Improving Family Business Communication

Running a business with family members can be a very rewarding experience with many advantages. Along with the advantages come the additional difficulties of openly and respectfully sharing each family member's thoughts and feelings. 

Differences and disputes between family members who work together in a company are almost unavoidable.

For any of the advantages of working in a family business to be understood, farm family members must understand the value of good communication. It's important to hold fruitful meetings in an atmosphere that offers a safe environment for everyone involved to share their thoughts.

Due to the peculiarity that personal (family) emotions often interfere with business decisions, good communication is an even more important factor for efficient business operations in family businesses.

Due to the peculiarity that personal (family) emotions often interfere with business decisions, good communication is an even more important factor for efficient business operations in family businesses.

One of the most important characteristics of a successful multigenerational family business is accessible, truthful, and direct communication.

Family businesses simply cannot afford to have breakdowns in trust and communication as the effects can ripple outward to affect their most important relationships.

Conflicts among family business members are common, as are low managerial skills, disrupted daily business operations, and customer relationships that suffer from a lack of structure and poor communication.

How to establish good and effective communication in the family business? What happens when communication is not well established? The full explanation is below

Read: Improving Family Business Communication


Families develop shared beliefs, priorities, and aspirations on the basis of communication, which is the conduit for exchanging knowledge. Families in business often believe they are communicating efficiently because “we're family,” but the reverse is also true, and close contact is mistaken for communication.

Family business owners are often hesitant to discuss personal problems and how they can affect the company. There could be a "forbidden agenda" of significant but potentially sensitive family topics that are considered dangerous and prone to conflict. Retirement, divorce, family money, remuneration, bad results, share transfers, and success are examples of taboo topics. Retirement, divorce, family income, remuneration, bad results, share transfers, and succession are examples of taboo topics.

Even when there is a willingness to communicate freely, it can be difficult to broach topics that are at the heart of family members' relationships with one another and with the company. For example, father–son conflict and sibling rivalry have deep psychological roots, and their unchecked implications may spell disaster for a family business.

Risks that may occur due to ineffective communication:

  • Family members assume they know what other family members feel or want personal ties inhibit honest opinions being expressed
  • Even if they don't have the best business skills, the family's head of household can automatically assume control of the company.
  • one family member ends up dominating the business family -member shareholders not active in the business fail to understand the objectives of those who are active, and vice versa
  • personal resentments become business resentments, and vice versa
  • non-family board or management members feel excluded

To prevent these pitfalls, create an environment where open, frank dialogue and communication are encouraged and all family members feel free to express any concerns they may have.

As time passes, open family contact becomes more important. A strong sense of common intent is characteristic of successful family businesses, but family loyalty and stability will deteriorate with each generational change. Family shareholders who are not actively involved in the company gain diverse viewpoints, so it's critical to establish efficient and structured family contact. If left unaddressed, a communication breakdown can escalate to the point that family members who do not work in the company have nothing in common with management's expectations and goals.

The importance of shared purpose

A consistent and strong sense of common purpose among the owners and the wider family is the greatest strength in a family business. It can create a sense of identity, worth, and mutual resolve among its owners that non-family businesses are unlikely to achieve. 

This is a strategic advantage that family companies can aim to use as much as possible. There is nothing to tie family members together and their mutual interest in the company without a common goal. As time passes, no amount of governance or technological mechanisms can avoid disintegration, which often comes at the expense of a great deal of tension and dissatisfaction.

Fear of confrontation is a common barrier to communication. Make the distinction between positive and destructive conflict. Destructive conflict usually revolves around issues of personal identity and relationships, and discussion never leads to a solution. Different viewpoints are welcomed and valued in constructive confrontation, on the other hand, and dialogue can lead to positive, innovative outcomes.

Families need strategies that enable them to approach business in a cohesive manner, as well as the recognition of family members' obligations to one another, as well as the ability to interact and share their thoughts on the important issues that the family must confront.

