One of the most powerful challenges in family businesses is managing the naturally occurring tensions between the family and the business.
Wise families know that the answer to this dilemma is to not choose one over the other, but to insist upon the primacy of both.
In a previous column (“Mastering Family Business Polarities”), we explored ways that successful family businesses manage polarities. We’ve distinguished between polarities and problems. A problem has a solution—for example, where to build a new facility, whether or not to hire a new COO, how large a line of credit to seek from the bank. In contrast, a polarity has no solution, it can only be managed. Managing polarities is challenging because they are comprised of two, seemingly opposite poles that can only be managed, not resolved.
For many decades, we’ve known that families tend to lean towards being either family first or business first. We might describe these tendencies as follows:
In our work with family businesses, it has become clear to us that successful businesses seek to gain the advantages of both family-first practices and business-first practices. They do not allow themselves to be forced into choosing one exclusively over the other, but instead find ways of honoring both approaches. In fact, they redefine the landscape, no longer asking “Which comes first?” but now asking “How can we care for both family and business?”
Successful family businesses instinctively realize that choosing either family or business is not wise. They appreciate the power of both family and business factors in making the difficult decisions that face them every day. In fact, they recognize that strengthening family leads to a stronger business, and vice versa.
For example, when the owning family carefully articulates and communicates its guiding principles and values, it equips the business leaders to create a focused, unique set of business strategies. And, when the business leaders create systems clearly grounded in performance and accountability, it makes it easier for the family to make a longterm commitment of tangible capital support and intangible stewardship support for the enterprise.
As with all polarities, what at first seems to be an opposing pair of irresolvable conflicts is soon discovered to be a complementary set of opportunities that contain the seeds of excellence. Wise families know that the key to managing this challenge is respecting and including both options, and they actively pursue that path.
The first step in managing a polarity is to fully understand the upsides and downsides of each option. A polarity map can help with this understanding.
Polarity Map©: Managing the Family/Business Challenge
Greater Purpose: Family and Business Success
Thanks to Barry for his input on this article. “Polarity Map© 2016 Polarity Partnerships, LLC (www.polaritypartnerships.com), All Rights Reserved” as well as “Polarity Map® and Polarity Management® are Registered Trademarks of Polarity Partnerships, LLC
Deepest Fear: Family and Business Failure
This general polarity map can be used as a starting point for developing a map for your family business. The map can be used at a high level to address the overall business philosophy or it can be applied to a specific business issue, such as employment or compensation policies or vision and strategy development.
Drafting a map together as a group allows the family to discover imbedded assumptions about how the family and business should be run. The polarity map allows families to identify and discuss points of disagreement in a neutral, non-judgmental manner. It can also be used to identify opportunities to balance polarities and improve the outcomes for both business and family.
In a future article, we will apply a polarity map to family compensation to demonstrate how the tool can be used to articulate family and business philosophy.