I won't deny that combining family and business results is a potent mix. But what happens with that mix is in the hands of each business family. I often compare the Force in the Star Wars universe, which also has a dark side (think of Darth Vader) and a light side (the Jedi knights).
Contrary to the detractors, I prefer to look at the competitive advantages that family businesses may have precisely because they are family businesses. This source of competitive advantages, which are valuable, rare, and inimitable, is called familiness[1].
How to nurture familiness? Whether the reader is a family member or not, if you manage a family business, you will not be ill-advised to take these recommendations into account:
1. Structure is your friend
Getting the family to organize itself more formally, with governing bodies and processes, may seem strange. It always takes a year or two for the family to get used to interacting in this way. But the value of governance becomes evident when we see how families benefit from these structures and processes. Discussing sensitive issues and dealing with complex emotionalities becomes easier and more productive.
2. Professionalising does not mean taking the family out of the business
The most successful family businesses combine family members and non-family managers in their management. Both have to be, first and foremost, competent professionals. On top of that, non-family members can bring expertise in areas that the family doesn't master internally and are often a benchmark and a catalyst for certain management practices (e.g., performance appraisal processes). Family members can add formidable skills, for example, an unmatched "love for the team" and flexibility, and being transmitters of the family's values inside (and outside) the organization.
3. Fair processes are more important than fair results
In family businesses, fairness is crucial, or, if you prefer, the perception of unfairness can be corrosive and dictate the organization's failure. The antidote is to invest in processes and procedural justice. People live better with less favorable outcomes when they feel that the process that led to a certain decision had the right ingredients that made it fair.
4. It is worth investing time and money in the family
Any manager understands the need to invest in the business, allocate resources in the now to reap income in the future, and thus create value. What's not so obvious but still makes perfect sense is applying the concept of investment to the business family - family members, whether they manage the family business, simple' shareholders, or future shareholders, will be all the more valuable to the family firm if they are nurtured and developed, and if their talents are nurtured.
Familiness is within the reach of any entrepreneurial family, but in fact not all of them are able to harness the potential. Be a Skywalker family, use the good side of the Force!
[1] Habbershon, T. G., & Williams, M. L. (1999). A resource-based framework for assessing the strategic advantages of family firms. Family business review, 12(1), 1-25.
