How To Manage Your Firm's Biggest Threat

Many times, the biggest threat to a family business is the ego of someone involved. Powerful ego is not the exclusive domain of founders. Spouses, children and others in family-business systems can assert individual agendas in ways injurious to the family and the business as a whole. These may be elders other than the founder who refuse to relinquish power to capable successors, or a cousin who insists on larger dividends without regard for what is good for the business. These family members focus on their own needs and goals, fostering conflict in the family and potential abuse of the business. Suggestions for maintaining balance between individual and family goals are presented. They include limiting individual power with written policies, codes of conduct, family constitutions, mission statements, or other jointly produced statements of family norms and values.