98% of the Turkish economy is dependent on family businesses. Family businesses that are so important for the economy face difficulties due to problems such as family conflicts, inheritance issues, inability to institutionalize, etc. Family businesses that have been able to pass to the third generation are very rare worldwide. Let us take a brief look at these problems.
TRANSFERING the MANAGEMENT
When should the senior generation leave the management to the future generations? It is usually seen that even when the management of the business is relinquished, it is not possible to let the need to control go. Actually, transferring the management before it is too late, and remaining only as a guide when necessary, would facilitate the process and ensure the healthy continuation of the business. During the transfer of management, problems among siblings will increase. Working with and for your parents and being dependent on them is difficult. But reporting to your sibling, brother or sister is much more difficult. The sibling who is not in management may be unhappy and angry. Sometimes siblings can work in harmony. However, when their transfer time comes, the wish to see their children more effective will create problems in the next generation. One of the most important reasons family businesses have big problems with after the third generation is these conflicts and power sharing issues. Especially in our day, when family concepts and extents are changing with an increase in divorces and re-marriages, the issues that need to be considered have also increased.
Rational transfers made by taking abilities, education and tendencies into account make the resolution of the problems possible. But this is difficult to accomplish in family businesses because of family dynamics. Therefore, many family establishments need counseling, not only for corporate and legal matters, but also for family dynamics. In the study of dynamics of development phases, Freud has established that the biggest reason for conflict between fathers and sons is rivalry, with the subject of the rivalry being the mother. In family businesses, the subject of the rivalry, e.g. the competition, becomes the business. That is, the business takes the place of the mother. While the son wants to be like the father and covets what the father has on one hand, on the other he is afraid of, and angry at the father, who is the stronger opponent in the rivalry. Therefore, when the inheritor is a daughter, there are fewer problems. As the daughter does not enter into rivalry with the father, and actually nurtures him, achieves success more easily in the family business. On the other hand, this fact is ignored in many societies because of gender discrimination.
The senior family member heading of the family business is usually reluctant to retire, because the business is not an obligation for him, it is a passion. He has trouble letting go of this process which nurtures him. It is normal for the owner of the business to want to continue his/her control on the business. If future generations can accept and sustain this, there may be no problems. But then, the new generation will have difficulty in learning to take responsibility and act accordingly. Achieving the balance hereto is a challenge. In fact, the time until the transfer takes place is the time when the older generation should utilize to train the new generation and to prepare them for the future. When the new generation has been properly trained, it will be easier to transfer power and control to them.
CAN WE BRING UP OUR CHILDREN as LEADERS in OUR FAMILY BUSINESSES?
Bringing up a child is usually far more challenging and tedious process than running a business. The complete physical, mental and social health of the child is at stake. Furthermore, it is desirable to ensure a good education, a good family life, and good business and social environment for him/her. Therefore, bringing up a child is a process that requires knowledge and rules. But if, at the same time, we want to bring up our child as a leader for our family business, then we need to have more knowledge, obtain some support, and develop a different set of rules.
If we are running a family business, and we want to leave the management to our children, we need to develop the leadership skills of our children in the best way possible. The first provision of achieving this is to be a real leader yourself. You need to coach your child find his/her way. It is important for family members to understand where their children’s abilities and talents lie, and to understand how best their children can exploit those abilities. Understanding the needs of the family (that also includes the needs of the child) and the business is one of the most important responsibilities of a leader.
Knowing the development phases of the child is a must for the shaping of his/her future. The development of a three-year old child’s social and sexual identities has been completed. The child who has started to know and recognize his/her surroundings asks everything. The most important persons to answer these questions are the parents. Children learn being a man or a woman from the father and the mother. In order for them to learn this, it is necessary to establish sufficient and proper relationships with their parents. For a natural development, daughters should identify themselves with the mother, and sons with the father. This identification is necessary for the completion of the sexual identity. However, for the socialization, development of behaviors, skills and desires, all children, regardless of gender, need both parents. The time spent with them, and the quality of the time being spent with them, becomes more and more important. The time stolen from the child and used for business, although it may seem profitable at the time, may cause losses in the future, as the child will start seeing the business as a rival that takes, distances, tears his/her parent away from him. At a time when he/she most needs to share, to ask, to consult, his/her parent is not there. What keeps the parent away from them, and what he/she cannot deal with, cannot eliminate, cannot defeat, and is business. The lack of love and attention that starts like this, will result in the child not liking, or being interested in, his/her parent’s business. Furthermore, it is unthinkable to expect a business that takes up so much of his/her family’s time that tires them and leaves them with no choice in the face of their loved ones to be considered a desirable business. The defense of the parents under the circumstances is to tell them that “everything is being done for them and sacrifices are being made for their future.” For the child, who needs far different things for his/her development than money, this argument is meaningless. Of course, this does not mean that everything should be dropped and one’s life be dedicated to the children. But in order to bring up healthy children who enjoy work, especially your line of work, it is necessary to program your time. The time you steal should be yours, not your child’s.
Most of the time, the profession we dream for him/her and what the child wants are not the same. The conflicts arise at the time of decision. Especially if we have an established business which we believe we have been preparing for him, disappointment is inevitable, along with the conflict. All dreams that started with his/her birth, or even before he/she was born, are shattered the moment he/she says he/she doesn’t want the business. Can this be changed? If proper behavior is displayed and the necessary measures taken, it is possible to bring up a generation that will take over your business and be successful.
GROWING UP AND GAINING INDEPENDENCE
Under normal circumstances, families want their children to grow up, become self sufficient and live on their own. However, in family businesses, this never truly happens. Even if the child grows up and leaves home, he/she has to spend significant portion of the day with one or both his/her parents. If the balance between authority and the skill to be him/herself cannot be balanced, an adult type of dependency will develop easily. If the parents have not been able to equip the child with the necessary self confidence and independence while bringing him/her up, this will manifest itself as lack of confidence. This lack is both in the confidence of the older generation in the new generation, and in the confidence of the new generation in their own abilities. In families, conflict between siblings is normal. As they get older and their desires diversify, these conflicts diminish. But in family businesses, as what desire will be the same thing as they grow older, conflicts and struggles will increase. During this development, the conciliatory or provocative stance of the family’s elders will play an extensive role during the distribution of responsibility. During the sustenance of the business and the transfer of power, beyond economic and legal plans, family dynamics are at the forefront.
Family businesses are institutions that incorporate company and family dynamics. To separate these dynamics, and to make them into institutions as independent of each other as possible, but still keeping the characteristics of being a family business, needs professionals. Nowadays, there are professionals involved in the dynamics of the family establishments in teams formed for the preparation of family constitutions. At the same time, many family businesses start off by obtaining professional counseling for bringing up their children. The relationships between institutionalization and professional managers, between the professional managers (CEO) and the family, are the subjects of another article. In a time when institutionalized corporations are using the motto, “We are a Family,” with some help, we can turn our family into a working and sustainable establishment.
Professor Bengi Semeci, M.D.