Family Business Matters

How is Your Family Business’s Equity Holding Up?

By Tom Hubler, Executive Consultant

When businesses talk about equity and value, they talk almost exclusively in financial terms such as how much the company is worth in dollars. This makes perfect sense given the purpose of a business is to make money to grow and sustain itself, its owners and employees.

With family businesses, however, there’s another form of equity that must be worked on equally if not more than the financial version—the emotional health and strength of the family. Tending to this consistently is a must for the family business to grow and flourish. We call this process “building emotional equity,” and while some parts of it are common sense, other parts may not be quite so intuitive.

Strengthening Your Family Is Just Good Business

Few people would say they don’t want to maintain strong relationships with their relatives, and plenty of business families talk (rightfully so) about how to ensure they keep a strong family life outside of the business. Just think about how many families have a “no shop talk at the dinner table” rule so there is time intentionally left for just maintaining these relationships.

However, building emotional equity isn’t just about setting aside work talk (which is something even non-business families often do); it’s about accepting as a business family that strengthening family bonds is an integral part of strengthening the business as a whole. Building the shareholder legacy of family harmony is a gift to the future, and not only for the family. Research indicates that it shows up in the profits of the business. At your next family meeting, include a discussion of the ways to strengthen your family’s emotional equity. I know you will not regret it... MORE