For example, an employee cannot be expected to work 

 as hard in the enterprise as somebody who is also an 

 owner and a family member (sector 7). If you need 

 your employees to work 150% for some time or if 

 overtime is necessary, you have to provide incentives 

 for them to do so. Actually, there are business owners 

 who give their most important employees access to 

 shares of the enterprise to overcome this problem. 

 Employee owners belong to sector 6 of the diagram. 



On the other hand, family members, who are not 

 part of the business or owners, might not understand 

 how you can spend so much of your quality time 

 working on business issues. Family crisis might be 

 caused by not being clear about the different levels of 

 involvement and the consequences thereof. The 

 classical in-law scenario is based on this conflict: a son 

 or daughter not yet owner of the parent's business is 

 spending every weekend working there, not to speak of 

 the rest of the week, the long hours, and the number of 

 times he or she misses the common dinner or the long 

 awaited theater evening. The outside working spouse 

 will not tolerate this situation forever. 



Conflicts are Unavoidable 



Potential conflicts can be eluded or solved more 

 easily when you clarify everybody's position in the 

 overlapping circles. Take two brothers who have 

 inherited the business from their deceased father. One 

 has never worked there but is an owner now. He is in 

 sector 4. His brother is the manager and also owner. 

 He is sector 7. The non-employee brother wants to get 

 some dividend out of his ownership. The managing 

 brother wants to invest in new state-of-the art 

 equipment. Both had difficulties understanding why it 

 was so hard for them to agree on the right course of 

 action, because they had always been very close. 

 Seeing the rationale behind their different interests 

 made it easier for them to find a solution that did not 

 hurt their relationship. 



Family and Employees 



Another area of challenges for family business is 

 sector 5, the overlap between family and business. 

 Facing the decision about which family members 

 should work in the enterprise and which will do better 

 somewhere else, can be a very difficult situation for the 

 business family. Employee owners (sector 6) can be 



rather resentful about family members being drawn 

 into a business with what they perceive as minor 

 qualifications. They like to see the best person hired 

 for the job. They are afraid of someone coming in with 

 special privileges but without special skills. 



On the other hand, for many families it is part of 

 their culture and philosophy as a business family to 

 have as many family members as possible working 

 together in the same enterprise. One of the benefits of 

 all the hard work in a family business is the chance to 

 work together as a team with the people you trust and 

 love. Sons and daughters growing up involved in the 

 business are not just other employees.. Ideally, they 

 have been part of the business and contributed since an 

 early age. They know the ropes from youth and have 

 learned the trade very thoroughly, in a way that can 

 hardly be achieved by someone from the outside. 



Certainly, the ideal is not always realized, and 

 sometimes the employees' fears of another family 

 member stirring things up are well grounded. 

 Therefore, if you want your children to grow up to 

 become employees, managers, and at some point 

 owners of your business, you will have to prepare for 

 this early on. Start letting them share what is going on 

 at an early age. Let them participate in decision 

 making at the level they are at. If you keep the right to 

 make final decisions until the very end, they will not 

 grow up to be the managers and owners you want them 

 to be. 



Family business succession is a long-term project. 

 It starts when the family is still young and might not 

 even be in control themselves. With their parents 

 planning to hand over control to them, they might 

 already begin to share it with their own youngsters. 

 This IS a difficult step to take. 



For the sake of the family, the employee, and the 

 business, aspire to define everybody's role in the 

 family business. As long as the family member is an 

 employee, the "chain of command" has to apply to him 

 or her, the same as to other employees. The wages 

 have to be fair depending on work done. No extra 

 dollars for family membership. If someone in the 

 family needs more money, look for other ways to do 

 this: a loan, dividends based on ownership, or a 

 different higher paying job. However, it can hurt your 

 business to base promotion on family membership. 

 You might lose your best employees if they feel they 

 will not be promoted or they are doing the less 

 interesting jobs because there is always someone 



48 



Fruit Notes, Volume 66, 2001 



