A Note on the Dynamics of a Family Business

Eric Miller, November 1999.

Introduction

In 1957-58 I worked with a Tavistock Institute colleague, the late A K Rice, in the first stages of a consultancy to a substantial family business, which dated from the 1870s. It had been inherited by the then head of family in 1895, when he was still a minor, and it included three companies. Under his leadership the companies prospered and later he made his wife and eight children partners in two of them while retaining control of the third. From 1940 onwards, when two sons and a daughter became progressively more active in the business, there was a sharp increase in growth and also diversification. Non-family members began to be appointed to run some of the smaller companies. By 1957, marriages and grandchildren had enlarged the number of family shareholders and the variation in the size and range of individual stakes. Between them they owned or had a significant holding in more than a dozen companies, two of them very large. Major investment decisions were still being made by the head of the family, but he was working to pass on responsibility to the next generation. At the same time the three active offspring themselves, who were by then chairing substantial businesses, experienced their authority as fuzzy. When other members of the family, including their father, offered comments, suggestions or advice, it was never clear how far they were doing so informally and interpersonally or as co-owners of the business. The outcome of the consultancy was the formation of a holding board, consisting of the family shareholders, for the management of investment. The board’s role was to discuss and agree strategies and investment plans for the business. Authority for the management of operations was delegated to the family members and to the two or three non-family members in charge of them.

Rice continued to do some work both with the board and with one of the companies. He also wrote up an account of the consultancy as a case study for inclusion in a forthcoming book, The Enterprise and its Environment (Rice 1963). However, the family vetoed publication and the book appeared without it. When Rice died in 1968 he had almost completed a short book on family businesses, in which the particular case was disguised, but even so some family members feared recognition and withheld permission. In the meantime, some work began with other family businesses, one being a quite substantial intervention, and we were able to draw on these as well for a more general treatment of the problems faced by enterprises of this kind (Miller and Rice 1967, Chapters 9 and 10). I have continued to undertake projects in this field while maintaining occasional contact with the original client. A possible further consultancy with that client in the 1970s fell through at the last moment. Subsequently, the business expanded still further into a substantial conglomerate, but the family had also expanded, with another generation added, and became increasingly divided. The group’s flagship company was wound up after failures in management. The rest was held together for a while by the survivor of the two sons, but disintegrated when he died.

In 1996 I was able to undertake a study of the processes of the rise and fall of this business over the 40 years – almost a post mortem – to see what lessons might be learned. The limited aim of this short paper is to offer reflections and to distil some hypotheses from our experience of this and other cases in which we have been involved.

The obvious and crucial complication in the family business is that the individuals concerned have roles and role relationships in two systems: as members of the nuclear or extended family system; and as owners and/or managers and/or dependents in relation to the business. Arising from these ambiguities there are various dynamics and processes that often lead to breakdown. Rice and I have argued that if these are anticipated and recognised and appropriate actions taken, the potential damage both to the family and to the business can at least be reduced, if not eliminated.

This paper starts from the simplest case of the business run by the head of a family without members’ involvement and proceeds to explore progressively more complex situations.

I am indebted to Rice for many of the insights here and have included some quotations from his unpublished material.

Dependency without Participation

At what point does a business set up by an individual justify the term “family business”? Or, to put it another way:- If a parent is the main provider of a family’s income, does it make a difference if he/she derives this income from running a business or as, say, a salaried manager or professional? A critical variable seems to be the family’s exposure to risk. In today’s economy the probabilities of loss of a job and of failure of a business are much the same for both these conditions, though the employee usually has the buffer of a redundancy package. The risk for the entrepreneur and the family increases substantially if there is capital locked up in the business venture, with perhaps a mortgage on the house. It is a risk that the spouse and, as they grow up, the children will be aware of. They may defend against it by denial – a denial that is easily sustained while the business is prospering – but nevertheless it tends to generate in the family a greater dependency on the entrepreneurial parent as someone with the mysterious, magical power to generate wealth. Such dependency may be a mask not only for the anxiety that the business might fail, but for resentments. This seems to be more complex than the common resentment towards the busy executive who never has time for the family. In that case there is an external company on which to project destructive feelings of anger or jealousy. But the entrepreneur’s business is almost part of the family – an additional sibling, as it were – so that to destroy that would seem like destroying the family itself.

