Three Examples of How a Business Solution Resolved a Family Crisis

Posted by Rock LaManna

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If you are part of a family business, then turmoil in the family means turmoil with the business.  Most of these conflicts are emotional, which is why you can often turn to a business solution to restore harmony to your organization.

Tom Hubler, the LaManna Alliance’s family business specialist, notes that when there is good family chemistry in a business, “it can go right to the bottom line.”

But what happens when the families are in conflict?  How do they resolve issues and move forward?

In these three examples, you’ll see how families used a business solution to turn things around.

1. Solving a Father-Son Conflict

A father-son real estate business looked ready to prosper.  The father had recruited his son, who had left for college and a job in the corporate world, back into the business.  The goal was to have the son eventually take control of the operation when dad retired.

It sounded like a great plan, but once the two began to work together, things started to head in the wrong direction.

The two discovered they were not in alignment on a number of fronts. The father’s tolerance for risk was much less than his son’s.  He also didn’t understand why his son wanted such a large compensation package, when he himself had built the business with far less money in his pocket.  The relationship rapidly deteriorated.

Fortunately, the two reached out for outside help.  A board of directors was put into place, and an outside consultant came in to help them create a new business plan – one that would appeal to both father and son.

Working with the consultant, the team was able to create an innovative new approach for the business.  They then moved onto the operational structure, developing a fair compensation package for the son, and shifting the father’s focus from the day-to-day operations to the new business architecture.

Sadly, the father died a few years after this restructuring.  But because of the new approach, the business remained prosperous and continued to grow.

2. Clashing Siblings at C-Level

In another family-owned business, a brother served as CEO and a sister as the Director of HR.  Friction arose when the sister’s performance became subpar.  

Once again, the family looked outside the family for a business solution.

It came in the form of a business coach, who worked closely with the daughter to improve her performance.  Eventually, she was reassigned to a different area of the company.  Not only did it shift her to a position in which she felt more comfortable, but it also created some distance between her and her sibling.  Since that realignment, the company has done extremely well.

3. Re-Focusing a Patriarch with Declining Skills

As Valerie Harper recently said, “We’re all terminal.”  It’s a fact of life that some of us accept much easier than others.

Family patriarchs in particular seem to struggle with their own mortality.  Fiercely independent, these proud entrepreneurs often continue to work at the business, even when their skills are no longer tuned to the marketplace.  It’s like the pro athlete who keeps playing, even after his physical skills have waned.

In this case, a father known for being a savvy business-man and a terrific investor, began to lose his Midas touch.  His recent investment deals had gone south, and they were putting considerable strain on his son, the CEO of the company.

Not only was the father proving to be no longer fit for such business ventures, but the son – a salesman at heart – didn’t have the interpersonal skills to resolve the crisis.  

Once again, the family focused on restructuring the business to resolve the family conflict.  The father was given a finite amount of capital to invest in, and oversight was tightened.  The son was reassigned to another business development role in the company, and his brother took the reins of CEO.  Soon growth resumed, and the business was back on track.

Making it Easy to Agree

In all three cases, the reason for the family conflicts was because of the business.  It seems only natural then that a business solution would resolve each particular issue.

What’s important to note was that in each case, the members of the family agreed to the resolution steps put into place.

This was not the case for another family business, which did not enjoy the success of the three families described earlier.  

In this example, a brother-sister team had differing opinions on how a business should be run.  The organization’s success had been spearheaded by the mother of the family, but her health had declined and she was no longer able to lead the charge.

The siblings could not agree on the next steps for the business.  The conflict raged for years, with neither side willing to budge.  Eventually, the business was split into two companies.

Could the brother-sister team have come together if they’d resolved some of the emotional issues?  It might have made compromise easier, and allowed them to move beyond the conflict. 

The failure of the brother and sister illustrates a key point:  A business solution can be used to resolve a conflict.  However, the family needs to be willing and able to accept that solution.   It’s not easy, but the change could be the only thing that can save the business, and perhaps even the family.

Photo by: Victor1558


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Topics: Family Business, Strategy