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Impact of family dynamic on business dynamics

“A Family Affair” reminds me of a song from my era by Sly and the Family Stone. By the way, our basketball team used to warm up to music by the Four Tops, the Temptations, and Sly and the Family Stone, so this article put me in the mood for reminiscing.

A few years ago a young lady and her husband who had completed our online Ag Biz Planner course relayed a message about the process at our face-to-face session at the end of the course. She stated, “You and your course turned my hair gray!” My embarrassed look led to a big old belly laugh from both of them. Her point was that by going through the business planning course, she had asked tough questions of their parents and grandparents, which resulted in some deep discussions on issues that needed to be resolved, but were frequently avoided in family discussions.

In family business dynamics, business and family discussions need to be fleshed out. A number of years ago at a banking school, our annual field trip to a dairy farm used for a case study illustration expounded on this issue. This dairy was owned and operated by three brothers and an outside partner. Their business had been very successful for eight years prior. The dairy was just breaking ground on a major expansion, and during our tour, I asked a series of tough questions concerning expansion, with the bulldozers ready to move dirt the next week.

As we loaded the bus, the sun was setting and my banker friend and I noticed something disturbing. One brother’s spouse was in his face asking questions that would suggest something was wrong!  Well, the next morning the banker got a call indicating the $5 million expansion had been called off.

What was this family affair? The brother’s wife said he would be going it alone if they expanded the dairy. She wanted nothing to do with it. The rest the story in this case was an issue over work-life balance pertaining to one brother’s teenage sons. How often do we find a major change in operations or expansion makes perfect economic sense; however, the important human elements trump economics. Next time I will cover how a family affair hiccup occurred as a result of a possible change in practices.

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