Family firms pose special dilemmas

"Blood is thicker than water." That certainly rings true in many of the 3.5 million family-owned businesses in the United States.

Behind business as usual, there can be daily dramas that make the soaps on TV look tame: Children plotting against parents or other siblings; fathers protecting sons while the business suffers, and nephews and nieces trying to maneuver a piece of the action for themselves.

According to an October 1985 article in the Research Institute of America's Personal Report for the Executive, in fights like these the outside employee is often a participant and sometimes a victim.

However, many of these employees would not change places with their peers in larger corporations. Small family businesses offer the chance to play a key role in the growth of the business. These companies also offer the opportunity to wear a variety of hats while staying close to the bottom line.

John Messervey, director of the National Family Business Council, describes the family-owned business as having different ground rules. "Decisions or made in a more subjective way. There may be no policy manual, no organizational plan. If there is, it's often in the owners head."

The Research Institute report describes an outsider’s progress as frequently being limited. The manager, no matter how valuable, is not likely to be in line for the top.

Sons or daughters who arrive on the scene are "the greatest source of strain for the outsider," according to the report.

The children seldom share the owner’s sense of loyalty to a long-term, trusted employee. Further, the outsider-employee may find himself reporting to the owner’s inexperienced son or daughter.

Things can become sticky if you work for a family-run operation and you find yourself having to work with new family members.

The Research Institute suggests:

·        Evaluate Your Position Periodically, ask yourself: "What is my career path?" If you find yourself reporting to the newcomer, you may want to ask the owner: "Now that your son (or daughter) is here, where do I fit in?" Listen carefully to the answer. Possible changes may be in the wind.

"Talk to others who may work in other small companies. It's important to have a network of people who can listen objectively to your situation. Sometimes you’re in a trap, and you can't even see it," advises one local employee of a family-run business.

·        Remain Neutral. No matter how many times you must bite your tongue, don't get involved when family conflicts erupt. (Remember how it works: You can complain about your own family members, but no one else had better try it.)

·        Act as a Guide. In spite of any outward bluster, a son or daughter is probably concerned about credibility. It's important for the newcomer to feel he or she has a position based on merit, not just family connections.

If you want to help the business- and yourself- take the son or daughter in hand and help the newcomer. If the person lacks merit because of incompetence or simply inexperience, you will do everyone a service by acting as a mentor or teacher.

·        Observation. As an outsider, you can offer much to a family operation. You can provide fresh ideas, objective opinions and needed expertise. "You can be the eyes of the outside world," as one outsider-employee described it.

You can also be a victim. It's necessary to step back and observe the situation with an objective eye. If any blood ends up on the floor, take care that it isn't yours.

Joan Lloyd is a Milwaukee based executive coach and organizational & leadership development strategist. She is known for her ability to help leaders and their teams achieve measurable, lasting improvements. Joan Lloyd & Associates, specializes in leadership development, organizational change and teambuilding, providing: executive coaching, CEO coaching & leader team coaching, 360-degree feedback processes, retreat facilitation and presentation skill coaching and small group labs. Contact Joan Lloyd & Associates at (414) 573-1616,, or 
About Joan Lloyd
Joan Lloyd & Associates provide
FREE subscription to receive Joan's article by email

Email Joan to submit your question for consideration for publication, request permission to reprint an article for distribution, or for information about carrying Joan Lloyd's weekly column in your publication, or on your Internet or Intranet site. Visit to search an archive of more than 1700 of Joan's articles.
© Joan Lloyd & Associates, Inc.