What's so special?

Nation's Business, Oct, 1997 by SHaron Nelton

What, if anything, is special about the family business?' a reader asked in a letter recently. His family's business was about to turn 100. A company history was in the works, and my correspondent said he would be writing the preface. "Any input on what kinds of peculiarities distinguish family businesses from others would be appreciated and helpful," he said.

Oh, where is the space to respond when I need it? There are so many "peculiarities" that I scarcely know where to begin. Here, briefly, is what I have learned over the years:

Family businesses are believed to be the predominant form of business around the world. Experts estimate -- conservatively, they say -- that 65 to 80 percent of all enterprises are owned or controlled by families.

Family businesses are characterized by overlapping systems: the family and the business. Each has differing needs, and sometimes those needs conflict with each other -- for example, when parents want to treat their three children "fairly" by appointing them co-CEOs, but the middle child would clearly be the best next-generation leader of the company and would best meet its need for growth.

Nonfamily businesses, of course, are not subject to such interplay between business and family.

The "family" in a family firm can enhance business. Some families function so well that they continually maximize business performance. Some, because their name is "on the door" or attached to a product, do their utmost to offer quality and to contribute substantially to their communities in various ways.

A business offers an owning family an exciting, real-life forum for teaching younger-generation family members about values, work, human relationships, communication, and the like. It provides an added incentive for being close as a family. And it can be a source of not just a good living but real wealth.

But there is a dark side, too. When family members don't work well together or don't love and respect one another, the business can become a battleground that amplifies greed, rivalry, and immaturity. It can destroy the family, or an unhappy family can destroy the business.

Just as the business can be a means for teaching ethics, economics, and leadership, it can be the tool by which some family members exert power and control over others.

The 100th anniversary of a business is a remarkable event -- evidence that a family firm can have staying power over many generations. Yet, no doubt there are periods during such a course of time when a business is shaken by family strife. The century milestone is proof that not only did the business endure but, in some form or another, so did the family.

In putting together a 100-year history of a family business, the temptation is to celebrate the triumphs -- bouncing back from the Great Depression, for example, or rebuilding after a flood or fire, or inventing and marketing the best darn widget there ever was, or the time great-uncle Joe got elected to the U.S. Senate.

If I were writing the preface to a family-business history, however, I think I'd also want to ponder the shadow side of the family -- the time great-granddad's brother took him to court over a business disagreement, for example, or the time Senator Joe's son-in-law had a breakdown and couldn't run the company anymore. I'd want to think about the mystery of families, about how sometimes this family almost didn't make it, and yet, it's still here, running this business after 100 years.

And isn't that something?