Normalizing Business Problems in Family-Centric Companies is Key to Fixing Them

In our personal lives, it can devastate family relationships when conflict develops between relatives and problems seem unsolvable. We expect our relatives to show empathy, a collaborative spirit and to carry their weight when it’s time to complete responsibilities. One of two things usually happens when they do not: the disagreement becomes a full-blown, emotionally charged conflict followed by an impasse or family members decide to “keep the peace” and avoid all disagreements, causing resentfulness to build. Either way, problems remain unresolved and may even fester into something more significant, leading to a major blowup later on and usually at an unexpected moment.

These same family dynamics can play out in a family-centric business, where work relationships often mirror those within a family. As a result, individuals may approach business challenges with a familial mindset, leading to discord, if not outright conflict, due to underlying emotional complexities. These unresolved tensions can manifest in unexpected and counterproductive behaviors, hindering problem-solving and potentially escalating into crises. Problems may worsen, are glossed over, ignored or become a source of constant conflict.

If this describes your business, take heart. Utech consultants have worked with many leaders in family-owned and family-managed businesses to help them overcome problem-solving barriers by normalizing problems.

What Does it Mean to Normalize Problems?

Every business, regardless of its structure, experiences problems requiring effective solutions. The common business problems are innumerable. They may include cash flow issues, a poor company culture, a lack of planning for the future, a need for technology upgrades, weak brand awareness due to low marketing efforts, labor skills gaps, a talent management system that is not recruiting and retaining top talent, leadership issues, and on the list goes. Getting to the root cause of these problems is important. In the family-centric business, it is not unusual to discover the root cause has to do with family relationships. Problems are not approached as normal business problems but are viewed as a direct result of mistakes and failures of one or more family members or conflicts due to personality clashes, differences of opinion that impede decision-making, a family member standing in the way of progress, and so on.

While conflict is inevitable in any organization, non-family-owned or -ran businesses can often excel at objective problem-solving by separating personal emotional from professional challenges. These companies typically cultivate environments where issues are viewed as normal business occurrences, rather than personal matters. However, given the complexities of the relationships within family-centric organizations, problems are not always views as natural events.

A typical scenario we come across in our work with family-centric businesses is that conflict is taken personally. Problem-solving may come off as blame and finger pointing, which triggers defensive behaviors and ultimately, end communication and may leave people feeling resentful. “If Dad had let me…” “If my brother wasn’t so stubborn…” “Why is my cousin refusing to consider a much-needed innovation…” “Grandfather would not like adding these products…” and so on. Everything becomes personal, which may cause division between employees, family members and leadership, resulting to challenges when it comes to building trust and openness.

One of the biggest growth opportunities for family-centric businesses is to recognize and normalize that problems are typical for any business and should be perceived and managed with understanding. Normalizing problems in your family-owned business means creating an environment where issues and challenges are seen as a natural and expected part of running a business rather than as anomalies or failures on someone’s part. Normalizing problems requires shifting the mindset from denial to acceptance and viewing problems as opportunities for personal learning, business improvement, and strategic growth.

Benefits of Normalizing Business Problems

One of the first benefits of normalizing business problems is that the emotional element of family dynamics is recognized and addressed, clearing the way for your family members to address problems objectively rather than emotionally. Once problems are viewed through a more objective, normalizing lens, your business can experience various benefits.

Enhanced communication – Approaching problems as a normal part of doing business means family leaders and other managers will communicate more often and collaboratively. The goal is to problem-solve, which requires effective communication.
Stronger relationships – When people work together to address business problems, they are more united in a common cause. Oftentimes there may be opposing viewpoints from two people who have the same goal. Aligning to that common goal can help things get moving again. Normalizing business problems strengthens the sense of purpose, duty, and responsibility as a united team.
Proactive problem-solving – Family members deeply understand the business and can solve problems by making decisions based on core values when conflict doesn’t impede the process. When your business leaders are effective communicators and have strong relationships pursuing common goals, problems won’t fester. They are addressed with solutions focused on improving or growing the business. Normalizing problems encourages proactively identifying and discussing issues rather than letting problems escalate.
Increased resilience – Business resilience is the ability of a business to respond to disruptions while maintaining business operations and safeguarding the brand and reputation. Normalizing problems increases business resilience because family leaders recognize the importance of maintaining readiness to respond to disruptions without letting family conflicts get in the way. Resilience is multifaceted. There is organizational resilience, cyber resilience, operational resilience, team resilience, leadership resilience, etc. Normalizing problems supports teamwork that builds resilience in all aspects.
Continuous improvement—Continuous improvement is a benefit of normalizing problems in a family-centric business because problems are seen as learning opportunities, not failures. Family members can objectively analyze issues and develop strategies to prevent similar problems in the future, supporting business growth.
Innovation – Innovation develops from recognized opportunities. Normalizing problems means embracing them as business opportunities for improvement, which fosters innovation. Family members are more likely to propose and implement creative ideas that lead to new business opportunities, better products or services, and business growth and keep ahead of the competition.
Positive culture – A positive organizational culture is crucial to developing and maintaining employee engagement. The organization’s culture is harmed when family members don’t address problems due to family conflicts. The pattern of avoiding tension gets replicated at every level of the organization and employees may feel they have to choose sides between family members. In turn, this impacts the ability to attract and retain talent. When problems are not normalized, employees recognize the lack of family collaboration, especially since the unsolved problems make their work more difficult. Normalizing problems, coupled with effective family leadership, leads to open communication among your business leaders and between leaders and employees, engagement of employees in problem-solving and innovation, and other impacts that contribute to a positive culture.

