When it comes to family, the answer is in the question

Mishal Kanoo argues that family businesses are so complex and emotionally charged, solutions to problems are different.

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By  Mishal Kanoo Published  May 14, 2006

|~||~||~|Mishal Kanoo argues that family businesses are so complex and emotionally charged, solutions to problems are different. One day in class I was asked by one of my students: “Why don’t you ever give us solutions to the questions you pose?” Pardon me, but let me give you some background on myself. I had the privilege and the honour to teach at one of the Gulf’s most prestigious institutes: the American University of Sharjah. I taught fundamentals of family business. I did so, not for any other reason than my love of teaching and seeing young boys' and girls’ eyes light up when they get the idea. You see, for me, it is more important what a person gives back to society than what they take from it. To be able to help young minds grow and evolve is a sight to behold. Now back to the story. My student was astonished as to why his teacher could not simply give him solutions to problems that families face. Whether it had to do with why families don’t have succession planning or why they don’t communicate with one another in productive ways? He was also curious as to why whenever I gave them a scenario to ponder and think about, I would never give him a clear-cut solution. It seemed a logical conclusion. Why not? In other management courses, the students were given a model solution that only needed some adjusting to whenever a problem was presented to them. Why not for family business? The answer is quite simple if you think about it. The problem is that we like to place everything into neat-boxed solutions. In most cases, it works. But for family business, this can never be the case because of the simple fact that in situations involving families, the issue is a behavioural one and not a managerial one. And even as management is concerned, the solutions are never clear out as family dynamics, the way family members interact with one another, plays a greater role than what they would like to admit. Does this mean that family businesses are not professional? On the contrary, there are enough studies on this to prove that family businesses are on par and sometimes supersede non-family businesses. However, because human behaviour and family attachment to the business is a great factor within family businesses, placing things neatly in a box is nearly impossible. Family businesses, especially within the first three generations, tend to allow emotional concerns to overtake the managerial ones because of the close attachment family members have to creating the business. The founder usually sacrificed his or her time and effort on the business. The second generation usually saw this effort and felt the sacrifice so they were also emotionally committed to the great strive that created their business. The third, usually wants to do one of two things. Either they want to emulate their predecessors and build upon their success and thus own the business emotionally. They usually tend to take more risks because they want to surpass their predecessors and thus might make grave business management errors of judgment. Or they tend to want to divest themselves of something they have no emotional attachment to because they might have hated seeing the cost the company and its demands had on the family and, as such, want no more part of it. In any case, just a few, usually no more than 5% or there about, go on to the 4th generation. So you can see how emotionally charged the business can get. There is no way to be able to calculate, empirically, what the impact of this emotional charged dynamic structure will have on the business. As you can clearly understand by now, when my student asked me why I never gave him a one-stop-shop-type answer to thefamily business situations we talked about in class, My answer is that each family is different. Different in the way they handle their business processes (which is the simple problems that they will face) and different in the way they handle their family (which is the more complex issue). - Mishal Kanoo is the Deputy Chairman of the Kanoo Group.||**||

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