No Separation between Family and Business

At the other extreme survival of a business relies on full participation of the family. Examples are two local shops both run by Asian immigrants from West Africa. At the chemist’s the father is a pharmacist and the wife and daughter work with him full-time in the shop. Whether voluntarily or involuntarily, the daughter, now about 40, has never married. She feels trapped. The parents are aging; the business cannot afford a salaried assistant; and so the shop depends on her for survival and she on it. At the newsagent’s the daughter is younger. When not at school (latterly college) she has worked in the shop at evenings and weekends. Will she still be there 20 years hence? Presumably in both cases the families could choose to sell out, but commercially neither would be an attractive proposition to a purchaser needing to employ labour: the pharmacist’s daughter does not have to be paid the statutory minimum wage. Beyond that, family and business relationships seem so inextricably intertwined that it may be difficult to imagine the one system surviving without the other.

Such family systems are examples of small work-groups in which roles are not predetermined but emerge and evolve to use the strengths and accommodate to the weaknesses of individual members. That in itself makes it more difficult to recruit outsiders even if they can be afforded.

Family Members as Employees

Between the two extremes outlined on the last two sections is the situation in which one or more family members take positions in the business alongside external employees. This may begin and end with “helping out”: the spouse making up the monthly accounts and doing invoicing; a teenage son acting as an office-boy in the school holidays. Particularly in the type of Asian family described above this may be a taken-for-granted element of the family culture. In other cases it comes out of invitation by the entrepreneur, volunteering by the family member, or a combination of the two.

This is a significant process because it marks a sense of shared ownership – not financial but psychological – and shared responsibility. It is important in demystifying the parent’s work. Fantasies are tested against the reality. The primitive, childlike dependency on a magical figure is replaced by a more mature relationship. Family members continue to be financially dependent on the parent and the business, but now they can see much more clearly what he/she actually does and can evaluate his/her strengths and weaknesses. It is also more important because it raises or begins to highlight questions about the long-term future of the enterprise when the founder retires: will it be sold or will it be passed on within the family?

Another threshold is crossed if one of the offspring becomes an employee. The processes through which this happens will have long-term consequences for the relationship with the parent and often for the business itself. Not infrequently the eldest son, for example, is either coerced or at leased feels he has no option. Resentful dependence almost inevitably follows – and unlike many other employees there is no union he can join to channel his resentment. Most probably he will be in an isolated position in the workplace, or at best in a phoney inclusion with other employees, who do not trust him. And he will probably take his problems “home to Mother”, thereby building up tension in the family.

Relationships will be much healthier if the parent invites, or the son/daughter offers, and there is an informal process of contracting, in which it is not taken for granted that the invitation or the offer will be accepted: there is a choice. New family members entering a business in this way tend to take up their roles with a greater sense of authority. The less ambivalent and more open relationship with the parent-cum-boss probably reduces – though rarely eliminates – isolation from fellow-employees.

The latter mode of entry may also diminish – though, again, seldom abolish – the perennial issue for these sons and daughters:- Am I good enough? Would I have got the job if it weren’t for my parentage? And the parent too may have doubts about their competence. This is often the first point at which the demands of the business are compromised by family loyalties. Perhaps the only way of mitigating these doubts is for the offspring to prove themselves in another company before they join the family business. Otherwise doubts will persist and, especially if never discussed, will to some extent infect relationships within the family. And in relation to the business, the notion of employment being a duty or a right does not promote a culture of competent performance. Conversely it is a tribute to the culture of the business if family members are in demand for jobs elsewhere and feel they have a real choice between joining and staying.

In practice, however, that choice is seldom as free as it may appear. It may be complicated by feelings of loyalty and obligation to the founder and successors; by anxiety about accusations of betrayal if one leaves; or a worry – realistic or not – that the business may go downhill without one. Implicitly, if not explicitly, the demand is to put family before self.

Non-Family Employees in the Family Business

In a business headed by a founding entrepreneur employee-employer relationships tend to differ in a number of ways from those in other types of enterprise, whether or not there is family involvement.

