No more advice please!

John Tucker is a Grant Thornton Fellow in Family Business at the International Centre for Families in Business.

Family businesses have become the talk of the decade. Over 90% of businesses worldwide are family businesses, so we are told. Only 30% of family businesses make it through the second generation. Less than 10% make it through the third. Who hasn't heard this overused and often misquoted statistic – or some other variation of it?

Family businesses underpin the economy of most nations, Some of our largest businesses are family businesses. One third of the top 100 companies in the UK are family owned and run. Two thirds of the fast track 250 in the UK are also in this form of ownership.
 
Yet family businesses are in trouble, statistics keep reminding us. Most of them are doomed to fail. They cannot handle the unique challenges they face. They need help. And in business 'need' means 'market'. And this market has been tapped with a vengeance. A simple search for 'family business' on Amazon reveals hundreds of books on the subject packed with well-meaning advice, 'how to' guides and 'dos and don'ts'. We have MBA programmes on family businesses, family business networks, centres and institutes, family business magazines, family business seminars, family business websites and family business consultants. Accountants, lawyers, management consultants, financial advisors, academics and researchers have discovered The Family Business and are rushing to the rescue.
 
The problems plaguing family businesses have been conveniently sorted and categorised under different headings, and a multitude of 'products' have been developed to treat every conceivable situation. These have been neatly packaged in various forms and include succession planning, organisational design, operational effectiveness, strategic planning, leadership and management, remuneration and conflict resolution, amongst a host of others.
 
So why do so many family businesses keep failing? Why don't they take all this professional advice and just grow and prosper? Why do they wither when they should be blooming?
 
Firstly, very few family businesses are prepared to accept they have a problem. In countries like the UK, it's the 'stiff upper lip', 'we don't have a problem, do we son?' and 'we can sort this out on our own, thank you very much'. And even when the problem is acknowledged, it is usually somebody else's problem and the ability and willingness to see 'I' in the problem proves remarkably difficult.

How do you suddenly own up to the fact that your family business is in difficulty? Saying that your family business is in trouble is like admitting you have problems in your family, God forbid. Not a very easy thing to do, particularly for the parents. So what usually happens is that the root of the problem is ignored and instead the focus is conveniently shifted onto the 'business' symptoms. These are the areas where the problems are commonly manifested: cash flow, financial structure, profitability, and employee motivation to name a few. Poor performance in any of the these areas is then blamed on other 'business' causes: lack of financing, increasing competition, inadequate accounting systems, inefficient procurement, the state of the economy. The consultants are called in, reports are drawn up, business plans are prepared, employees are replaced, and IT systems are changed.

The result? Many changes but very little change. The son is still frustrated and angry at his dad's reluctance to let go and let him manage the business. His constant criticism and disapproval is driving him crazy. The daughter resents her brother's attitude, hates having her ideas ignored, and can't understand why her husband won't be given a job in the business. The consultant said it's better not to have spouses in the business. But it's not fair, after all, her sister-in-law wasn't asked to leave the business was she? Her brother can't understand what she's complaining about. After all she gets paid almost as much as him and she hardly does any real work in the business. Dad is sick and tired of all this bickering. Why can't Junior appreciate that his sister has kids to take care of? Doesn't he have any family values? How can they both be so selfish and ungrateful when dad has worked so hard and made so many sacrifices to leave them this business? Mum despises the business. Her husband is rarely ever home. Whenever she invites all the family home for lunch hardly five minutes elapse before the conversation turns to the business and an argument erupts. So they rarely ever get together outside the business these days and she really misses her grandchildren. She wishes he would just sell the damn thing.

The more I work with families in business the more I realise that family business consulting is more about 'families' than it is about 'business' and that issues are always much more complex than they seem. Problems in the business are often deeply rooted in relationship problems between family members, which are rarely apparent at the outset of a normal piece of professional work. Professional intermediaries need to understand much more about this complex world of family relationships if we are to support fully our family business clients.