To understand the issues of the family business, it helps to first understand the family context. That’s according to Cliff Atherton, managing director of GulfStar Group, who teaches a course called “Topics in Family Business” at Rice University.
“One of the first things that we do in every case that we analyze, we put on the board what’s called a genogram. What does the family structure look like, from the founder all the way down to the current generations? And what’s kind of been the history and the style of communication within the family?”
Entrepreneurs often like to see the family business transition into the hands of their children.
“And the majority of the students that are in my class this year came from a family business. They intend to go back to the family. So we really, I was surprised that we had such a large compliment for our first time out of students who came from and will go back to family businesses.”
Atherton says pruning the family tree to simplify ownership can increase business performance, but can also introduce conflicts between family shareholders who lack commitment to the business.