An often-overlooked aspect of family businesses is the relationship between individual family members and the business. Without healthy boundaries between ourselves and the business, we can end up feeling we are not in control of our lives and that our lives are being defined by the business. This is not healthy for individuals or for the business but can be avoided by proactively creating boundaries between the individual and the business.
By David Harland – Managing Director of FINH

I recently came across this interview with Dr. Michael Klein,  author of the book Trapped in the Family Business. In the interview, Dr. Klein explained how he expands on the widely used Three-Circle Model of the Family Business System. He has added a fourth circle to this model, to include the self. I think this is an interesting way to address the relationship between ourselves and the business.

As a bit of background, the Three-Circle Model was developed by Renato Tagiuri and John Davis at Harvard Business School in the 1970s. The model consists of three overlapping circles representing Family, Ownership, and Business. The three overlapping circles create distinct groups into which anyone involved with a family business may fall. Some family members may work in the business but not be shareholders, while some non-family members may own shares, and either be involved in the business or be silent partners. Some employees may not be family members or shareholders, yet they are still an integral part of the business. In all, there are seven possible categories that each individual can occupy.

The model is used to frame issues and challenges by highlighting the fact that each group has slightly different perspectives, interests, and goals. When addressing challenges or conflicts within the business, it helps to first identify everyone’s unique place within the model to understand their perspective. However, the model may be insufficient when it comes down to an individual and their sense of self. This is where Dr. Klein introduces the fourth circle, with each family member falling into their own individual circle.

Establishing a sense of self can be very challenging for members of a family that owns a business. They are often torn between feeling obligated towards their family and business, and the urge to define themselves or make their own way in the world. As the title of Dr. Stein’s book suggests, if individuals do not have the opportunity or room to establish a sense of self that is independent of the business, they are likely to feel trapped. This isn’t good for the individual, the family or the business. At best it will result in low productivity and at worst it can result in people leaving the business and rifts forming within a family.

To avoid this, it’s important for individual family members to establish boundaries that separate their personal lives from the business. The earlier these boundaries are established the better. Without a clear line between career and at least part of one’s personal life, a career can very quickly take over every aspect of our lives. This may work for a while, but at some point – often during a crisis – we may be left wondering what we are doing with our lives.

Dr. Klein refers to this as building a moat around yourself to keep parts of your identity entirely separate and safe-guarded from the all-consuming nature of a family business. He states “ I frequently encourage {clients} to imagine a moat around him, his spouse and his children to create a space that is separate from parents and separate from the business”.

We should all endeavour to pursue interests that have nothing to do with work. And everyone involved in a family business, especially family members, should be allowed the space and time to do the things that are important to them.