Crisis in family business – why and how?

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

If you can not do business with friends and relatives - do not do it, it will not be good. Let's take a look at the reasons why many of those who have experienced family business sooner or later come to this conclusion.

Family and organization: the meeting of two systems

When members of the same family start a common business, two systems meet in one place: the family and the organization. The family is the most powerful informal system where members of the same family are connected to each other at the level of several generations, regardless of whether they want it or not. An organization is a formal system where people come together by mutual agreement and agreement, freely enter and leave it. Of course, each of us brings with him to work some attitudes, experience of relationships and partly a picture of the world of his family. Thanks to this, we sometimes behave at work not quite formally - some conflicts with managers or owners remind us of our relationship with parents, one of our colleagues becomes a best friend or sexual partner, and work sometimes replaces life. But while the company and the family are with us in differentpockets”, and we are the only point where two different systems intersect, it is relatively easy for us to maintain a balance, remaining in the family and in the organization a little different people. Thanks to this, we have no difficulty in understanding where the problem is now - in business or in the family. We can more clearly identify the problem, we can use the resources of the system where the problem does not exist, and solve it: consult with colleagues or borrow money for family needs, receive emotional or financial support from the family during a period of professional turmoil. When both family and business intersect at several points (people) at the same time, both systems inevitably experience the most powerful influence of each other, and it is often difficult to understand where exactly the crisis occurs - in the family or in business. More precisely, it is difficult to understand where it began, because when a crisis occurs in a family business, it happens both there and there. Even worse, systems stacked on top of each other can provoke crises by resonating with each other.

Bert Hellinger, the author of the systemic family constellation method, formulated the laws that inexorably operate in family systems. Violation of each of the laws leads to the fact that the system tries to restore balance with the help of diseases, deviant behavior or addictions of one of the family members, the inability to give birth to a child, and so on. As the constellators began to move to the business level, it became clear that in organizations these laws work in some other way or do not work at all. But some work insteadothers.

How the laws of family systems affect business

1. The law of ownership. The strongest of all family laws, meaning that every member of the system has the right to belong to it. This applies to all family members, regardless of how unbearable their actions were for the rest, as well as to everyone who sacrificed something for family members. In organizations, the law of ownership, on the contrary, is one of the weakest and usually only applies to people who have made a significant contribution to the business - usually these are the founders or people close to them in terms of the level of investment in the company. Line employees and even middle managers can log out permanently without devastating consequences. At times, being fired can be a serious he alth-improving procedure for a business. However, if a member of the founder's family works in the company, his dismissal becomes not a matter of business, but a matter of the family and cannot happen according to the laws of the family system. Often this leads to business getting sick.
2. The law of hierarchy. In the family, the hierarchy is determined by principles that many of us would prefer to consider obsolete: the one who came into the system first is more important (the eldest child is more important than the youngest), the woman enters the man’s family system, the new system is more important than the old one (the relationship of children who are married more important than their relationship with their parents). In business, the distribution of power can be more complex, less linear, it is not so much the order that is important here, but the correspondence of authority to responsibility. In the case when spouses are in the same businessor parents and children, the likelihood that the family hierarchy will not match the business hierarchy is very high. If spouses or children prove to be more competent than their husbands or parents, they will begin to take positions in business with more responsibility. As a result, a family member who has taken on more responsibility than is due in the family hierarchy feels dissatisfaction, makes claims to the spouse or parent, and eventually tries to slip out of the business in order to return to the family hierarchy. Taking into account the fact that this is a partner with a stronger competence, the business will inevitably fall into a crisis.
3. The "take - give" law assumes that each member of the system, receiving something from others, must balance it with something that will give. This is not the strongest law in the family system, but it is very strong in formal organizations. Every person in business takes money from their life time invested in the company. If the original contract is respected at all levels (the work done by each employee corresponds to the money they receive), the business is in balance and can move forward, cope with changes in the environment. If the balance is not maintained at some of the levels, then the formal system requires forceful actions on the violator, up to and including dismissal. If this does not happen, the system starts to hurt. We remember that a business owner cannot fire a family member due to the laws of family systems. But that's not the only bad thing. In this case, everything is mixed up: the impossibility of being fired or vice versa, the consent to work for too little salary are perceivedfamily members as a contribution to family relationships. As a result, the balance of "take - give" is completely lost in the organization, the company becomes lame, any changes in the environment can become unbearable for it, there is a high dependence on employees.
4. The law of love in the family system suggests that love should go from ancestors to descendants, parents devote their lives to children, but not vice versa. In business, the energy of love is replaced by the energy of money; it lives according to other laws and requires a serious attitude towards itself. The energy of love, for example, makes you take care of children, who are successfully replaced by employees in business. The energy of money requires priority to the zones that feed the money. Cutting advertising budgets or eliminating advertising entirely in favor of maintaining a payroll is often one of the last decisions before deciding to close a business.

What to do if you are already in this meat grinder?

1. Remember that the laws of the family are stronger than the laws of formal systems. Choosing between family and business, people will always choose family. The best thing an experienced businessman can do is not to put his people in front of this choice.
2. Check what is happening with the hierarchy in the family and business. If the family hierarchy is broken, you need to return to it, even if it will reduce the efficiency of the business. At least it will give him a chance to survive.
3. Find someone not related to the family who will see to it that the laws of money are respected. It can be a good accountant or economist, financial director, and so on, empoweredstop or cut costs. It is ideal to use the services of an external consultant on a regular basis so that he can deal with the impact of the system, not entering it completely.
4. If you decide to take a family member out of business, make sure that at the level of your family the balance of "give and take" is observed. The one who is asked to leave will make a sacrifice and must receive something in return.