How to Work With Your Family Without Killing One Another

There is an old saying: “Never do business with family.”

I disagree. Family businesses can be some of the strongest, most resilient businesses in America. They create jobs, build wealth, support their communities and, when done well, create a legacy that extends far beyond the founder.

But let’s not kid ourselves. Working with family can also be complicated.

At a typical company, when the sales manager disagrees with the president, they argue about sales. In a family business, the argument may start with sales and somehow end up with, “You’ve never respected me since Dad gave you the bigger bedroom.” Welcome to family business.

The challenge is that family businesses operate in three overlapping worlds: Family, Business, and Ownership. Each has different expectations, responsibilities, and measures of success. And the same person can occupy several roles at once.

Your brother may be your business partner, fellow shareholder, and head of operations. He is also still the kid who borrowed your car in 1987 and returned it with an empty gas tank.

Those roles don't disappear when everyone walks into the office Monday morning. So, how do you work with your family without killing one another?

Stop avoiding the difficult conversations. Family businesses are remarkably good at not talking about the things they most need to talk about. Who will eventually run the company? Is the next generation really capable of leading it? Why does one sibling make more money than another?

Should every child own an equal share of the business? When is Dad actually going to retire?

Everyone knows these questions are sitting there. Nobody wants to bring them up because Thanksgiving is coming. Avoiding conflict in the name of family harmony rarely creates harmony. It simply postpones the conflict—and usually makes it more expensive.

Strong families aren't families that never disagree. They are families that have learned how to disagree productively.

One of the fastest ways to create resentment in a family business is ambiguity. Family members need clear roles, responsibilities, authority, and accountability just like everyone else in the organization. Maybe more so.

A last name is not a job description. Being the owner's daughter doesn't automatically make someone qualified to become vice president. Being the oldest son doesn't come with a divine right to become CEO. And ownership is not the same thing as leadership.

Put capable people in positions where they can succeed. Establish expectations. Measure performance. Give honest feedback. You can be a supportive parent and a demanding business leader. Just don't confuse the two roles.

Remember that fair doesn’t always mean equal. Parents spend their lives trying to treat their children equally. That instinct can create enormous problems when carried into a family business.

Suppose one child has worked in the dealership for 20 years, helped grow the company and assumed significant leadership responsibility. Another pursued a successful career somewhere else. Should they receive the same compensation? The same decisionmaking authority? The same ownership?

Maybe. Maybe not.

The important thing is to have the conversation and establish principles before there is a transaction—or a funeral—forcing the issue. Fair and equal are not always the same thing.

Put some rules around the family. Most successful companies have policies covering employment, compensation, decisionmaking, and governance. Yet many families owning those companies operate almost entirely on unwritten rules.

“Everyone knows how we do things.” Until they don't.

Family governance doesn't need to resemble the United Nations. Start with some basic agreements. Who can work in the business? What experience is required? How is compensation determined? How do family members become owners? How are major decisions made? How will disagreements be resolved?

For larger or multi-generational families, a family council, outside board members, and eventually a written family constitution can provide structure before emotions and ego take over. Governance isn't bureaucracy. It is clarity.

Finally, separate the dinner table from the conference table. This may be the hardest discipline of all. When you are discussing business, discuss business. When you're together as a family, be a family.

My daughter Catherine works with me at Compass Point, so I understand this from both sides of the desk. One simple technique we use is identifying which “hat” we're wearing. Sometimes we're talking as colleagues at Compass Point. Other times we're Dad and daughter.

Knowing which conversation you're having matters. Because ultimately, the objective isn't simply to build a successful business. It's to build a successful business and still have a family that wants to spend Thanksgiving together.

At Compass Point Family Business Consulting, that's the work we do every day—helping family businesses grow stronger, develop leaders, navigate succession and ownership transitions, create effective governance, and deal with the family dynamics everyone knows are there but doesn't always know how to address.

Successful businesses. Aligned ownership. Stronger families. That's a legacy worth building.