Harmony: Is Your Family Playing the Same Tune?                                  April 2023

Suppose for a moment you are the owner of a family business in the 60s and 70s that produces vinyl music records for sale to record stores and major department stores throughout the United States. By produce, I do not mean your business manufactures the records, but identifies and contracts the major performers and groups that the population wants to buy and hear on their radios, TVs, and record players. I understand some readers may not know what a record player is, so you can Google it. Many of the top performers in that era were groups and trios and quartets, like Diana Ross and the Supremes, the Lettermen, the Four Freshmen, the Coasters, the Flamingos, the Ink Spots, the Lennon Sisters, the Mills Brothers, and the list is endless. What set these groups apart from many of today’s performers, is their singing required harmonizing.

Harmony in a family business is every bit as important as it is in producing songs people want to hear, music that can last a lifetime. A symphony performed by a full orchestra is indicative of the importance of harmony. If only one instrument is out of tune or a wrong note played, or any of the musicians’ timing is off, harmony is lost and the production a disaster. Compare that to a family whose business is in its third, fourth, or fifth generation with 30 to 50 or more family members. The question is are they all reading from the same sheet of music, do they each have the necessary instruments, the talent to play those instruments, the experience of playing alongside other musicians, and who is conducting this family orchestra?

For some insight on how to create and maintain harmony in a family and family business, I am drawing on two articles from the Family Business Consulting Group.[i]

Terry Johnson is the third generation Chair and CEO of Johnson Family Industries and is faced with implementing her succession plan. There are four branches of the business with each branch employing a key family member at some level. Two are not interested in the CEO position, but the other two are very interested in becoming the new CEO. Terry’s sister is a shareholder but not employed in the business. However, one of the interested contenders is sister’s daughter and Terry’s niece. The sister actively lobbies the board and family council to consider her daughter for the CEO position. Adding more intrigue, Terry’s son is the other prime candidate. Of course, all family shareholders expect Terry to make the decision based on which of the two contenders will continue to grow and flourish the business. What would you do if you were Terry? What are the possible consequences of choosing one over the other? How would you make that decision?

Let’s start with the most basic decision that can also be the most difficult; will it be family over business or business over family? One family may say family is most important. If a business decision creates disharmony in the family, then sell the business, give everyone their share, and let each go their own way so holidays together can still be harmonious. Another family may say business is more important and a little disharmony is tolerable. The authors in The Beacon for Strong Family Businesses article presented the acronym D.U.R.A.B.L.E. to provide guidelines for achieving harmony.

Desire: You have to want harmony and you need to want it a lot because it is going to be difficult. Going back to my orchestra example, think how many years each person has needed to become really good at their instrument, then think about how many hours, weeks, and months it takes for 40 or 50 musicians to become finally synchronized. Harmony will be achieved when everyone is committed to achieving it.

Understanding: This requires good communications and listening skills, and I mean really listening, not just hearing. This is also a good time to have someone at the table who is capable of hearing and seeing without bias or family history and emotions. Disharmony occurs when there is poor or no communication, which leads to a breakdown in trust. Distrust in the family or the family business will ensure disharmony and ultimately destruction.

Reflection: Why was this business created? What is its history? How did previous generations deal with family dynamics and conflicts? What issues have been swept under the rug and now need to be cleaned up? Does the family want the business to continue, to remain family owned, and why? Finally, every member should be willing to look into the mirror and honestly confess their role in any conflicts because in every conflict all parties are guilty of something.

Accountability: This is a continuation of my previous comment. Each person must accept accountability for their actions and statements and roles in whether the business and family are prospering or coming apart. “Accountability recognizes that we have responsibilities and obligations to each other, and we take them seriously. Healthy and helpful accountability flows from agreed upon goals, based on common values.”[ii]

Believe: This trait aligns with Desire. Once everyone is committed to achieving harmony, everyone must believe it will be achieved. Belief, like understanding, is entirely dependent on good communication. Again, bad communication leads to distrust, and no one will believe in anything they do not trust.

Love: Working closely with relatives as well as getting together for family events gives everyone the opportunity to observe the good and bad in everyone. Love, by definition, is a choice. So is forgiveness and it is one of the highest forms of love. “If anyone has caused grief. . .you ought to forgive and comfort [them], so that [they]will not be overwhelmed by excessive sorrow. I urge you, therefore, to reaffirm your love for [them].[iii] Remember, Reflection requires looking inward and humbly acknowledging you need to forgive because you have things you need to be forgiven for.

Enough: Going back to my comments on the basic decision of business over family or vice versa, we must recognize that harmony does not mean perfection. Life proves that it is impossible to make everyone happy. Not everyone can, or will, get what they want, but they can accept living with the decisions that will protect the family even if it is at the expense of their or someone else’s desires.

The Navigating Family Business Dynamic article focuses on Identity, Money, and Communications.

