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Helping Family Businesses
Prosper Across Generations®

High Cost of Cut-offs

Madison has not spoken with her older brother, Alec, in more than three years. Once, when she inadvertently ran into him at the grocery store, she ducked her head to avoid eye contact and a potentially scornful conversation.

The last time Madison and her brother spoke, he lashed out at her, blaming her for his recent firing from the family business. He claimed that her involvement in his areas of responsibility in the business had led to his dismissal, although other family members had repeatedly assured Madison that she was not to blame.
 
Alec has had a decade-long drinking problem that has worsened steadily over time. Despite involvement, support and encouragement from family members and friends, he consistently refuses to admit he has a problem. The board of directors at the family business chose to ignore his alcoholism as long as possible, but finally became fed up with his missed deadlines and poor performance. Although the board made the ultimate decision to let Alec go, Madison and the other members of the immediate family are continuing to pay the price for the severed relationship and the damaged family business.
 
Family dinners and holidays have dwindled without the presence of Alec and the rest of his immediately family. Interactions among the other family members are often strained. The annual family vacation to the Florida beach house isn’t arranged anymore, and other outings are few and far between. Madison’s children frequently ask to see their cousins, but Madison has decided to keep her family away from Alec to avoid hearing the negative, defamatory comments that Alec continually makes about the family business and about the family members involved in its operations. Both Madison and her sister have been completely cut-off from Alec, and their once-strong relationships are now virtually nonexistent.
 
As Madison contemplates the future of the family business and the future of her children, she wonders how the dynamics of the relationships will unfold. Will her children ever be able to trust Alec’s children in business? Will the severed relationships prevent the next generation from achieving business success?
 
Running a business is difficult; no one will argue otherwise. However, leaders of a family business know that their situation has additional challenges that must be overcome. The above story is just one of many scenarios that frequently occur in family businesses. These scenarios sever family relationships and can often lead to disastrous consequences for the long-term viability of the family business.
 
It is unrealistic to assume that a family will never have a disagreement. Parents, siblings, children, aunts and uncles of different generations have different attitudes and opinions, and newer generations bring new ways to view the world and its challenges. Most disagreements are insignificant and pose only minor challenges within the family dynamics. Sometimes, however, the issue at hand simply cannot be ignored, accepted or brushed away. In some situations, the disagreements are profound. This could include a meaningful dispute that cannot be resolved, or an ongoing issue that remains unaddressed. Among family members, disagreements of this magnitude can result in the severing of family ties between individual relatives or even between entire branches of the family. While this is clearly painful for any family, for a family with a shared enterprise, these ruptures can have profound business consequences, too.
 
When a disastrous argument occurs, a family business must work immediately to attempt to resolve it, promote family unity and give the business the opportunity for continued success. Time and again, family businesses have failed because severed relationships within the family lead to a lack of communication—not only about the problem at hand, but also about business affairs more generally. Maintaining open and honest communication is critical for businesses success, so bridging the communication gap right away is essential.
 
If you find your family is threatened by a profound disagreement leading to a cut-off of one or more people from the rest, take steps to address this as rapidly as possible. The longer each party in a dispute is cut-off from the others, the more entrenched their opinions on the past “harm” becomes and the harder it comes to find a solution that will lead to a healing of bonds. It is essentially impossible to hope to co-manage, or even co-own a business where individuals are not on speaking terms. For the sake of the business, you cannot avoid addressing these hard conflicts—no matter how painful, or insurmountable it may seem. We also hope that in most cases, bridging this gap for the business can also lead to significant reunification between the relatives, allowing the family to continue to enjoy spending time together outside of the office.
 

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