In family business, there is a clearly defined but invisible control mechanism called the “family system.” Some might call it the psychology of the family. From a business standpoint, one can craft an elegant solution to business problems, but in family business, the keys to implementing this solution are always locked up in the psychology of the family. If you fail to pay attention to the family psychology, business solutions will not be effective. Thus, it’s useful to understand family systems theory, another name for the family psychology.
Murray Bowen, M.D., is a psychiatrist who studied schizophrenics. He found that when he worked with these patients on an individual basis, he could get them to function more effectively, but when they returned to their families, they reverted to the less functional, schizophrenic behavior. This was Bowen’s “Ah ha!” moment. It caused him to recognize that there were forces in the family that precipitated this behavior. Here is a simple description of his family systems theory.
1. A family is a system. There are clear boundaries of who is a family member in the system and who is not. There is a line drawn that determines family – on one side you are in the family and on the other side, you are something else but “not one of us.”
2. The family system contains rules or strong messages for behavior. The rules can determine who is in charge, who makes what kinds of decisions, who will go to university, how money is used or distributed and who receives special opportunities. It’s an unlimited list of rules for everything.
Try this task. Jot down a list of decisions in your family and how they are made. Are you in the “inner circle” when it comes to decision-making, or is there someone else who is generally favored? You might find that when major financial decisions are made, the real decision maker is not who you expected it to be. This task may help you to better understand your family system and what really governs your family.
3. We can and do learn other behavioral messages than those of our family. This means that we can go to university, achieve advanced degrees and work effectively for years in business, using the knowledge, skills and experience we’ve acquired. Some of the behavioral messages of our family contradict the things we learn outside the family, and we learn to set those contradictory family patterns aside. Further, we are working with people from other families who have different family patterns, so as a group of colleagues, we focus on and use International Best Practices for Business, not the individual family pattern.
4. When we as individuals or as a family are under stress, we are at risk of reverting to the pattern of our family, unless we learn to recognize the ineffective family pattern and actively avoid reverting to that pattern. This is the key to understanding family systems theory and how it comes into play in family businesses. You may have a collection of family members, all of whom are well schooled, experienced in business and function well independently. Then, when they get together and are under stress, the entire group is at risk of reverting to the less effective family pattern, rather than using the International Best Practices they know so well.
An example might be the family pattern of upward delegation to a father or mother. “You will have to ask your father,” is an example of upward delegation. International Best Practice tells us that decisions must be delegated to the lowest possible level in the organizational structure. Put the decision at the level where it must be addressed, with the people who must solve the problem.
When a family business uses the “upward delegation” pattern, a bottleneck is created in the decision structure. This means that decisions are often delayed, don’t get made or are made without full knowledge and command of the facts. The business ends up with a poor decision because the family members reverted to the family pattern. This means they must settle for a less-than-optimum outcome.
Some family system messages actually complement or enhance the business operation. This could be a family pattern of expecting members to work hard, do the job expeditiously and do it correctly. These are behaviors that every employer wants in an employee. On the other hand, the family message that says you only do something if and when you want to do it is the total opposite of what any employer wants in an employee. In fact, such behavior will get you fired in most businesses!
Understanding family systems theory can help members of a family business work together more effectively. This understanding and a solid corporate governance structure (see the post prior to this for more info on corporate governance) are keys to running a successful and healthy family business.
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Family Business Matters has extensive experience assisting family businesses. With many decades of experience, we understand the wide variety of challenges that families face as they work together to build, grow and sustain a thriving family business generation after generation. Through conferences, continuing education programs, family business retreats, speaking engagements and private family business consulting services, Family Business Matters has assisted more than 450 family-owned businesses around the world chart their way through family business issues of all shapes and sizes.
For more information on how Family Business Matters can help your family business survive and thrive, please contact us today at (970) 948-5077.