of a better term than adult child to describe an adult child, please call 545-1537), I was told "one of the problems in our company is my father thinks we have it together." "The Kids" have many unanswered questions about how to rise through the ranks of the company, how to break through the ceiling of assumptions ("the way it's always been done") and who will be the next president of the company ("why does it have to be a choice at all?"). The list, as usual, was not short.

It is a hectic age. In spite of the theory of "work smarter, not harder," most people work incredibly hard, and find it incredibly hard to take time "out" for strategizing, communicating, and setting up the structures and systems that could improve many a cryptic management style.

Another of our sessions featured a pop quiz to determine how family business members viewed their interactions and communication methods in the business. One business person commented that the test was faulty, because the "right answers were so obvious." For instance, who would not know that the CEO should not be arbitrary and totalitarian? Who would not know that all adult children should not be paid equally? Who would not know that family members not-in-the-business should not own voting stock?

Among most family members, though, there was great disparity in the answers. One sibling thought a presidency could/should be shared; another thought it was unworkable. A parent thought all children should own stock; working adult children thought it was unfair. The disparity among family members was the wrong collective answer.

Are there definitive right answers? Experts agree: NO. What works for the Browns won't necessarily work for the Greens. But you have to hand it to those Browns; they take a lot of time to think about and discuss the systems and structures that work for them. They insist on regular family meetings. They broach uncomfortable topics that verge on taboo, and hired a facilitator to support that discussion. They agreed that nobody works in the company without an advanced degree; they intervened on the brother with substance abuse; encourage non-family members to work their way up to the top.

They approach their family status as an eagle, not a albatross. Their ability to fly is no accident.

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