Blood, business and breakdowns: Fixing communication in family businesses

Many family business owners come to me and my team with the request to professionalize, future-proof and grow their business. But often, they forget an additional crucial element in the business equation—communication within their own family.

Even though most families think they communicate pretty well among each other, once you dig down a little deeper there are many skeletons in the closet, resentments, no clear communication and huge potential for improvement.

Communication in the family has a direct impact on profits in family businesses where family members play an executive role. This is what most family business owners fail to see. This is why my team and I often end up not only optimizing the business, but also the communication within the family itself.

The challenge of blurred lines

Family businesses are unique in the sense that often, family members are both family and executives. Emotions come into play that in a nonfamily business setting would not even matter.

The overlap between family and business roles often blurs lines, leading to unique communication challenges. This is why effective communication is the cornerstone of success in family businesses.

In many family businesses, the distinction between personal and professional roles becomes muddled. This overlap can strain relationships and create communication barriers. For example, siblings who are business partners may struggle to separate their professional disagreements from personal relationships.

One of my clients, a wealthy Asian family with six siblings, was run by a family head who suddenly left the business and gave it to one of his sons. The son had been introduced to the business years ago and had occupied some minor functions but had no real experience fulfilling the role of the president.

Losing connection

As a consequence, he felt a bit lost and had to work his way through the maze because his father was not even present to mentor him through the transition. A tough job for the son, and very atypical because most often founders have a hard time letting go. Not in this case.

This journey to become a topnotch CEO in a short period of time toughened him up, but it led to an alienation from his siblings. A lot of them were not involved in the business and just saw him as the cold and tough CEO, no longer as their brother.

The ones who were involved in the business still got into a lot of quarrels with him. When the father approached me, he had two requests—if I could help him to optimize the growth of the business and future-proof it, and to establish lasting peace between the brothers.

Solution: Family-only time

The brothers in the family business above lost all connection as brothers when doing business together. This weighed heavily on their relationship and we had to reestablish their communication to optimize profitability in the business. Now they could tackle challenges head on together because they were finally communicating openly again.

If you are an active member of a family business, first of all you have to realize that you have two roles—the one of a family member and the one of an executive.

As a family, you can minimize your quarrels and maximize business efficiency by actively scheduling “family only” time with the other family members. This means that all family members who are playing active roles in the business should get together for “nonbusiness” gatherings to just enjoy each other’s company. This is vital. No business should be discussed.

This will take care of a lot of tensions and restore bonds that are usually forgotten or at least suffering when it’s “business only” all the time. To counteract this, it’s crucial to set aside “family-only” time. This dedicated time allows family members to reconnect on a personal level, strengthening bonds and improving communication.

Another one of our clients is a wealthy US family where four out of eight siblings play an active executive role in the business. When we held a workshop together to improve family communication, they confessed that they could not remember when they had last met as a family where business was not discussed in one way or the other. It is common. But you must go against that grain and establish family get-togethers where strictly no business is discussed.

Solution: Regular family huddles

Another effective strategy is to hold regular family huddles. These meetings provide a structured opportunity to discuss important matters, address challenges and ensure everyone is on the same page. By fostering open dialogue, these huddles can help resolve conflicts and align goals.

Family huddles are regularly scheduled meetings, set at a consistent time, such as weekly or bi-weekly, much like standing meetings. Consider them a Swiss Army knife for optimizing internal communication. Often, family members assume they’ll naturally talk enough, but the reality is different.

For instance, one client experienced resentment between siblings in leadership roles because the younger brother, who held a vice president position, felt unheard by his CEO brother. This lack of communication led to conflicts that spilled into the boardroom, affecting the family’s reputation and productivity.

Similarly, in another family business with eight siblings, unresolved issues had persisted for over a decade. Our workshop provided a safe space for open communication, allowing a sister who was the head of production and her brother, the CEO, to resolve a long-standing conflict that resulted in a 17-percent productivity increase.

Solution: Trusted external advisors

In my experience of running workshops and intimate sit-downs with families owning family businesses and large conglomerates, I’ve found that trusted external advisors can be incredibly valuable. While many families believe they communicate openly, our extensive experience shows that only about 3 percent truly do. This lack of open and sincere communication is a natural byproduct of running a family business because the lines between family and business roles blur.

External advisors act as mediators, creating a bridge for open dialogue and addressing issues that have been swept under the rug. The impact isn’t just about achieving a “Kumbaya” family harmony; it leads to better business outcomes and stronger family ties.

For example, an Asian family among the 10 richest in Asia holds regular meetings to discuss every issue until resolved. This practice ensures not only better business operations but also reinforces family bonds. By addressing challenges openly and sincerely, family members can strengthen their roles as both executives and family members, fostering a resilient and united family business.