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Solutions for Family Business Problems:
Five Questions to Ask

by Jane Hilburt-Davis

The ability to think and act systemically is critical when working in and with family businesses. Systems theories have originated in several disciplines including mathematics, anthropology, physics, and social psychology, among others. Failure to understand and apply systems concepts is a real competitive disadvantage for family businesses and the professionals who serve them.

Thinking systemically:

  • prevents confusing the symptom with the problem

  • provides a crucial link for integrating the family relationship and business strategies

  • builds on what is healthy in both the family and the business

  • uses "high leverage" points for positive lasting changes, and

  • suggests dynamic and creative ways to deal with obstacles.

By asking the following questions when faced with a problem in the family and/or business arena, you can begin to think in systems terms. If you cannot answer these questions, you risk working with incomplete data and making the problem even more complicated.

(1) What is the real problem?

Very often what people describe as the problem is only the symptom. Worded another way: presented problems are rarely the real issue. And, if you focus on the symptom without uncovering the real problem, you are wasting your time and are bound to fail. A doctor does not only treat the rash, but conducts a series of tests to find out what is causing it. That is exactly what you must do with a presenting problem in the family business system.

To get beyond treatment of the symptom, take a series of steps to uncover the real problem. These steps include hearing all sides of the story, getting family members to talk together in a safe, structured and neutral setting, and keeping all options open. The focus for treatment is the underlying structure, the patterns of communication, and conflict management. The goal is to strengthen the system to help it solve its own problems, and improve the bottom line.

(2) How long has this problem existed?

Problems manifest themselves in three ways: (a) same old stuff; (b) something brand new; and (3) same old stuff in a new package. If the symptom has persisted for a long time, it reflects a deeper problem embedded in the system. It cannot be dealt with until the underlying patterns and structures that produce it are carefully considered and addressed. If the symptom is new, with a short history, deal with it first. In short, thinking systemically requires an appreciation of behavior patterns over time and across generations.

(3) Is the problem related to some "unfinished business"?

All living systems, including individuals, families, and businesses, go through life cycles and crises. Each stage in the life cycle of a business and of a family requires certain tasks; each crisis requires increased communication and effective action plans for the family and the business to grow and move forward. The term used by systems consultants is homeostasis when referring to a system's ability to stay balanced, while also being able to respond to an ever-changing environment. All too often problems are the result of avoiding the communication and tasks that are necessary to move to the next stage. Each change in a system produces disruptions in patterns. If emotional processes aren't managed during such disruptions, the negative effects may be felt over time and over many generations.

(4) Where is the most energy for change?

Energy in systems terms implies possibilities for change. Two things to discuss: How does the energy present itself and what does it look like? It can come in many forms-anger, excitement, frustration, enthusiasm, pain, or a combination. Where is the energy located? It can be in a person of authority, formal or informal, in a subordinate, in an alliance among members of the family business system. Your chances for success are obviously greater if the energy for change is with a person in a position of formal authority. Often, however, with succession issues, the motivation for change is in the succeeding generation, which is highly motivated and without much formal authority. Understanding how the whole system works and appreciating the concept of leverage can help you or your client use tools to create changes that are positive for the family and the business and get a "buy in" from both
and the business and get a "buy in" from both generations.

(5) Does the problem serve a function? If so, what is it?

Problems often play important roles in systems. A classic example is "scapegoating" or "dumping" problems onto a person or group of people. Usually, if one person or group is frequently blamed, the first question to ask is does he/she deserve this. If the answer is "yes", then the work is with that person. If the answer is "no", then the work is with the system. Then ask: what would happen if the scapegoat were fired or cut off from the family? Would the problems remain? There are many reasons for scapegoating but the most common in family business systems are unresolved conflicts, work avoidance, and denial of important business decisions to be made. In short, the question becomes "who can we blame" rather than "how can we fix this?" Problems are powerful forces in systems and can play a useful, if sometimes destructive, role. Do your homework. Be prepared for the fallout if the problem is removed without repairing the underlying structure.

In sum, problems often don't get the respect they deserve. They usually play important roles in families and in the work place and are windows into solutions. Ask these critical questions, before you rush in to fix things.


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