Development beyond a one-person enterprise involves a series of transactions that in many cases become hurdles too difficult to surmount. Recruitment of the first full-time employee doubles the size and significantly adds to risk. It is a first step in division of labour and delegation. The next step comes from a combination of three variables: numbers, specialisation and dispersion. The proprietor of an expanding retail business will be spending progressively more time on checking the stocks, placing orders, keeping the books, dealing with the bank and so on, and less on serving customers, but can probably continue to supervise staff sufficiently until numbers reach 10 – 12 on the one site. At that point some specialisation, for example appointment of an accountant, may be necessary. Alternatively, opening a new store, even though overall numbers remain low, will require appointing a manager. For the entrepreneur who has been doing everything personally and claims to know best how everything should be done, it is painful to hand over a set of activities and responsibilities to a manager or a specialist. Delegated tasks tend to be closely supervised. Yet without delegation further expansion is impossible. If not at this stage then at the next, which involves adding another level to the hierarchy, the founding entrepreneur may well find that the shift from “hands-on” to the managerial role becomes intolerable and chooses to sell out, and perhaps launch another new business. To cross these thresholds successfully, the founder needs not only to delegate authority but actively to encourage initiative and creativity. This is difficult to achieve because the business has owed its growth to the founder’s vision and energy. The combination in one person of the charisma of leadership and the power of ownership encourages a culture of dependency which draws an implicit line between permissible and impermissible initiative. Some employees leave, voluntarily or involuntarily, as a result of miscalculating that boundary. Others go because of discomfort with what they experience as arbitrary authority. Able candidates from outside are reluctant to apply for the “number two” job because there is no chance of promotion.

My proposition is that some of these problems, inherent in businesses run by the founding entrepreneur, are magnified when there is family involvement. Even if the family member has a clearly defined role and employment contract, relations with other employees are, as we have seen, often uneasy. That member has “a direct line to God” and will therefore be excluded from the informal culture of the outsiders as being not entirely trustworthy. An alternative is to become a champion of the others, a channel to communicate their complaints to the boss. Son confronts father. If the relationship between those two is open and collaborative, the outcome may be positive. Father as boss is grateful for being made aware of unrecognised concerns of the employees and takes appropriate action, while employees gain trust in the son. All too often, however, the employees are setting up the son by playing into his not necessarily conscious rivalrous feelings towards father. If that then leads to confrontation within the family, the other employees will have found an outlet for their own repressed feelings of rage which are always the other side of a culture of dependency on the leader. Whilst the son may then become a hero in the workplace, issues of succession within the family business will obviously be exacerbated.

When the founding entrepreneur first gives a younger sibling, daughter or son a job, the implicit message is that this is and is going to remain a family business. Young ambitious employees who might have aspired ultimately to rise closer to the top are likely to leave. It will be more difficult than ever to find high-flyers to replace them. New recruits are likely to be less thrusting, more comfortable with a compliant, dependency culture. Innovativeness is seen as the monopoly of the founding entrepreneur or at least of family members. Plainly this is a threat to the growth and even survival of the business; yet it takes outstanding leadership skills to create and sustain a culture that encourages initiative: it requires giving more authority than most leaders in such a setting are willing to give.

It is commonly said that non-family managers who are direct subordinates of the family boss tend to be petty tyrants – subservient upwards and bullying downwards: there may be some truth in this. At the same time, the organisation may well become a kind of extended family, or a feudal system, in which the owners feel obligations to employees in return for the loyalty – for example, generous treatment of long-serving elderly or infirm employees. This makes for good labour relations. Such generosity, of course, raises labour costs, which may in the longer term reduce the competitiveness of the enterprise; but it is important to recognise that an owner, in contrast to, say, a paid chief executive in a public company, has the choice of giving values of that kind priority over profitability. That choice, may nevertheless come under pressure from other family members who are beneficiaries of the business as employees and/or shareholders.

Handing Over and Taking Over

“He wanted his sons to succeed, but he did not want them to succeed so well that they could dispense with his judgement and authority.”

That quotation from Rice sums up a widespread dynamic in family business when the time comes from the transition to the next generation. It is true more widely of founding entrepreneurs at the head of public companies. It is difficult for them to step down and for the board to ask them to go. A common solution is to invite them to continue as consultants to the board and/or to the successor. The dilemma is that if they retain too much influence the authority of the successor is undermined, while if they feel excluded they may act in ways that are damaging to the company. There is a deep-seated ambivalence, more extreme perhaps than that expressed by Rice: on the one hand, a wish for the business to survive and thrive so that one gains a kind of immortality and, on the other, a wish to destroy it so as to prove that no-one else is good enough. This is because the business is so often central to the founder’s identity: it is not something separate, something out there; the enterprise is self. Some entrepreneurs gain their satisfaction from starting up a new venture, developing it to a point at which they can sell it, and using the proceeds to launch something else: they are serial entrepreneurs.

