Characteristics of a Healthy Family Enterprise

Published: Feb 21, 2022

As a Family Enterprise, you have family members who are willing and able to take the “baton.” You are a step ahead of many families.

It is important to note that the process to be a healthy family enterprise is not what you are doing, more so, how you are doing it. This is part of the race where you both have your hand on the baton.  Some things to keep in mind are:

  • Your choice of words – are you calling your child’s spouse an outlaw or a married in-law so they feel a part of the family?
  • An independent advisor – do you have someone who can really call things for how they are and is not a “yes person”?
  • Be mindful of location – when you conduct a business meeting with family, do they happen in the family dining room that is better suited to be a neutral happy place?
  • Have clear intentions – communicate your vision, hopes and desires with transparency and a good set of listening ears.

The greatest challenge in being a family enterprise is handling the many lenses to see through. A variety of family members may be seeing things through different lenses and have a very different perspective from their viewpoint. Remember that there is no right or wrong – there are so many ways to go. And no matter how different perspectives may be there is always a way to bring people together.

To be a healthy family enterprise the following characteristics are needed.

  • Communication is open and clear
  • Family has the ability to resolve conflict
  • There is high trust between family members
  • Goals and values of the family are clear and documented
  • The boundaries between family and business are clear
  • Succession is planned early
  • There is a functioning independent board of directors

There are two elements to being a family enterprise and they are: having shared ownership and the vision to last multi-generations. If you want successful transition you must communicate, make decisions together and have the ability to resolve conflict.

When a family is in conflict the following may show up as common responses:

  • Pretend nothing is wrong
  • Just give in
  • Get visibly angry
  • Cry
  • Use the silent treatment
  • Complain to someone else
  • Smile no matter what

Note there are 5 conflict management styles:


  • Assertive and uncooperative
  • Pursues own concern
  • Uses whatever power to win
  • “Stands up for rights”


  • Unassertive and uncooperative
  • Does not address conflict
  • Does not pursue own concerns or those of others
  • “Diplomatically side-steps an issue”


  • Unassertive and cooperative
  • Neglects own concerns to satisfy others
  • Self sacrificing
  • Obeying another person’s order when one would prefer not to
  • “Suffer in silence”


  • Assertive and cooperative
  • Opposite of avoiding
  • Works with others to understand underlying concerns
  • Attempts to find solution that satisfies both sets of concerns
  • “Two heads are better than one”


  • Intermediate in both assertiveness and cooperativeness
  • Falls between competing and accommodating
  • Find expedient mutually acceptable solution
  • “Splitting the difference” (you give a little, I give a little: usually ends up with two unhappy people)

The moment the door is opened and there are more than a few people in the room being a family enterprise becomes more challenging. Add to it that these are your kin, who over the years have been labeled: the lazy one, the spender, looks out for himself and himself only, too weak, overly zesty, outspoken, too dependent, and so on, how do you step away from the persona you envision and give credit and let go when it’s time to pass that baton over?

The challenge here is to truly have an adult-to-adult conversation.  As a parent, you’ve watched your newborn grow into a toddler. The toddler grows into a child. Your child grows into a young adult. Although your child is now an adult it is difficult to view them as anything else but your child. It takes conscious effort to communicate on an adult-to-adult level. The same is for a child who always looked up to the parent and so wants to be seen as an adult yet lives off the backbone of the parent and doesn’t take the stance of an adult. Do note this happens between siblings as well. The youngest sibling may always be viewed as the baby and not given credit for their own intellectual capital. The intension here is to bring awareness and when communicating you must converse at the same level: all as adults to achieve a healthy family enterprise.

With awareness and continual communication, you can have all the elements of a healthy family enterprise.

Decision Tree Question: Do you have the characteristics of a healthy family enterprise?

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