We’ve noticed a theme in the past few years in our work with successful equipment dealership leaders.
One said this: “50% of our business challenges are internal relationship challenges.”
A banker who specializes in working with dealerships said: “One of the key factors for success for our entrepreneurial dealerships is the ability to hang in there together. In many cases the family relationships become a significant distraction. It is one of the most common reasons why these ventures fail.”
The CEO of a large regional dealership said: “I want to write a book when I retire about how dealerships are ruined by family instability. I’ve seen it time and again. You don’t have to be the smartest, most creative, most ambitious owner to succeed. You have to have some of that, yes, but what you really need is steadiness, the ability to keep going, to persist. I’ve seen so many family businesses that had what it takes, but then some bomb goes off in their family and they stumble, often never to fully recover.”
Read more about one family dealership's success story in overcoming a long-term conflict between two brothers and how the resolution meant a future for the dealership
These three comments focus on the “distraction” that some family relationships can have on a business. Family and strong internal relationships are a source of strength in many dealerships, and in some they are a source of weaknesses or an actual threat.
4 Relationship Challenges
This is true in any situation but even more of a risk in farm equipment dealerships where communities are tight and where we work with people’s sons, daughters, fathers, mothers, aunts and uncles over the generations.
As you read the opening comments, you may have recognized your own work or personal situation. Or, you may know of a relationship challenge in your dealership with another manager or leader.
Here are some examples of the kinds of high stakes relationship challenges we are talking about:
- Conflict among siblings in the successor generation.
- Tension between the founder and his successor son or daughter.
- Marital problems at the ownership or successor level.
- Key long-time employees whose expectations for buying into the ownership are delayed because of family conflicts.
- The reason we highlight these challenges is because, if not addressed, they can affect not just the performance but the very future of the dealership. Corrosive or counter productive relationships in family oriented dealership are a leading cause of failure. This often drives relatives to leave the dealership, taking their skills and ambitions with them.
In some cases, poor relationships threaten the business and the issues go unresolved for a long period of time. In other cases, relationship challenges lead to one “side” buying out the “other side” to the detriment of the dealership’s financial stability.
Leadership is Necessary
So, the question is “What can you do about these high stakes relationship challenges?”
Beware of anyone who tells you there is an easy answer. Family challenges are often complex, with deep roots and every one is different. But a proven approach to family business relationships called Bowen Family Systems Theory can provide some sound direction.
“Getting it all out on the table is only productive when the key relationships are healthy enough to handle it well…”
First, progress begins with recognizing that leadership is required. Avoidance is a common strategy employed by people who face a challenge where the stakes are high, the tension is higher and the solution is not readily apparent. Avoidance gets a bad name but it is also natural. Family business members use it for one good reason: They don’t want to make things worse. And that is a very good idea. For example, when a frustrated family relationship mechanic decides he is fed up, grabs the biggest wrench he can find and throws it at the family machine, the results can be disastrous.
This is why we don’t tell our clients, “You just need to talk about it.” Instead, we let our clients know that communication is often over-rated. We try and help them think more clearly, get the emotional temperature down, and only then move toward leadership action. “Getting it all out on the table” is only productive when the key relationships are healthy enough to handle it well.
Sure, avoidance has a downside as well. As tensions rise incrementally, the risk of an explosion goes up. In such a situation, a family member who decides to seek out private, confidential consultation is reducing the avoidance. When it comes to family tension, a stitch in time does often save nine.
Skilled advice can come from experienced lawyers, wise clergy or from family business professionals and psychologists. Many universities have programs that support family businesses.
One key family member who is willing to reach out for another perspective is more influential than it might initially sound. The science of family notes that not all family members need to be on board for progress to occur.
Many high potential family business leaders get stuck thinking that no progress can take place unless a particular adversary is willing to change. The Bowen Theory is an innovative approach that has the huge advantage of not requiring everyone to participate.
Because families are so interconnected, one motivated family leader can have a strong influence on the group problem. If one person in the family garden changes what they are doing, the other family members are affected because their roots are intertwined beneath the family soil.
Success Starts with Self Management
Progress is often achieved through the quiet efforts of a cool-headed family leader who is invested in the long-term welfare of the entire family, who is connected to many of the key parties, and who is willing to invest time and creativity into new solutions.
This change leader need not be the patriarch of the family. Any motivated family business member can play this role. If it is a family member who has gotten caught up in the problems and made some mistakes they are willing to correct, so much the better.
But here is the key point: They must have the capacity to manage self. The skillful management of self is the key to influencing the situation.
Most successful business people believe we create our own luck, take personal responsibility and believe in treating others well. But when family issues get intense, those principles can go out the window.