Successors in family business therefore have a difficult role. Sometimes they are reluctant: they are driven by duty rather than ambition. Taking over from a parent evokes complex feelings: for example, underlying the achievement of being given the leadership role may be guilt: taking over from a father dedicated to the business can feel like killing him off. And then when father keeps interfering one may consciously wish to murder him!

There are no panaceas: the process of transition will always be painful. What can help is to recognise in advance the likely problems of handover and to talk about them. It is possible, perhaps with the help of other members of the family and/or an outsider, to draw up a semi-formal contract, which respects the continuing potential value of the founder’s experience and knowledge, recognises the importance of the successor being able to take up his/her own authority, and perhaps schedules regular meetings between the two to exchange information and to review the handover process.

The Expanding Family and the Expanding Business

The founder has children, who grow up, acquire partners, and have children of their own. The larger the number of direct descendents in any generation, the greater the probability of fragmentation. That is a statement of the obvious. Our aim here is to identify the issues more specifically. If these are foreseen, there is at least a possibility of preventive action: fragmentation can be replaced by more orderly disaggregation. The same applies to the consequences of expansion of the business, which may involve diversification into several businesses: when the acquired investment exceeds the capacity (or willingness) of family members to fund it, family ownership and control are diluted. These two kinds of expansion are often occurring at the same time and interacting with each other.

The family referred to in the Introduction took a positive action in creating a “holding board” of family shareholders, with the aim of separating management of their investments in the business from the operational management of the business themselves. Father had transferred his family business shareholdings to his wife and eight children (in one case the widow of a dead son) in nine equal proportions and these nine were the founder members of the board. Three of the companies (or in one case, a group of companies) were headed by family members; the eldest son was chairman of the largest and also chairman of the holding board. They were required to present quarterly accounts and to seek the board’s approval for their planned investments and for the recommended dividends.

The interests of individual members may vary in terms of the preferred balance between short-term income and capital growth, and such an arrangement allows for these differences to be recognised. The individual needing liquidity may negotiate to sell shares to other family members (rarely if ever to outsiders). Because this in turn affects their liquidity they may be more cautious about company investments. Importantly the upshot of a holding board arrangement is a collectively agreed risk and the family member in charge of a company is given clear authority to manage. Roles are more clearly defined.

In this two-generation example, such definition was not too difficult, despite the complication that the youngest sister was both chief executive of a small family business and head of R & D in largest company chaired by her eldest brother. Rivalry between the two brothers was also a problem but a containable one, since each had his own “empire”. The transition to three adult generations was less straightforward. Within 15 years the size of the Holding Board had doubles: in addition to the nine founders there were two more daughters-in-law and seven grandchildren from five different branches. This would increase as more grandchildren reached the age of majority. Moreover, each lineal descendent was entitled to nominate one another, provided that such persons were shareholders as full or beneficial owners. Thus a family member could make a spouse eligible by transferring shares. Membership was not completely automatic – applications had to be approved by 75 percent of existing members and persons with competing business intervals were ineligible – but this had little or no effect in the increase in size; nor did the withdrawal of two senior family members, who chose to use their wealth in other ways. Not all came to board meetings, of course: attendance was often less than half, but rose when there were controversial issues on the agenda. The democratic constitution meant that a senior family member owning 10 percent of the family holding and a junior member with, say one or two percent had equal voting rights. A further complication was that the separate branches of the family themselves began to evolve into mini-family businesses – for example, investing their income in new enterprises. They also usually voted together in board meetings.

As a family grows, so does the propensity for splitting. For example, daughters-in-law may encourage sons to raise grievances that sons have kept to themselves. Differences develop in every extended family – in educational level, occupation, life-style, politics and so forth. Interpersonal relations sometimes cut across these differences and sometimes reinforce them. Differences generate a range of feelings, from admiration to envy and contempt. Actual conflicts can and do occur but more often they are avoided by being selective in maintaining control and often also by dispersal. Family members who meet only in funerals can be temporarily polite and then bad-mouth each other in private afterwards. Family share ownership forces interdependence and interaction. Any negative feelings are kept alive and it is much more difficult to avoid direct confrontation and conflicts. And the family business is a ready-made arena for it.

