Families often put off business decisions such as leadership succession and sale or transfer of ownership. Even when decisions are made, implementation is often slow. But the costs of indecision are enormous: Businesses fail and opportunities are forever lost. Below are five factors that lead to family business indecision to be aware of and address.
1. Families are emotional. People avoid situations that make them feel anxious. Scheduling regular family meetings, using an agenda, and reviewing the undecided issues in a businesslike manner will create a calmer atmosphere.
2. Families are closed systems. Closed systems do not like change. Here are strategies that may invite change: First, ask many questions because questions introduce new information. Second, expand the number of people involved in a decision process because new points of view challenge family members to take action.
3. Families lack clearly defined roles and responsibilities. Specific roles and responsibilities, with tasks spread across generations and feedback required through regular family meetings, help minimize "diffusion of responsibility," where, in the presence of others, people do not feel they must make a decision.
4. Families have emotional imperatives. Decisions may be delayed or abandoned because family loyalties and commitments can hopelessly complicate the task. An effective strategy is to put alternative choices on the table, clarify priorities, and to address costs and benefits one step at a time.
5. Family leaders can have education/skill deficits. Many business owners are faced with important decisions without adequate preparation or education. The final strategy, then, is to ensure that all parties have the information and education necessary to make a decision.
David Lansky, PhD
Family Business Innovations
Highland Park, Ill.
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