Identity: I am expanding on several of their comments. First, what is the identity the family desires? Second, what is the identity the business desires? Third, what is the identity each family member desires for themselves? But each of these questions must also be countered with, “What identity do we/you NOT want to be known for?” and “What identity do others say we/you are?” In other words, “Who am I?” and “Who are we?” Revisiting Terry Johnson’s predicament: her decision is conflicted by her multi-roles as business leader, governance leader, parent, sibling, aunt, and family leader. Terry must answer “Who am I” regarding this specific decision? Her decision definitely has implications for her roles as a sister, aunt, mother, and CEO. That is true of everyone in all families and businesses, and understanding what role is most important for each decision is critical to making the right decision.

Money: “Money is a complicated dynamic in family business because it can create a level of “forced connectedness.” One way to think about this is that the family takes care of the business, and the business takes care of the family. This exchange means that family members stay financially intertwined through jobs, compensation, distributions, dividends, and perks. While family business can create financial security, it also creates a mechanism to keep family members tied to each other and to the business, even as family members move through adulthood. (Even when they don’t want to be connected)

Money and wealth are associated with many traits and emotions including guilt, security, influence, entitlement, competitiveness, and privilege.”[iv] In other words, money and relationships in a family and family business are intertwined and influencing each other even for those not involved in the business.

It’s important to consider individual goals in balance with collective goals, and how money and wealth can provide both opportunities and challenges to family dynamics as family members make decisions about who they want to be as adults.

“Navigating the complexity of money and wealth in family enterprise requires a delicate balance and the right communication and structure in place to protect relationships. This allows families to think through tough issues such as fairness and equality, interdependence and independence, appreciation, and entitlement, and what it means to be closely financially tied to a family business. Empowering the rising generation with education and decision-making skills to become financially responsible adults and make independent life decisions will provide a stronger foundation for both individual development and family harmony.”[v] (Emphasis added)

Communication: I mentioned above why good communication is so important to achieving harmony, but it is not easy and like harmony, there must be an unwavering desire to constantly do better because the interconnection of business relationships with family relationships often leads to:

  1. Families share an overload of information including financial and job details and spend an excessive time discussing business-sometimes to a fault.
  2. Families communicate inconsistently which creates distance and sometimes resentment between those “in the know” and those who feel left out.”[vi]

One common dynamic is triangulation. This is a game of rather than going directly to the person one needs to talk to about a problem or want, they talk (do I dare say, gossip) to other people and family members to solicit support for their side or what they want. Terry had this going on with her sister regarding her sister’s daughter. Now we are dealing again with distrust that leads to resentment, and in a worse situation, possibly revenge or backstabbing. “This often leads to individuals, family groups and generations becoming polarized, fostering an unhealthy family branch mentality with family members blaming each other, or comparing compensation, ownership stakes and roles in the business with incomplete information and a pre-set negative mindset.”[vii]

A primary concept every family and family business must embrace and implement, is that “fair and equal are neither fair nor equal.” The way we put it is, “Nothing is so unfair as the equal treatment of unequals.” People are NOT equal and should NOT be treated as being equal. Everyone should be acknowledged for their individual talents, gifts, and uniqueness; but also for their faults and shortcomings and treated accordingly. Again, the family needs honest reflection.

The trio, the quartet, and the symphony orchestra achieve harmony only when everyone is committed to playing the same tune, at the same time, in the same way, and appreciating every person’s talents and drawing on those talents. Sheet music is the communication that keeps every musician on the same page. Not every instrument is played at the same time, but when it is needed, it needs to come in at exactly the right time for as long as it is needed. Finally, a conductor is required. In this case, a group of non-family people and advisors who can assess, without bias and emotion, the level of communication and commitment and know when harmony does not exist and direct the family in how they can achieve it. Will your family and family business be a symphony orchestra or a scratchy record?

[i] Durable Family Harmony: The Beacon for a Strong Family Business, 4/5/2022; and Durable Family Harmony; Navigating Family Business Dynamics, 4/13/2023 by Tom Emigh and Jennifer Strom, MBA, MA; Family Business Consulting Group

[ii] Ibid

[iii] 2 Corinthians 2:5-8, The Bible, (New International Version}

[iv] Durable Family Harmony; Navigating Family Business Dynamics

[v] Ibid

[vi] Ibid

[vii] Ibid

Kip Kolson is the president of Family Wealth Leadership, a multi-family office and family coaching firm, and author of You Can Have It All; Wealth, Wisdom, and Purpose—Strategies for Creating a Lasting Legacy and Strong Family. You can order your copy at Amazon. Click on the FWL website below to learn how we help families create a legacy, or email kkolson@familywealthleadership.com or call us at 949-468-2000 to arrange a call or meeting to discuss your family’s situation.

Book: https://www.amazon.com/You-Have-Wealth-Wisdom-Purpose-ebook/dp/B07D5JLFFW/ref=sr_1_16?s=books&ie=UTF8&qid=1544226958&sr=1-16&keywords=you+can+have+it+all

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