The differences in every extended family are multiplied by differences in the meetings that the business has for various individuals and branches – both its economic significance and its symbolic meanings. Here are some of the variations in a three-generation family:

1. The extent to which the individual and her/his immediate family are dependent on share of ownership as a source of income. The greater the dependence, the greater the pressure for higher dividends in the short-term rather than the risks of investment for long-term growth; and also the greater the impetus to influence decision-making and frustration at lack of influence. Conversely, low dependence is likely to go along with support for entrepreneurial ventures.
2. If income wholly or mainly goes to charities there is low involvement in such decision-making.
3. The same applies where younger members are too busy enjoying the life of “rich kids” to have much concern about where the money comes from.
4. If the shares in the family business are primarily seen as an asset to be passed on to children the preference will be for steady growth. This may go along with a perception of business as a memorial to the “founding father” and the family name is a core identity.
5. A common phenomenon related to this is the extension of the family culture to the whole organisation, as if employees are part of the extended family. As mentioned earlier, in return for their loyalty the owners feel obligations towards them which makes for good labour relations. However, there are more negative variations: for example:
   • Over-generosity to the elderly, infirm or incompetent increases labour costs and reduces efficiency, which in the long-term threatens the competitiveness of the enterprise, with potential mass lay-offs and even closure.
   • Employees’ loyalty to the family may be at the expense of their loyalty to the task of the business: for example, they may be reluctant to question dubious decisions or to confront the family with unpalatable news.
   • The owners exploit employees’ loyalty by paying less than market wages. Employees may respond by quiet acts of sabotage or, if they are more self-confident, by setting up an aggressive union.
6. The extent to which the family enterprise is felt to represent wealth and influence. Where this is high, and the family name is a core identity, conservative policies will be favoured and there will be concern about any potential damage to reputation and personal credit. At the other extreme, the attitude to one’s shareholding is instrumental and there may be a demand to be bought out by the rest of the family for more profitable investment elsewhere.
7. The extent to which the business is perceived as a source of employment for family members and/or their children. There are differences in the seriousness with which people take up such roles. Am I there because I am the best person for the job or because it is my right as a family member or because it is my duty, and perhaps an unwelcome one? At one end of the spectrum – perhaps the ideal – is the dedicated, well qualified “professional” chief executive or manager, perhaps in a family culture that favours recruiting the best person for the job, whether a family member or an outsider. At the other end is the person who sees the family business as more like a hobby, a toy to play with, or alternatively as a burden to be endured. In between, perhaps, are the part-time board members, with varying degrees of knowledge of the business. Some take a hands-off stance; others get involved in day-to-day matters and their degree of involvement is not always correlated with their competence.

The move to the third generation therefore highlights differences in the way the family enterprise is defined and valued. How far is it:

• a business like any other
• a disposable asset
• a source of income
• a long-term investment
• a provider of jobs for children and grandchildren?

One of the problems for the holding board in the case of the expanding family business was that these different constructions were often more implicit than explicit. When the numbers of family shareholders reached 18, the constitution of the board was defined more formally. One agreed aim was: “to provide as much security as possible for group capital, whose safety lies largely in its aggregate, but which is in the hands of different members, and at the same time to make adequate provision for the withdrawal of part or the whole of an individual’s capital if he so wishes, without jeopardizing Group business”. The emphasis on security arose in part from the fact that historically most of the family’s wealth derived from its controlling interest in a large and successful public company, and although expansion and diversification had generated a growing set of private fully-owned enterprises, that public company was still the flagship of the family business. The danger of “flagship” thinking is that it may distort judgement: its reliability may be too much taken for granted. Either danger signals may not be seen or, if they are seen, the possibility of selling part of the shareholding, justifiable on economic grounds, is liable to be rejected as detrimental for the share price or damaging the family’s prestige. The outcome is predictable. Diversification spreads the risk, though overall control of a conglomerate requires a level of competence at the top that is not easily reconciled with a board of 18 family members, mostly inexperienced, voting on investment policy.

The second declared action of the board, which went some way towards rectifying this, was: “to ensure that the various businesses that make up the Group maintain their position in relation to other businesses by attracting and appointing staff with adequate technical and managerial efficiency”.

