Somewhere in the neighborhood of 60% of all U.S. businesses with employees are family owned. About 35% of Fortune 500 companies are family-controlled, and about 80-90% of all businesses in North America are family owned. So it’s hard to avoid them, even though most Americans don’t actually want to work for a family owned business.
What is a Family Owned Business?
A family owned business is exactly how it sounds: it’s owned by a family. But what that means varies wildly. When you hear “family owned business,” chances are, you’re thinking small. You might think of a “mom and pop” shop. You might think of a family owned law firm or a boutique graphic design firm. You might think of my own Business in Blue Jeans, which is unquestionably family owned.
But family owned businesses are also massive businesses as well. Think Walmart, the Mars Chocolate company, and even Comcast (did you know Comcast is family owned? I didn’t! How about that!) Many of your favorite large businesses are family owned.
When we talk about family owned businesses though, and specifically the issues surrounding them, we don’t think about those big businesses. Theoretically, the larger family owned businesses have surpassed the challenges we associate with family owned businesses, though frankly, if you look deep enough, you might still see a hint of them here and there.
For the purposes of this article, we’re going to focus on the challenges surrounding smaller family owned businesses, rather than massive businesses like Ford, for example.
Challenges Specific to Working in a Family Owned Business
Of course there are benefits to working in a family owned business. Even if you’re not a member of the family, family owned businesses tend to treat employees like a member of the family – and the research shows that family owned businesses keep employees on longer, even in tough times.
But there are challenges within family owned businesses that may not be present in non-family owned businesses.
Expect Conflict and Change
In family owned businesses, you can expect that the family patterns will be present in the business, in some measure. Conflict that erupts at home may very well spill over into the workplace, creating chaos and confusion for non-family employees.
During times of generational transition – when elder family members pass leadership on to the next generation – you should anticipate change, as you would with any leadership transition, but in this case, there may be family dynamics at work. We often find that each new generation has something to prove, and the shifts aren’t always in the best interests of the firm. Additionally, on occasion, a new generation of leaders has a sense of entitlement that can lead to an ineffectual leadership style.
The most effective way to deal with this challenge is to be prepared for conflict and change. Learn and understand the family culture and work within it. You won’t be able to change it.
If you find yourself in a toxic environment, however, it’s important to take some time for soul-searching – why did you choose this work environment and why are you staying in it? Remaining in a toxic work situation can mean that you’re working out your own demons and think staying there will help you do so (and sometimes it can), or it can mean that you’ve chosen a dynamic that’s similar to your own family and are recreating your childhood patterns. If that’s the case, you may want to work with a coach who can help you work through those issues and assess your options for the future.
Set and Maintain Boundaries
Often, in family owned businesses, we find that because conflict can spill over from home to work, boundaries are critically important. From the first day, you must establish boundaries in the workplace so you don’t allow yourself to be pulled into any drama. Most importantly, you must maintain those boundaries consistently – don’t allow any cracks in that foundation, because any opening means your boundaries will soon be lost.
Additionally, if you don’t set boundaries from the outset, it’s unlikely that you’ll be able to successful establish them later. Once you’ve opened the floodgates to family drama, you’re in it until you leave the company.
I once coached a CEO who had been brought into a second-generation, family owned business who came into the position with big plans for the organization. Unfortunately, he never set boundaries clearly with the family and quickly found himself embroiled in family drama beyond anything he’d ever envisioned. By the time he came to me, he was so enmeshed with the family dynamics that we realized his best options was to simply leave the company.
From the outset, you must define your roles clearly and address it quickly if the role definitions are violated. You must continuously behave in a professional manner. Never talk about family members to other employees, never take sides, never allow yourself to be deterred from your professional responsibilities by personal drama – these are absolutes and must not be violated in a family owned business environment.
Maintain Confidentiality
In a family owned business, you may inadvertently become aware of privileged information or information about the family. It is your job as an employee to be discrete and professional. Never share secrets or personal information you’ve become aware of through your close proximity to the family!
Just as with any other position in any other business, you should maintain the strictest confidentiality.
Be Prepared to Feel Like The “Outsider”
One of the challenges of being an employee of a family owned business is that if you’re not a member of the family, you may find yourself “out of the loop” occasionally. If you’re not at the family dinner table, you’re probably not privy to the conversations that happen outside the office, and that means you could miss out on key conversations.
Additionally, let’s face facts: the likelihood of becoming the CEO of a small, family owned business is lower if you’re not a family member. That doesn’t mean you won’t be promoted, but your trajectory will likely be different than it would be in a non-family owned business. And even if you become the boss, you might still have to report to a family member owner – that’s when being the boss isn’t quite being the boss (and comes with an entirely different set of challenges all its own).
Know When It’s Too Toxic
While working in a difficult environment can be an excellent opportunity to learn how to manage a variety of personalities and situations, sometimes it’s simply too toxic to stay.
If you’ve been verbally abused or are unable to perform your professional responsibilities due to a toxic work environment, it’s time to leave. If you find your boundaries consistently violated, if you find your energy constantly sucked from you, it’s time to look for another job.
Working in a family owned business isn’t necessarily fraught with problems, even if many people believe that it is. When it is challenging, it can be very challenging, and surviving those unique challenges can be quite difficult. But the fact remains that these situations tend to be the exception, not the rule, when it comes to family owned businesses.
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