Subscribe to expert advice.
Yesterday in Sao Paulo, Brazil I presented my latest research on self-made, family business billionaires to a group of 500 executives. I've had the chance to work and teach 13 of these SMB's (self-made billionaires) from 5 different continents (so far, no billionaires on Antarctica) so my workshops include a number of unique anecdotes gleaned from years of spending time with them and their families.
At the end of my presentation, I entertained a number of questions from audience members. One executive raised his hand and asked me how the best family business leaders in the world handle their in laws. His question was met with commiserating laughter from a number of other participants - so many family business owners struggle with exactly the same question.
Luckily, I've had a number of years to consider this question, discuss it with colleagues and observe the best practices of some outstanding leaders. So here's how I came to my conclusion, and what it is:
- Put yourself in the shoes of your wife, husband, brother or sister-in-law. How does it feel when you are excluded? Not good. You wonder why - are you not smart enough? Not trustworthy? Or is there a scheme being put in place? Exclusion breeds mistrust and mistrust is dangerous to business owning families.
- The cost of mistrust in a family business system far outweighs the risks associated with appropriate inclusion and information sharing. Share information about the family business, educate in laws on the basics of the business and ownership structures. But don't invite in-laws to be a part of making decisions that they are not experienced or knowledgeable enough to make.
Is it possible that an in-law will create undue turmoil and tension in a family business? Absolutely. Is it probable? Only if business owners treat them like mushrooms - keeping them in the dark, nourishing them with bull puckey and cutting their heads off when they speak up. The probability that they will add value to the system increases as they are given basic information about the business, ownership group and governance process and are included appropriately.