Measuring “Familiness”

An interesting project explored the “familiness of a family business” to develop a family influence “familiness scale.” The business characteristics of the typical family business were identified and measured, leading to the development of a scale with six factors that are typical areas of influence family members have on the business.

Ownership, management, and control
Proficiency level of active family members
Sharing of information between family members
Transgenerational orientation
Family-employee bond
Family business identity

The scale ratings are meant to capture family influence in decision-making by considering involvement. In the family-centric business, family members “imprint family-specific decision premises into the structure of the business.” Notice a major factor is the sharing of information between family members. How family members communicate is important to business success.

The higher the factor scores, the more the business acts as a family business. However, the higher scores do not necessarily indicate greater business success. This supports the fact that how family members are involved in decision-making and how they communicate influences business success. The business suffers if your family members, due to personal conflicts, aren’t effectively communicating while making decisions or are ignoring problems and avoiding collaborative decision-making with others.

How to Normalize Problems

The process of normalizing problems has many elements. Family leaders should learn to:

Accepting problems that occur is a normal part of doing business.
Create a safe environment for non-judgmental discussions of issues to establish trust and respect.
Address problems without assigning blame to family members, focusing instead on the issue rather than what is viewed as someone’s personal shortcoming.
Adopt a proactive attitude to identifying and solving problems rather than waiting for moments of conflict.
Develop a problem-solving mindset where it’s safe (and fun) to challenge each other.
Establish regular communication among family members to discuss challenges and problems, including structured processes for holding regular meetings.
Promote a sense of shared responsibility, which supports incorporating diverse perspectives and expertise into collaborative efforts.
Build emotional resilience.

Finding Relief with Objective Guidance

When leaders in the family-centric business develop a pattern of avoiding problem-solving because they want to avoid conflict or are busy blaming a relative for the problem, everyone in the business suffers. It is not easy to manage conflict among family members because so many emotions may be involved, including guilt, rivalry, or fear of damaging a relationship, to name a few. Avoidance may seem the best route. “Keeping the peace” is not an effective business strategy.

It takes a lot of courage to overcome one’s feelings, look at the situation realistically and objectively, and embark on a path of change. Because of the emotional aspect of family dynamics, an objective consultant outside the company is often needed to guide the transition. The Utech Group can help your family leaders see that their problems, though frustrating, are common and that they are not alone. Knowing their situation is not unique can bring some relief from conflicts and open the door to business growth.

Utech brings extensive experience working with companies like yours that need assistance. Our experience means we can recognize common patterns, making it easy to diagnose and predict what will happen if the situation is not addressed. Sometimes, leaders need to be told they’re on the right track and given confidence, helping them recognize that business problems and family dynamics are typical, and that positive conflict channeled in the right direction will strengthen the business even more.

Empowering Clients to be Self-Sufficient

It is essential to understand that Utech consultants seek to empower clients to be more self-sufficient and avoid creating a dependency on Utech. This enables your leadership team to normalize problems anytime they appear because you never know when they will develop. Our goal is to help your leaders experience lasting change through leadership development.

If you are ready to build a leadership team that is ready to normalize and overcome problems, contact The Utech Group. We empower the client’s leadership self-sufficiency so the business is prepared to effectively meet problems for business success now and in the future.

With 30+ years of experience, our team of experts is here to help you grow and develop as a leader. If you’re interested in learning more about what we offer, CONNECT WITH THE UTECH TEAM TODAY!