There is a question that few family businesses ask themselves in time: what happens when the size of the company and the size of the family do not match? It is not an abstract question. ANDIt is one of the most frequent sources of conflict, paralysis and fracture in organizations that have been operating for decades and that, seen from the outside, seem solid.
CAPS Consultantsa firm specialized in continuity of family businesses with presence throughout the country, identifies four situations that are repeated with striking regularity, and that each generates its own tensions and its own risks.
When both the company and the family are small, the dynamic that is installed has a particular logic: we cannot lose anyone. That awareness, although rarely verbalized, shapes behaviors in profound ways. The rules are stretched when necessary. What would otherwise be unacceptable is tolerated. It is negotiated in silence so that the system does not break. That creates cohesion and pragmatism, but it also accumulates resentments beneath a seemingly calm surface — until something changes and everything that had not been resolved suddenly appears.
When both the company and the family are large, the challenge is of a different nature. With many actors, many interests and much at stake, the rules must be clear, written and sustained, without exceptions that open the door to new exceptions. Leadership needs legitimacy not only because of the last name but because of demonstrated ability. Companies that did not build strong governance structures in a timely manner often pay a huge cost when tensions escalate: court disputes, family fractures, loss of business value.
When the company grew more than the family, a reality appeared that was experienced with a mixture of pride and anguish. The business demands capabilities and presence that the family cannot provide with its own members. External professionals must be incorporated not as a strategic choice but because it is not enough to cover what the company needs. For those who grew up in the culture of total family control, relinquishing the management of key areas into the hands of people who don’t share a last name or history can feel like a loss, even though it is objectively a necessary advance.
When the family grows more than the company, the pressure on the business becomes unsustainable. Everyone wants a place. Everyone has expectations. And the company, which was not designed to absorb so many people or to generate the resources that everyone needs, begins to creak. Incorporating external professionals when there are family members who feel that that place belongs to them generates loyalty conflicts and wounds that do not always heal. The question of who enters and who does not, with what criteria and under what conditions, becomes one of the most difficult that a business family can face.
*Director of CAPS Consultores and founder of Grupos Estim.
by Leonardo J. Glikin
