Leave A Legacy: Avoid Risky Business

October 24, 2015 02:31 AM
 
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All family businesses have conflict.   How a family responds to conflict is usually the marker between success and failure of the business. Hoping the conflict will go away or waiting for death, divorce or the economy to resolve issues rarely works. However, confronting the issues even though it’s hard work can lead to a stronger family and healthier business.

If you’re in succession transition or starting a family business, it’s essential to spend time and effort confronting the issues and locating their source. As family members work together, they often experience angry outbursts, long silences, poor communication or awkward family gatherings.  

These behaviors are only symptoms of the underlying issue, much like ice seen floating on an ocean is only the tip of an iceberg. What is below the surface is the real danger because it’s much bigger, more powerful and, most importantly, not seen or expected. If families focus on the source of the issues, they can begin to find resolution and move forward.

To help identify the source of the issues, it’s useful to frame the family business as a system, with many of the same characteristics as an ecosystem.  The family business system, which is interconnected, interdependent and interactive, has three primary elements: personal relationships, financial decisions and power structure.  

When there is a significant change in any one of the three primary elements, there are reactions in the rest of the system. If the source is broken relationships, the family needs to talk about their differences and begin to mend bridges. If power struggles are strangling the business, clarify roles and responsibilities and start the succession planning process. If financial decisions are causing the conflict, the key managers and their advisers need to start intentional strategic planning.  

The goal is to find balance and harmony among relationships, finances and power. A few families are able to hold family meetings to identify and resolve the problem. Unfortunately, most families just ignore the issues and let them build below the surface until catastrophe occurs. Other families wisely ask a third party to facilitate the discussion so all family members can jointly identify the source of the conflict and equally and fairly participate in finding the solution. 

The family who avoids dealing with the issues is involved in a “risky business” while the family who decides to confront the issues is creating an open and honest legacy for the future. How will you and your family business respond to conflict? 

Attend a Legacy Project Event to Put Succession Planning in Motion

Farm Journal Legacy Conference
Nov. 17-18, Indianapolis, Ind.  
This event will dive into the details of creating a sound succession plan, increasing family harmony and managing legal and tax issues.

Legacy Project Workshops
These trainings help families begin the process of transitioning their farm to the next generation. 

  • Dec. 8 in Dallas, Texas
  • Dec. 9 in Little Rock, Ark.

For more details and to register, call (877) 482-7203 or visit www.FarmJournalLegacyProject.com

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