Family owned and operated businesses have been part of the American fabric and are certainly a tradition alive and well in many parts of the world. Knowledge of merchandise or the skills associated with a particular craft are passed from one generation to the next as the elder generation fosters the younger to ensure continuity and success. While all businesses face obstacles, the family-run business is associated with some unique challenges. According to the Family Firm Institute, in fact, only about a third of family businesses will thrive under the management of the second generation. The challenges outlined here are among some of the major reasons why many family businesses have failed and may fail yet if such issues are not effectively addressed.
The Unshared Dream
So often the main issue that a family business faces is that the business is not the family's dream at all but, instead, belongs to just one family member. For that one member, the business is a dream, a lifelong pursuit, and even a passion. Yet to other family members, the business may merely be a job--and one they may not especially like. When the founder relies upon others to share a vision and work ethic they do not have, this tends to erupt into problems. Sometimes this dilemma can be warded off when the main owner allows other family members authentic ownership of their roles. People tend to care more about their jobs when they feel safe to emotionally invest in their work. A tendency to micromanage is almost always a surefire way to alienate other family members, to prevent them from feeling like true stakeholders.
Next week: Lack of Grooming, Lack of Succession
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