Keys to a Successful Family

Business
Laura Bechard

Abstract: Family businesses have a significant ­positive

impact on the economy. They face unique challenges
that come from combining family with business. A ­ fter
­interviewing individuals involved in11 family b ­ usinesses,
this article shares their strategies for success in overcom-
ing the challenges that come with ­combining business
and family. The study asked respondents about their
successes, their lessons learned, current challenges, and
plans for succession. This article provides the fi ­ ndings of
the study and shares the keys to ­success identified by the
respondents: communication and change management.

Laura Bechard`s passion is to help Keywords: communication, family business, family

family business succeed. business change management, family business study,
An academic award winning, top family business success, family business transition,
graduate MBA, and Chartered family enterprise, family leader
Professional Accountant, she is the
creator of the innovative ProVision
Coaching System, promoting the The Family Business Challenge
effective, fulfilling union of family and Many surveys and research into the challenges ­facing
entrepreneurial life. Laura now proudly family businesses focus almost exclusively on s­ uccession
joined ActionCoach, the premier
planning. This is not surprising given that only 57 ­percent
business coaching firm worldwide.
As a certified change management, of family firms have succession plans in place, with
learning, and performance 12   percent of them making it to the third generation
management professional, Laura and a mere 3 percent to the fifth (PWC 2016). The prov-
coaches business owners through a erb “shirt sleeves to shirt sleeves in three g­ enerations” is
transformation of financial and life
results. quoted across the globe, adapted for ­cultural meaning.
In Scotland, they say, “The father buys, the son builds,
Sharing co-ownership with her
husband of a century-old grain farming
the grandson sells and his son begs.”
operation, she is now masterminding The challenge may be partially due to lack of succes-
an extensive crop diversification, sion planning; however, there may be additional factors
venturing into health and wellness at play that can be influenced much earlier in the life
botanicals, along with managing the
cycle of the business. More recent research is point-
specifics involved with the eventual
transitioning of the business over to ing to lack of innovation as a significant contributor
her children. to the d­ emise of the family business (Sauder School of
Undoubtedly, this savvy visionary
­Business 2013).
knows her way around running a Individuals want to experience both the spirit of dis-
family business. covery and desire for stability. When someone becomes

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 Keys to a Successful Family Business

curious, possibilities open up and other of the data collected. It reassured prospec-
options are explored. However, being
­ tive respondents of anonymity in their
­curious is a catalyst for change. To try some- participation.
thing new requires a founder/leader to look Over 5 months in 2016, we interviewed
at underlying assumptions and ­paradigms, 17 individuals connected with 11 family
evaluate the way things are done, risk think- businesses.
ing differently, and put something untried
into play (Pentland 2015). Our first key to Sectors and Generations
family ­business success is implement- In 2016, we spoke with 11 family firms in
ing change m ­ anagement methodology. Ontario, Saskatchewan, and Alberta. Ten
The respondents identified effective family firms were in the founding gener-
communication as one of the most criti- ation, while one was second generation
cal factors to successfully overcoming the firm. One family firm started by purchas-
challenges of combining a family with a ing existing businesses and now operates
business. Being vulnerable, setting clear as a family business in succession to the
boundaries, and clearly delineating respon- second generation. The sectors repre-
sibilities were some best practices cited. sented were manufacturing/construction,
Significant breakdowns in communication business services, and retail (See Figure 1).
can cause irreparable harm to family busi-
ness relationships and ultimately lead to Respondents
family members walking away from the As seen in Figure 2, the majority of respon-
family business, putting it up for sale, or dents (67 percent) were either founders or
closing the doors.
ProVision Coaching Network’s 2016 F ­ amily
Business Study found that family businesses Figure 1: Study Participants by Sector
face these challenges:

1. Communication
2. Managing Change
3. Routines and Systems
4. Succession

The Study
Our Approach
ProVision Coaching Network (PCN) con-
ducted telephone interviews with the
­majority of the respondents; one interview Figure 2: Respondents by Relationship
was conducted face-to-face. Respondents
were referred to PCN through its network
of business service firms and family firms
in their networks. The trusting relation-
ship between the family firms and the
referral partner created a trusted relation-
ship with PCN interviewers. PCN benefited
from the halo effect of these preexisting
relationships.
Our process began with an invitation to
participate in the study that outlined the
nature of the study and the intended uses

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 Keys to a Successful Family Business

cofounders. In only three cases were our re- What Works?

searchers able to speak with more than one The first question respondents answered,
individual. The family members who par- “What has contributed to your success in
ticipated in our study included spouses (2), balancing family and business?”, elicited
siblings (1) as well as nieces (1) and neph- responses such as “clear delineation of
ews (1). One respondent was the cofounder duties based on strengths,” having “no go
of the business and is now an employee. zones,” having an outside perspective us-
Unfortunately, our requests to speak with ing experts, having systems to rely on,
children who were named as potential suc- and getting experience outside the family
cessors were not granted. Approximately business.
50 percent of the children were over 18 and Other themes that emerged included the
working in the business. following:
Respondents included family members in
each of the three circles of the F ­ amily Busi- ■■ Having someone play an active “Family
ness Model: Family, Owner, and ­Employee. Leader” role regardless of gender
Figure 3 illustrates the membership of the ■■ Clearly communicate the role, family or
respondents in each of the three circles. business, being engaged. Which hat are you
We were unable to interview ­family ­members wearing in the context of the conversation?
who were not involved in the b ­ usiness, and ■■ Clearly identify who is accountable and
in many cases, the ­respondent (founder) did responsible for making the decision and
not allow access to a­ dditional family members who is being consulted or informed
who were working in the business or were ■■ Being vulnerable with each other
cofounders. When ­respondents were invited ■■ Remembering the common purpose
to ­provide contact details for additional ■■ Intentional plan for succession
­family members, four respondents readily ■■ Family members working in the business
did so, but the other seven were reluctant by choice
for several reasons: ■■ Not working from home
■■ Alone time
1. Children were minors
2. Cofounders were not fluent in English PCN Commentary
3. Other family members were not aware Effective communication, specifically to
they had agreed to participate in the study ensure that assumptions are stated, is a
4. “You don’t need to talk to them. They will routine that works. Valuing both the family
tell you exactly the same thing.” leader and the business leader role helps
align family purpose and keeps the family’s
goals in sync. People who have effective
interaction skills ask clarifying questions
Figure 3: Respondents by about content but also about process. Tak-
Family Circle ing the time in a conversation to clarify the
intended outcomes, the decision or task at
hand, and the role you are playing helps
promote a culture of accountability and
empowers decision makers.

What Have You Figured out along

the Way?
The second question, “What lessons have
you learned along the way?”, provided
­opportunities for the respondents to reflect

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