Read: Family Business Challenge: 3 Issue You Can't Ignore

Organizing family meetings

Family meetings involve careful planning, particularly when it comes to putting together the agenda for the first meeting and setting the groundwork for future gatherings. Meeting arrangements should represent a concern for the gathering's value as well as the participants' comfort and trust. Meeting leaders should be carefully chosen, with the aim of broadening the family leadership base.

Family members should be allowed to take turns in a variety of positions at family gatherings. Furthermore, the family's ongoing agenda should be closely monitored to ensure that critical ownership and conceptual concerns are addressed.

“Golden rules” for family meetings

  • Pay attention to one another.
  • Make an effort to comprehend each other's perspectives.
  • Pay attention to what isn't being said and treat others with respect. Be truthful and say what you mean, but avoid personal attacks.
  • Prepare to defend your place.
  • Avoid being ambiguous.
  • Even if you disagree, do not interrupt. Do not make demands.
  • Goals can take precedence over personalities.
  • Do not dwell too much on the past.


“We didn't want history to repeat itself,” says sixth-generation George Wright, outlining the goals of his family's M. Wright & Sons governance initiative in 2003. Their Leicestershire-based company, which was established in 1860, began by producing fabrics for the footwear and corset industries, but has since expanded to include high-tech textiles for a range of industries, including protection, aerospace, marine, and the military.

The "past" George refers to is the deterioration in family communication during the fourth-to-fifth-generation transition in the 1970s. Maintaining family unity becomes a difficult issue for such mature businesses as ownership and family involvement spreads out to more distant relatives with different perspectives and expectations – and it was discovered that one of M. Wright & Sons' shareholding relationships was attempting to gain value from their shares with the assistance of outside investors. The upheaval caused by these investors threatened the business's future, and George's grandfather and father were forced to quit. They didn't regain power until 1984, when George's father, Michael, became managing director

As a result of these traumatic events, the Wright family agreed to establish a family governance program for their company in the early 2000s, with the stated goal of "insulating the business from the family" and preventing history from repeating itself. They created a new family charter to promote family contact and provide assistance to the family “speak with one voice”.

Since the principal shareholdings were now split between two family groups (following Michael's sister Georgina's marriage), these discussions took on additional significance. Group chairman Michael Wright (now retired from day-to-day involvement), George as MD, and George's cousin Charles Maltby, who is a non-executive officer, are all family members involved in the company today.

Conflict resolution measures were also included in the 2003 agreements, as well as a share buyout for family members who no longer wanted to be involved with the business (which of course helped to limit the scope of future communication obligations). The charter specified "family" and established regular family meetings with the goal of maintaining contact between active and inactive family members, as well as between family shareholders and non-shareholding family members.

George acknowledges that maintaining the momentum and drive behind the 2003 family communication arrangements became a challenge once their new systems and procedures were in place and operational. “We're not a big company,” he continues, “and our daily family meetings got a little boring year after year with little change.”

Rather than involving the whole family, relations have shifted to a select group of shareholder members who meet at the time of the annual general meeting. “I believe we miscalculated the scale in 2003,” George admits. “Family governance should be tailored to the needs of the corporation, but we were attempting to fit large family company frameworks into our relatively limited setting. I believe our new arrangements have resolved this, and we now have effective two-way contact between the family and our independent board.”

Read: Ways to Manage Conflict in a Family Business


Finally, working for a family-owned company will offer great opportunities that are not available when working for a large corporation. These advantages come with their own set of difficulties in terms of communication. Taking the time to arrange regular meetings would help to promote coordination and unity, making family business involvement more fruitful and enjoyable.

Building an open and truthful family business takes a lot of time and effort, but the benefits in terms of reducing friction and miscommunication are substantial. When dealing with your family business's day-to-day problems, you should try to be as transparent and truthful as possible. It will not only change the dynamics of the family business, but it will also possibly lead to less issues in the long run.

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