The Ten Commandments of How to Ruin a Family Business

The brilliant and well-known Youth Court judge from Granada (Spain), Judge Emilio Calatayud, published the “Ten Commandments of How to Raise a Delinquent”, which served as inspiration for the following list of 10 ‘Do’s and Don’ts’ for family businesses. By emulating his suggestions, I do not intend to tell you what you must, or must not do to ensure that your family business survive many generations into the future. That’s just simply too hard to do. Rather, what I propose instead is a ten point plan of what you can do in order to successfully ruin your business in just a few short years.

If you are a shareholder in a family business:

  1. Don’t be concerned with understanding what is happening within your company, its products, the markets it operates in, the competition, or the risks it faces, etc. Remember: that’s what you pay your executives for.
  2. Don’t pay any attention to the personal situation of the other shareholders and their family members (health, emotional stability, vocation, asset and tax status, etc.). Don’t let them think that it’s the company’s job to resolve all their problems.
  3. Do put all your focus on the here and now; don’t get tied up with questions about where we come from and where we’re going as a company and as a family of entrepreneurs. There is a risk that you won’t know how to respond, or that your answers might not be to everyone’s liking.
  4. Do keep your eye exclusively on the figures and on the finance capital, because the company’s ultimate goal is to make money. Niceties such as ethics and CSR are feel-good marketing gimmicks.
  5. Don’t bore your young children to tears with company values, or with the importance of entrepreneurship, of making an effort, austerity, responsibility, etc. They’re just kids and they must enjoy life, without any frustrations, or limits.
  6. Do place your children in executive positions within the company, even though they are unprepared for it, or uninterested in the business project. They’ll eventually get the hang of it and learn to love it.
  7. Do keep the information you give to the other shareholders to a minimum, and be careful with sharing your opinions or concerns. This information ‘gate-keeping’ is preferable because there’s always a danger that others may misinterpret the information, or that they might want to know more about more ‘sensitive’ issues.
  8. Don’t complicate things with such matters as structures of governance and protocols for professionalising management, nor with structuring relationships between the family and the company. Best to leave well enough alone if things have gone well until now, although both the company and the family may be growing.
  9. Don’t stress out over conflicts that may arise amongst family shareholders. It’s best to not pour salt on old wounds, and you’ll see how time cures everything.
  10. Do put off the question of who will take over at the helm for as long as possible in case you open a hornet’s nest where everyone gets nervous, and which might upset the older generation considering everything that they have given to the company and the family over the years.

By following these 10 simple steps, you are sure to run the family business into the ground in short order. Moreover, you could always write your memoirs, be the inspiration to a drama, or even a horror film.

Read the original article in Estrategia Empresarial. (Spanish)

Written by Maria Astigarraga.