The Greatest Show on Earth
Running a family business can feel like a three-ring circus at times. In ring number one, the Ownership Ring, we have our troop searching high and low for financial return. In ring number two, the Family Ring, we have Mom, Dad and the rest of the gang performing their famous balancing act around Brother’s drinking problem. And in our third ring, the Business Ring, behold management stick their head deep into the lion’s mouth as they take on mountains of debt. What makes this circus so spectacular aren’t the individual acts taking place within each ring, but how the rings play off one another–how they work together–that make this The Greatest Show on Earth.
Balancing the three rings–ownership, family and business–takes a good deal of effort and a strong foundation of family and business governance. In other words, processes must be put in place to hold people accountable and important issues must be handled by thoughtful and efficient decision makers. It’s typically recommended for a family business to create a family council or board of directors to provide accountability. But remember: just because a family business has a council or board doesn’t guarantee smooth sailing. In fact, the true capacity of family councils and family business boards can’t be realized until there’s a strong foundation of individual and family accountability.
Accountability is when a person says they’re going to do something and they do it. Not only that, but they do it with an expected level of quality and within a given timeframe. If a person realizes they won’t be able to accomplish their task, they let others know as quickly as possible. Simple, right?
Individual accountability is when a person clearly visualizes what they plan to do, and musters up enough self-control and confidence to get it done.
Family accountability is how individual family members communicate and hold one another accountable.
When individual and family accountability is absent, family councils and family business boards flounder and become emotional battlegrounds for family members. It’s difficult for a board or council to operate when the family or individual members have no intention to be held accountable. The same can be said if there’s dysfunction on either side. If individuals don’t believe in accountability or don’t want to be held accountable, if they don’t have a sense of internal integrity or an ethos for living up to their word, then no system (aside from a court of law) will be effective in holding them accountable. At the core of individual accountability is self-esteem and self-confidence. A person with low self-esteem and self-confidence is a person who fears being confronted with their own failures. As a result, they will refuse to be held accountable for their actions. On the flip-side, a person who believes in themselves (often a symptom of good parenting) sees accountability as a process of self-discovery where they can truly learn about who they are and what they are good at.
A family with an internal sense of integrity and accountability doesn’t guarantee success either. The family must also have the intent to create an environment that fosters accountability. Research by Lee Capps suggests that in any system, creating an environment where an individual will do what they say requires three key interlocking elements: trust, conflict and commitment. In a family, building trust can be accomplished by providing members with: a clear sense of what’s expected as family members and an opportunity to participate in shaping those expectations. Trust will dissolve between family members if individuals aren’t allowed to be vulnerable or are criticized for failure. Family members can show their commitment to accountability by:
- Acknowledging when family members says they’re going to do something and they do it.
- Provide appropriate rewards for individuals who practice accountability.
- Create outcomes and expectations that all individuals can buy into .
Maintaining trust and commitment requires the family to create a process for dealing with conflict in a healthy way. Disagreements are bound to happen. Distrust and feelings of disloyalty run amuck when a family chooses to ignore conflict, or degrade those whose opinions are contrary to their own.
Still, there are some families who succeed at establishing accountability practices, but still fail in the long run. In cases like these, it’s most likely an individual or family psychological dysfunction preventing healthy accountability from happening.
There are a variety of biological and personality disorders that can affect a person’s ability to be accountable (or be held accountable) for their actions. Depression can diminish interest in day-to-day activities and affect a person’s intent to be part of the accountability process. Other psychological issues that can have an affect are substance abuse, anxiety disorders and bi-polar disorder.
Additional dysfunctions (probably related to interpersonal boundaries) can also affect the accountability process within the family. There is a healthy level of closeness or distance between individuals in a family–a healthy sense of what is personal and what is family information. In families where boundary problems exist, you will see one of two common outcomes:
- The family is too enmeshed with each other’s activities for there to be any personal responsibility or accountability.
- The family is too disengaged from each other to interact in a way that builds enough trust to provide accountability.
Other common family problems that can hinder the accountability process include: lack of appropriate leadership structure, historical conflict patterns passed down from one generation to the next and generational differences in approaching communication.
Managing the three-ring circus that is a family business, while at the same time creating a culture of accountability, is no easy task. Family councils and boards are no guarantee. A clear intent and a focused commitment are also required for the family and its individual members to create a healthy accountability process.