In principle, the third aim was not inconsistent with the second: “to provide opportunities for deserving members of the Group for taking positions of responsibility within the Group Companies which will be of advantage for both the Group and the member concerned”. In practice it was much more problematic. The eldest grandson, recently graduated, had always taken it for granted that his career lay within the family business. A second grandson, in another branch, was headed the same way. Most other family members concurred: it was a birthright. There was little sign of the alternative assumption, that it was an obligation to be fulfilled. Moreover, there was an unstated assumption that family membership itself is conferred competence. In such a climate it was very difficult to make the optimum recommendation: that these young men should first gain experience and prove themselves elsewhere.

The knock-on-effect of the “birthright” culture on recruitment or retention of competent non-family managers should not be underestimated. We referred earlier to the difficulties of the young family member in relating to non-family employees. Such a person has to be outstanding to earn respect in his/her own right. If not, the message conveyed is that such is valued more highly than capability. The second generation chairman who has grown up in the business, is plainly qualified and can genuinely delegate seems to be the optimum solution, but it still erects a glass ceiling for an ambitious chief executive and there is always a potential tension between what is best for the business and best for the family. Moreover, there is almost always a culture of dependency established around the family chairman which makes it difficult for an incoming chief executive to establish her/his authority. “Loyal” staff will go behind the CE’s back to catch the ear of the chairman or, if that is not available, the ears of other family members.

The family culture of dependency which so often develops around such a second-generation leader is even more problematic. In this case we have been looking at, the eldest son took over from his father responsibility for the main family business and also chaired the holding board, while the younger son took over another set of prosperous and growing private family companies. Then the younger son died prematurely and his elder brother became effectively responsible for the whole set of enterprises. Meanwhile, attempts had been made to install effective non-family senior executives for both groups, some promoted internally, some from outside. On his side of the business, which included the big public company, the elder brother had sufficient confidence in the three executives who had overall responsibility for the three main components, to pull out and to install his nephew in what was seen as a limited role of honorary chairman of the board. This nephew, the first of the third generation, had by then gained some experience, but it was almost explicit that the appointment was based on the family connection, not on competence. Indeed he was instructed by his uncle not to involve himself in any aspect of the day-to-day running of the company: the three executives must be allowed to manage. This illustrates a common dilemma, when there is no-one from inside the family or outside perceived as quite good enough to assure overall leadership, with the added twist that the family is very reluctant to feel that it is losing control.

Despite this delegation there remained a strong family culture of dependency on the eldest son. He saw himself and many say him as the guardian of the family business. His track-record was impressive – the business under him had thrived – and he was the only one who could now take overall charge of the companies that his brother had overseen. He was also chairman of the holding board. Hence, despite the one-person-one-vote democracy, he had considerable power in terms of shaping proposals before the Board and influencing decisions. Dependence on him was inevitable: there was no-one to replace him. But realistic dependence readily turns into unquestioning dependency on an omnipotent leader, the parent who will look after the babies, the saviour of the family. Such dependency is never unambivalent. Sometimes the resentment and rage are bottled up or displaced onto some external enemy; sometimes, as is this case, they are expressed in rebellion. The natural leader of it was the eldest nephew. The head of this family had no sons, but it is always a much bigger step for a son to rebel against father than for a nephew against uncle. His own daughters’ resentment became evident only after his death; meanwhile they also voted loyally for him. The nephew was the leader of the opposition on almost every issue that came to the board. He was supported by his mother and sister and by the family or another nephew, who had been working his way up in the business towards a leadership role. And so the overall family was entrenched in a split. Although often the nephew seemed to be attacking the uncle for the sake of it, sometimes he had substantive criticisms to make. Because of the split, however, these could not be heard; and his credibility was also undermined by the declining performance of the big, public company that he chaired. So the uncle’s supporters continued to vote unquestioningly for him. And that was the beginning of the end of this family business.

This is the big risk of the dependency culture: it is impossible to question and criticise in a rational way the actions of the leader – impossible both for family members and for the principal non-family executives. Because of this non-questioning, such leaders may come to believe in their own infallibility. They become more remote and perhaps authoritarian. Also, they do not recognise their own declining abilities. Small mistakes get covered up by subordinates. Big mistakes – a misguided investment decision; appointment of an unreliable chief executive – are revealed only when it is too late and the outcome can be disastrous for both the business and the family.

Concluding Comments

There are no right answers no guarantees of success. All we are able to do is to highlight some of the typical dynamics that need to be worked with. That can be of some help: although each situation is unique, there is something to be learned from the experience of others. An independent outsider can often be useful in making the implicit explicit, identifying issues, and perhaps formalising procedures such as the holding board.