You don’t have to look far to find cautionary tales of children going wrong within the family business. Read on to get a few tips that might make working with your adult children in the family business a little smoother. David Harland– Managing Director of FINH.
Last year, the daughter of Korean Air’s chairman, herself a Vice President within the firm, was jailed after berating an employee aboard a flight and forcing the airplane to return to the gate. Her father publicly apologized for her actions and blamed himself for her insolent behaviour, but the incident became a symbol of widespread issues with spoiled heirs of Korean family businesses. Closer to home, Australians get to watch the feud between billionaire Gina Rinehart and her kids over profits from the family’s mining business.
Parenting children is challenging enough without adding the extra dynamic of roles within a family business. For many of our clients, watching their children follow in their footsteps and see the business grow with their help is one of their life’s greatest pleasures. However, when times are tough or family conflict inevitably arises, the challenge of working with children can be hellish.
What can you do?
Establish clear roles and clear expectations for each parent and child.
I also strongly recommend the separation of “business time” and “family time.” When you’re speaking to your children about something, are you speaking to them as a parent or as their boss? One of the benefits of developing formal governance structures is that they give you and your family a safe space to discuss business issues and air grievances without blurring the boundary with family time.
Treat your children as any other employee or partner within the business
One of the key markers of successful multigenerational family businesses is the professionalization of jobs within the business and the establishment of clear responsibilities and expectations. This process can be critical because it makes it much easier to address problems within the business and sets the groundwork for eventual succession.
Teach kids responsibility early and often
It can be hard to let your kids fail, especially when they work for you. One of the reasons many business owners start a family business is to give their kids a safe, secure avenue of employment. Unfortunately, by insulating them from some of the harsh realities of the world, you are doing them a disservice. The most successful entrepreneurs in the world learn to give their kids the freedom to explore and force them to suffer the consequences of failure. In my opinion, the chairman of Korea Air failed his daughter further by assuming the blame for her actions; if she hasn’t learned by the age of 40 how to act as a representative of the firm, protecting her is unlikely to teach her anything.
Value your children’s viewpoint (especially) when it differs from your own
If you’re lucky enough to have children to pass your business to, it’s absolutely critical that you understand and appreciate their perspective. A common complaint we see from members of the rising generation is that their parents don’t respect them as future business leaders. Keep in mind that your business will have different needs and opportunities in the future and that your children will face different challenges.
The Bottom Line
As parents, you want everything for your kids, including a happy, secure future. It can be hard to balance your roles as the leader of a successful business and a good parent. The good news is that you’re not alone. Most parents with children in the business struggle to enforce boundaries and maintain dual roles.
If you have questions about being a family business parent, we encourage you to give us a call here at FINH on 07 3229 7333.